Is That Your Hand in My Pocket?: The Sales Professional's Guide to Negotiating - Hardcover

Ron J. Lambert is the Chairman and CEO of Yukon, a division of Alongside Management, Inc. Ron negotiated major contracts for the $500 million pharmaceutical division of A. H. Robins, Inc., served as senior vice president for Data Systems Corporation, and executed multimillion dollar negotiations with companies such as M&M MARS, Wyeth Pharmaceuticals, Nextel, Gillette, PepsiAmericas, GlaxoSmithKline, BP Lubricants, General Electric, and others.

Tom Parker is a senior vice president of Yukon, a division of Alongside Management, Inc. Tom has over twenty-five years of sales, marketing, product development, and sales management experience with multinational corporations. Parker has lead the Office Products Division at Rubbermaid. Also, his role in the rescue of AMF Bowling lead to a $1.3 billion buyout by Goldman Sachs and an IPO.

Introduction

Relationship selling may not be as dead as disco (yet), but it needs to get its affairs in order. More and more often, large companies are looking at those cozy vendor relationships that their buyers have, and they are wondering if all that warm, fuzzy, win-win attitude isn't costing them a few points at the bottom line.

Training firms, including our own, have taught salespeople how to build rapport, create equal business standing, and explore alternatives with their clients. The goal of this strategy is to create an atmosphere of trust and mutual respect where the needs of both sides can be explored and, it is hoped, meet with a creative solution that allows both parties to get what they want (or need) out of the negotiation.

When this strategy works, it works great. Here's the rub. It works only if both parties want to play. The problem is this: the global economy has put so much pressure on companies to squeeze costs out of their operations that the purchasing function is increasingly seen as a key profit center.

Several years ago, it became clear to us that there was movement on the buyer side away from the collaborative model and in another direction entirely. In place of relationships and creativity, we got commoditization and reverse auctions. This began with the largest companies and has been gradually morphing its way down the food chain ever since.

Traditional selling skills don't work well in this environment because only one party is playing the game. While the seller is working to build a relationship, the buyer is working just as hard to avoid it. In this scenario, the buyer wins when he can identify multiple sources for the same product or service and then let them beat themselves bloody competing for the order.

This is not to say that relationship selling has gone away or will go away completely (neither will the Bee Gees or Donna Summer, for that matter). There will always be a need for these skills. In today's business climate, however, a salesperson needs to be prepared to play the game either way. This book is aimed at helping salespeople learn to cope successfully and win in this rapidly changing environment. Where collaboration reigns, the skill sets are here to create even more collaboration. Where collaboration is an endangered species, the techniques are here to help salespeople move the other side toward collaboration.

For the last fifteen years, we have taught thousands of salespeople on six different continents how to deal with professional buyers. The skill sets that we will cover in this book have saved those clients almost $2 billion. They will work just as well for you. In addition, these skills will make your negotiations with even the toughest buyers more productive and less stressful. Oh, and as an additional benefit, you'll probably make a lot more money!

Even if you aren't dealing with career purchasing people yet, you owe it to yourself to prepare for the day when you will have to. In the happy event that your industry is not moving in that direction, this book will make you a more effective negotiator inside and outside your company.

This book is dedicated to hardworking sales professionals everywhere.

-Ron Lambert and Tom Parker

Chapter One
why buyers don't want you to read this book

As you are reading this sentence, somewhere in the world, a room full of buyers-in-training are going over the tactics and techniques that they will use on you. These techniques are designed to confuse you, to knock you off your carefully put-together game plan, to sap your power, and to pick your pocket.

Pretty scary, huh?

You are a professional salesperson. You've had lots of product training, and you know your stuff. You've had some consultative sales training too, and you know all about the importance of establishing rapport and building relationships with your customers.

Here's something that you might not know. These people couldn't care less. They don't want to be your friends. They don't want to have rapport or a relationship. They want to beat your price down as low as they can, and they don't care if you lose your job or your company goes broke as a result.

They are professional buyers, and they are out to get you.

The world has changed a lot in the last twenty years, and nowhere are those changes more profound than in the age-old equation of"buyer" and "seller." Global trade has brought a lot of benefits to all of us, but one side effect of all this new commerce is ferocious competition.

Big companies swallow up smaller ones, and jobs move all over the globe in search of the most efficient (cheapest) labor markets. Outsourcing has moved beyond sneakers and T-shirts and now includes software, call centers, and even some health care functions. This has created a bare-knuckled business environment that, in many cases, won't allow for the kind of cozy supplier-vendor relationships that served us so well in the past.

Call it the Wal-Mart effect if you want, but the fact is that the beady-eyed professional buyers who used to make up a relatively small percentage of the purchasing function are now a fact of life in more and more industries. If they haven't gotten to yours yet, they are probably coming soon.

Our companies, Alongside Management and Yukon, train salespeople to deal with professional purchasing types. Our typical clients are Fortune 100 companies fielding large, multinational sales forces. These salespeople are often calling on the nine-hundred-pound gorillas of the business world, that is, the Wal-Marts, the Targets, the General Motors, and so on.

Our clients hire us because they have realized that they are sending their salespeople into a gunfight armed with a pocketknife. Buyers have moved much more rapidly to embrace the world economy model, and too often, sellers are still using techniques and strategies from an earlier era.

We find that professional buying organizations are now taking steps to actively thwart the strategies that companies typically use to train their salespeople. For instance, companies will now go to considerable lengths to avoid having their buyers develop personal relationships with vendors. They will institute policies like these:

• not allowing lunches with vendors
  
• not permitting gifts from vendors
  
• rotating buyers regularly to prevent friendships from forming with vendors
  
• having vendor "shoot-outs" with competing companies assembled in a room or a hallway to bid on a piece of business
  
• holding online reverse auctions with no sales input

In addition, buyers are taught very specific tactics to use on vendors. These tactics can be devastatingly effective if the salesperson isn't trained in the appropriate countertactics. That's where we come in. We specialize in helping to level the playing field and giving salespeople the tools and the confidence that they need to effectively represent their companies in the marketplace.

This book contains what we've learned from more than forty years of selling, negotiating, managing, teaching, and observing what's going on between buyers and sellers. The skill sets and techniques that we will cover have saved our clients almost $2 billion, and the number is still rising. The best part is that these skill sets will work just as well for you when you set out to buy a car or a piece of furniture as they do when you sit down with your customer to do a big deal.

These techniques are designed to:

• let you sell at higher margins.
  
• take pressure off you.
  
• counter buyer tactics and strategies.
  
• make your negotiations smoother and more time-efficient.
  
• help you move the other side toward collaboration.

Before we get started, we want to make one final point. It is tempting to think of the battle between buyers and sellers in terms of good and evil. That is, sellers (us) = good, and buyers (them) = evil.

We don't think this is a particularly useful way of thinking. Buyers, after all, have a job to do. If they don't procure products and services at the lowest possible price, they get fired.

It's better to think about this process the way you would a sporting event. Each side has a role to play, and if one side is doing a better job and beating the other, that doesn't make that side bad. That side is just better at playing the game.

We intend not only to give you, our reader, the tools that you need to go out and do a great job for yourself and your company, but also to show you how to have fun while you are at it. As a bonus, these same tools will work just as well when you are negotiating with your boss, your peers, your spouse, and others. You will use these skills for the rest of your life.

When it's your turn to be the buyer, you can turn these same techniques around 180 degrees, and you will be dynamite.

Here are the skill sets that you are going to need:

• Recognizing negotiation styles-yours and theirs
  
• Learning techniques for dealing with the screamers and the bullies
  
• Setting a collaborative tone
  
• Dealing with buyer tactics
  
• Reading nonverbal signals
  
• Understanding gender differences in negotiating
  
• Learning the art of saving face
  
• Planning effectively for a negotiation
  
• Choosing the appropriate strategy
  
• Using creativity to break deadlocks
  
• Understanding power: how to get it and how to keep it
  
• Asking why questions to uncover buyer motivation
  
• Using your team for maximum impact
  
• Wrapping up the deal so that it stays closed

As a bonus, we've thrown in a chapter on how to buy a car. We are constantly amazed at the number of successful salespeople who absolutely dread the car buying process. Think about it: this is an opportunity for you to be the customer! We'll show you how to use the techniques and tactics from this book to take the stress out of getting a great deal on your next automotive purchase. In addition, playing the buyer will give you useful insights into the mind of a noncollaborative purchasing person. We can apply this knowledge as we go along.

We've got a lot of ground to cover, so let's get started.