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Abstract
Purpose - To identify the keys to executing profitable sales negotiations based on analysis of the negotiation approaches of high-performing salespeople.
Design/methodology/approach - BayGroup International (a leading global sales consultancy) conducted a research study involving 2,000 salespeople at all levels from Fortune 500 companies across a wide range of industries. Respondents participated in an actual buy-sell negotiation. BayGroup collected and analyzed data on the negotiation approaches taken by study participants, and determined how the approaches taken by the sales professionals who negotiated the best agreements differed from others in the study.
Findings - BayGroup concluded that high performers raise their customers' perception of value by using six fundamental strategies, summarized in the form of principles of sales negotiation. The paper not only describes the principles, but also reveals the unique, counterintuitive manner in which high-performing salespeople plan and execute profitable sales strategy.
Practical implications - Owing to increasing pressure to improve earnings (and share prices), value-based sales negotiation has become more critical than ever to corporate success. Use of the research conclusions and analysis from this article can provide useful guidance to sales professionals and their managers on how to execute more profitable customer agreements throughout the sales process.
Originality/value - The importance of "selling value, not price" has been fully embraced by the world's leading sales organizations, but effective approaches to implementing behavioral change in this area have been rare. This paper presents provocative findings that suggest new ways to approach this critical strategic challenge.
Keywords Marketing strategy, Negotiating, Sales, Pricing
Paper type Research paper
As pressure to grow earnings (and raise share prices) has increased in recent years, the focus in many sales organizations has shifted from generating revenue volume to executing strategies that build revenue volume profitability. Achieving sales targets is no longer enough; today's sales professionals are also asked to minimize price and service concessions, keep internal sales support costs low, and build account profit margins.
In order to achieve these goals, sales professionals must sell and negotiate with customers not just to close sales, but to demonstrate value and the highest return on investment (ROI) to customers so that they are able to make the lowest total cost decision, rather than opt for what appears to be the...