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Economic Storm Coming? What to Do Now.

I get it.  I’ve managed P & Ls through recessions and I understand the options and the challenges.  If you’re not ready for it, sometimes the best you can do during a business downturn is simply play to survive.  This article discusses what you can do before hard times hit in order to expand your choices during.

The Cost of Cost-cutting

Make no mistake:  times sometimes get hard.  For example, if you sold capital equipment into the oil & gas industry during the oil price slide of 2016-2017, you know that there is sometimes no alternative but to “right-size” in response to an uncontrollable market dynamic. Companies need to step up the spending discipline during down cycles.

Cost control is good corporate practice, but it has limits.  Cost control, what one of my first bosses called “frugaling” takes energy and management focus.  Cost-cutting your way to profitability is one of the hardest ways to increase net income. Combining cost-control and growth is even harder:

You can’t shrink your way to growth.

When you start cost-cutting, it’s difficult to maintain customer service and responsiveness levels.  Your people find it harder to be that helpful cheerful voice for your customers.  It’s harder to invest in innovation.  It’s harder to get face-to-face with customers. You are at significant risk of trading customer satisfaction for cost improvement.

As you struggle through needing to “frugal”, don’t mistake right-sizing for a growth plan.

More importantly, don’t mistake a cost-cutting project for a guiding business principle.  It’s a tactical coping mechanism, not a strategy, or a path to long-term success.

Let’s Start With What You Shouldn’t Do

Don’t get taken by surprise.  That company who sells into oil & gas should know that an oil price dip is coming.  One of those is always coming.  Always. Leaders in that industry have absolutely no right to be surprised by the fact that oil prices fluctuate.  It’s just a question of when.  If you aren’t preparing your company for it, you don’t deserve to lead a company.

Don’t start feeling superior to some specific industry, people.  A recession is always coming, too.  Always. Go back and read the paragraph above as if it’s directed at you and your industry, because it is.

You Can Prepare the Hard Way…

Some preparations are really difficult.

  • For instance, you could try to manage your fixed costs down.
  • You could reorganize your financing, trading debt for equity…preferably, patient money. At a minimum, it might be worth it to ask your impatient money to be less impatient.
  • Perhaps you can aggressively build cash during good times. Perhaps you should step up your expense control now so that it doesn’t become need to become dysfunctional later.

These preparations can keep your frugaling from being the kind that damages your company’s long-term health. Keen awareness of customer value (awareness I help clients develop and sharpen) can guide you through prudent cost-cutting.

…Or You Can Prepare a Simpler Way.

Some preparations are more doable (perhaps still challenging, depending on your culture and leadership) but set you up for success – during and after challenging times. I can help with these, by the way.

  • Radically rethink who “sells”. Expand the mission of every customer-facing role in your company. Go beyond current “customer experience” (CX) theory.  Where CX trains your people to “delight”, go further: every person trained in value discovery.  I teach three simple questions and a mindset shift that turn every person into an extension of your sales discovery process.
  • Radically rethink who buys. Typically, one silo at your customer holds budget, but many silos benefit. Get to all of the silos who benefit, and help them realize maximum value from your product or service.
  • Radically re-shape your most important customer relationships. There are specific strategic planning systems that shift key account management from “what all can we sell to this customer”, to “how can we add even more to our customer’s business?”
  • Radically reshape your customer’s perception of the value you deliver. Your customers don’t buy your products or services, they buy business and personal outcomes.  What they are willing to pay for those outcomes can increase if you help them perceive outcomes’ value more clearly.  While you might be able to add new products/services in the medium to long term, your salespeople can add to the value of your existing offerings right now. It just takes the right kind of conversational skills and a little additional business acumen.

Start now.  If the economy tightens, your customers will be distracted, and these will get harder. Also, your competitors will be struggling to take your customers – some will try to buy your customer’s business away from you.

Of Course, You Could Just Not Prepare at All…

You could wing it when the time comes, right? What could go wrong?

Contact me if you would like to discuss what you could do in your business. If you know somebody who might benefit from this article, please share.

To your success!

Categories
Investing Management Marketing Negotiations Sales

Is Discounting That Deal Suicidal? Five Ways to Tell

It’s often tempting to discount your way out of a stressful situation, but sometimes you’re doing more harm than good.  Discounting is sometimes necessary…but often, it’s the biggest mistake you can make.  How do you know when you’re in that situation?

Full disclosure here:  I’m highly biased against discounting. My regular readers have gathered that I’m a pricing hawk, and my clients engage me because of it.  Within the Miller Heiman Group network, value-based pricing was my differentiation.  I’ve managed too many P&Ls to be comfortable with knee-jerk discounting behaviors I often see.

Just because discounting throws away profit dollars, is that any reason to call it suicidal?  Maybe. Maybe not. There are good reasons to discount.  We can go through those in another article if you want, but many times, dropping your price hurts more than this month’s/quarter’s/year’s financials. The pain of discount-trained customers lasts far beyond today’s closed deal celebration.  Or, as mom used to say: “Just because you can, doesn’t mean you should”.

So, what are the signals that discounting is simply a crutch for poor selling/marketing?  Here’s a checklist:

The Value is Already High Enough

Many customers think it’s good business practice to push back on price, no matter how satisfactory.  For instance, sales professionals operating in Latin America tell me that aggressive price negotiation is standard business culture there. These negotiators aren’t looking for any particular number, they’re looking for capitulation. Convince them that there’s no money left on the table for them to win, and they’re done.

Another approach is to walk them through the value justification you’ve been building all through the discovery and proposal-building process. You know, the one you’ve validated with them and their co-workers.  Yeah, the one that builds a value case using the customer’s own monetary estimates.  This is the one your sales methodology helps you build in detail.  You have one of those, right?  If not, consider the value of adopting one.  How many discount dollars (remember, discount dollars = profit dollars) did you give up last year?  Compare that amount to the cost of implementing a methodology which would have captured those profit dollars.  How many more digits in the first number?  So…why are we not talking?

You Don’t Know Your Value

I once worked for a company whose culture practiced “if Sales can’t articulate value, Product can’t discuss pricing”.  This company had enshrined value-based pricing as a pillar of the company culture. Nothing moved for an opportunity until everyone knew what value the customer perceived from our offer.  Once value was known, nothing stood in our way when delivering that value.

In contrast, I recently worked with a company in the middle of a company-driven sales force turnover. The outgoing salesforce was known for building value and never discounting.  Clients would routinely recoup the entire investment in under two months (some as slow as six – still a 200% 1st year ROI). Once clients believed such results were achievable for them, price was unimportant.  The incoming salespeople and weren’t equipped to articulate and validate customer value.  As a result, neither buyer nor seller knew the value of the offer.  Discounting became rampant and steep, and EBIDTA shrank to “shameful”.

If your salespeople can’t validate value monetarily with a customer, they aren’t equipped to have a price discussion.  When they are thus disadvantaged, they’ll want to discount their way out of trouble. This outcome is only partially the sales person’s fault.  Leadership holds majority responsibility in providing tools to prevent it.

You’ve Sold Too Narrowly

Has your sales strategy engaged all affected personas? Chances are that they have not.  Even sales methodologies who teach engaging “all” personas, ignore out-of-normal-scope “optional” personas–who could yield additional value. We intuitively shun the decision complexity of adding personas, without strategically adding personas who are natural allies.  Sometimes adding people amounts to “packing the court in your favor”.

I regularly engage with clients who engage too narrowly.  Customers build a group buying decision dynamic around the organizational silo/department who has a budget.  Too often, salespeople follow this definition of “buying team”, ignoring all of the other silos who benefit from their offer.  Business acumen would guide sellers to expand the buying ecosystem advantageously.

If a sales strategy hasn’t built value broadly in a prospect organization, there may not be enough value to support desired pricing.  Look at it another way.  Your company invested resources in producing customer value, but your sales approach failed to leverage all available value into pricing.  If you can’t charge for the value you produce, how sustainable is your business?

You’ve Sold Too Shallowly

Building some value with a buying persona is good. Building more value is better.  I have yet to encounter a methodology that doesn’t allow sellers to add more value drivers into the mix.  I have also yet to encounter a methodology that equip salespeople all of the value drivers to add.

Your sellers are probably able to sell more value to existing personas. They often don’t have the business acumen, product training, or selling tools to sell full value.  If your customer hasn’t built full value in their own mind, the internal math doesn’t check out.  They might think “the value is too low”, but say “your price is too high”. Those two are the same thing.

You’ve Crippled Your Offer

I once had a client who loved to pare down first opportunities into net-new clients.  The idea was to win a low-risk first engagement, then grow from proven results. This is the familiar “land and expand” strategy. Unfortunately, these first engagements were so narrowed that compelling results were almost impossible to achieve.

Designing the value out of an offer to make it easier to swallow traps the seller into discounting a low-value offer. Worse, it establishes low value for all future “expand” opportunities.  This could easily be “suicide by discounting”.

If your business involves follow-on sales, discounting the entry offer is extremely dangerous; you need a convincing “trial basis, then full price” story.  You also need the initial offer to prove “full price value”; think “full value delivery at small scale”, not “low sticker price”.  Predefined criteria for success should also be part of the equation; force a customer to measure value.

The Road to Failure is Paved with Discounted Sales

I love building profitable businesses. Not opportunistic gouging profits, but real, win-win, value-based profits.  I love helping clients do the same thing.

Please share if you liked this article…or comment…or like.  Contact me if you’d like to discuss in more detail.

To your success!

Categories
Body Language Entrepreneurship Investing Management Marketing Negotiations Operations Sales Skills Women In Business

“Do You Know How To Be A Powerful Negotiator” – Negotiation Tip of the Week

 “Power – something that others grant you, even if you momentarily take it from them.” -Greg Williams, The Master Negotiator & Body Language Expert (Click to Tweet)

Click here to get the book!

“Do You Know How To Be A Powerful Negotiator”

 

He was pompous, screamed at others while demeaning them, and not well-liked – most of his associates detested him! Some wondered if that was why he’d been stuck in the same management position for over a decade. Plus, he was not a good negotiator – he lacked insight on how to use power. He used bullying tactics with his subordinates (i.e. you’d better do this or else), and veiled threats to delude his peers to get what he wanted. Everyone collectively swore they’d get even with him. And one day they did.

Do you know how to be a powerful negotiator?

 

Sources of Power and How To Use It:

Voice inflection – There’s power, or lack of, in the way you speak. You can make a statement that sounds like a question or a question that sounds like a statement simply by the inflection in your voice. To sound more powerfully, apply a deeper tone to your voice when emphasizing words of greater importance. This is especially true when negotiating. A deeper tone on, that’s my best price, conveys more conviction to your statement.

Positioning – Whether it’s your physical proximity to others or the proximity of your words, what proceeds your words impacts their perception. Therefore, be mindful of when you speak. If you speak after someone has delivered a rousing proposal, your words may be received with less enthusiasm. The same is true of your physical proximity to others. If you’re physically close to someone with power, your words will carry greater weight simply because of that proximity. Others will assume that there’s a sense of power bestowed upon you from the power person in the environment.

When negotiating, consider the order of your offers and their alignment with people of power. You can also make a prior offer appear to be better by downgrading the one that follows it – in that case, your message states that the trajectory of the offers to follow will become progressively worse.

Manipulation – A negotiator can gain momentary power through manipulation (for this purpose, the word manipulation is neutral – it’s not good or bad). One can use it to feed the other negotiator’s desires by embellishing the item he seeks from you. By doing that, you heighten his sense to acquire it.

To embellish an item, highlight how the other negotiator will feel, and/or appear to others once he’s acquired it. Take note of his body language as you make your summation. If he slips into a dream-like state while smiling and becoming dreamy-eyed, he’s also imagining the great sensation he’ll experience once he’s acquired your offer – you got him! Continue down that path and extract whatever he’s willing to forgo to acquire the offer. Be careful not to turn embellishment into a lie. That might come back to haunt you.

Likeability – Never underestimate the hidden value of likeability. It’s a factor that has swayed many negotiators. I’ve seen lower offers accepted because of it. It’s easy to be likable with most people – just be pleasant. Warning – with some bully types, you’ll have to meet power with power. Thus, the likeability factor may be a detriment. Instead, seek to become respected – respect will be the source that cedes greater power to you.

 

You’re always negotiating:

In the situation with the manager, mentioned at the beginning of this article, others did exact their toll on him. It occurred when subordinates and his peers combined forces – they informed senior management that they’d no longer work with him. The manager didn’t realize that he’d been negotiating with those folks during his tenure with the company. He used his power recklessly. And now their power was coming to bear against him – senior management fired him.

I love to observe people with power. To be specific, I note how they use it, to whom they extend it, and how they’re altered by it. It’s said that power doesn’t change you – it amplifies who you really are. To that point, always keep in mind, the way you treat people impacts their perception of you. Thus, if they perceive you as an ogre, they’ll be less inclined to assist you in achieving your goals. Therefore, use the sources of power as partners in your negotiations – they’ll increase the perception of you being a powerful person. That will lead to more powerful negotiation outcomes … and everything will be right with the world.

 

Remember, you’re always negotiating!

 

Listen to Greg’s podcast at https://anchor.fm/themasternegotiator

 

After reading this article, what are you thinking? I’d really like to know. Reach me at Greg@TheMasterNegotiator.com

 

To receive Greg’s free “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here http://www.themasternegotiator.com/greg-williams/

 

#Body #Language #Secrets #Negotiate #Process #Business #Progress #SmallBusiness #Negotiation #Negotiator #NegotiatingWithABully #Power #Perception #emotionalcontrol #relationships #BodyLanguageExpert #HowToNegotiateBetter #CSuite #TheMasterNegotiator #ControlEmotions

 

 

 

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Best Practices Entrepreneurship Industries Investing Management Skills Technology

The Dangers of Legacy Thinking

Every successful company and organization inevitably must confront a powerful question:

Is what got us to where we are helping us move forward or holding us back? Your company or organization may be thriving, but is this record of success sustainable and can you keep going?

Maybe you’re noticing kinks in your armor or a drop-off in your sales. You’re thinking and acting as usual, but something is misfiring.

This is what I refer to as “legacy thinking.” If left unchecked, legacy thinking can pose enormous obstacles to your continued success—or worse.

Legacy Technology—Dangerous but Also Diverting
 

Legacy thinking has a better-known cousin—legacy technology. The issue of legacy technology is old news—in more ways than one.

As you probably know, legacy technology refers to old forms of technology that are simply no longer optimal. This includes everything from software, operating systems or almost any technology once groundbreaking but now well past its prime.

The issues reach beyond outdated technology. Trying to get by with legacy technology can be very expensive, from the cost of operating the systems themselves to paying people to make certain nothing goes wrong, an inevitability. For example, Delta Airlines’ entire fleet in the United States was temporarily grounded because of computer problems—the second shutdown over a period of six months also shutting down the carrier’s website and mobile apps.

A more serious example occurred last year when the British bank Tesco shut down online banking after 40,000 accounts were compromised.

Those major headaches do not mean legacy technology is a problem in and of itself—it can cause a dangerous comfort in legacy thinking.

 

Legacy Thinking Defined

Like legacy technology, legacy thinking refers to thinking, strategies and other actions that are outdated and no longer serve you to the extent that they once had. This can be problematic if legacy thinking accounted for much of the success you’ve been able to achieve.

Many organizations can point to business principles, strategies and other ways of thinking that underscored success. One example is agility—the ability to respond quickly to changing events and market conditions. Reacting as quickly as possible helped many organizations climb to the top of their industries. Being agile, both internally and externally, seemed like a bulletproof way to approach things.

However, we are now in a period of transformational change. Whether products, services or the marketplace, change is not slowing down, which means legacy technology is becoming outdated faster as well.            

The same is occurring with legacy thinking. As the rate of change increases, even the most agile of organizations will be hard-pressed to keep up—let alone leap ahead with new ideas and innovations—and agility will likely prove to be less effective.

Take that reasoning and apply it to other forms of thinking and strategies that may have served you well in the past. Are they moving you forward or holding you back? If they’re more a hindrance, that’s legacy thinking.

 

Legacy Thinking—Changing Your Thinking Changes Your Results

The first thing to understand about legacy thinking is that it isn’t necessarily all bad. Overcoming legacy thinking doesn’t mandate erasing every strategy, idea or leadership concept you ever used in the past. Instead, identify those ideas and strategies that continue to serve you well while pinpointing others that may have worn out their value.

Agility in and of itself is not something to be completely discarded. There will always be fires and other immediate issues that warrant an agile response. However, it’s no longer the silver bullet it once was.

Consider other forms of legacy thinking. For instance, maybe you or some others in your organization are hesitant to embrace new technology critical to your future growth and success. I saw this firsthand when I worked with a major retail organization. Many key figures on the leadership team didn’t embrace the company’s commitment to technology and other elements of the future. Mobile apps, internet shopping, and other innovations made the company’s future seem bleak.

To remedy the situation, management made lateral moves with some individuals so their attitude wouldn’t hinder the company’s vision, while others were tasked with identifying strategies, ideas, and tools that would serve the company’s progress well. The result was twofold—not only did the company effectively separate elements of harmful legacy thinking from their workflow, but those once-hesitant executives saw firsthand how powerful those tools and ideas could be. They were walked into the future—and they liked what they saw.

The next time you’re considering the dangers of legacy technology include the pitfalls of legacy thinking. Just as old software shut down an entire airline, legacy thinking can cripple your organization. Don’t forget that there’s always the opportunity for an upgrade in the way you think and act.

Categories
Best Practices Economics Leadership Marketing Personal Development Sales

Make These Five Preparations Before an Economic Storm

How would you prepare your company if you knew a downturn was coming?  What would you change?  There are a few things you need to think through clearly now; a few preparations you need to make.  You should be doing some of these anyway, regardless of your personal economic forecast, but these “should dos” become “must dos” when the economy slides.

Nobody knows what the future holds, and that includes economists. At some point, though, this historically long economic expansion is going to end. When it does, fortune will favor the prepared.

I don’t blindly follow those who say that a downturn is inevitable simply because the economic expansion has been so long-lasting.  Perhaps I’m still impacted by a company leader saying that in the 1980s, then having that expansion last another two years.  However, there are a few indicators that should give us all pause. One, the shape of the yield curve, has perfect accuracy for the past several recessions.  This may be because this indicator is the aggregated “bet your career and your firm’s money” wager by many of the world’s smartest financial minds, placing much more money than in all of the stock market. Here’s an article that explains it pretty well. I ignored this indicator once and regretted it.

Regardless of your personal forecast, I suggest you go through this pre-storm checklist and give some thought to five issues.

How Will Your People Strategy Change?

Whenever a recession hits, one of the first dilemmas is how/whether to adjust the sales staffing plan. One of the worst burdens of leadership is deciding to downsize. Sadly, your company’s financial condition and financing structure might render this decision easy. Highly leveraged companies and those with short-time-horizon investor populations may not have any option but to lay off and hunker down.

For companies blessed with growth during a downturn — or with patient money backing you — increasing (especially sales) staffing in a downturn takes advantage of competitors’ reduced ability to respond.  While I’ve never been lucky enough to work for a company with the resources to make this happen, the experts tell you to hire…with caution.  There are diamonds in the rough, perhaps stars laid off by financially vulnerable employers, or stars who had better options.  At minimum, I would check the credit ratings of former employers as I prepared to interview a candidate.

Will You Discount? Will it Help?

During a downturn, price pressure will be inevitable. Discounting to win business is a fragile strategy.  Because price declares value, the player who drops price first definitely damages their own reputation (perceived value).  Matching a competitor’s price might bring your value down to their damaged level — unless handled properly.  Maintain a clear view of your value and what it offers to each prospective customer.

Start building value with customers now to minimize how much you’ll need to discount (Helping you do this is what I do).  If you have value, you should be able to maintain some price premium, but as competitors discount, even a solid price premium is applied to a lower base (competitor’s declining price).  By firmly retaining that value premium, you will minimize damage to your offer’s value.

If you can pre-emptively add to your value premium before a competitive price war, you may be able to mitigate some of the damage discounting causes.

Pursuing New Customers

Taking share during a downturn can be challenging.  Most competitors will be fiercely defensive…fighting for survival. How hard do you bang your head against that wall?

Before a downturn, figure out which competitors are already in trouble with their customers.  Your salespeople can sometimes gather this kind of intelligence, but there is an even better source.  Everyone in your company without a sales title who touches customers has a different vantage point based upon trusting relationships – with customer personas who may welcome the chance to resolve a vendor problem.  Train and equip those people to spot competitor vulnerabilities.  While you should always be sharpening this discipline, it becomes much more critical in a down economy.

If your product or service has a potential alternate market, consider exploring one or more of those before a downturn.  Pre-emptively look for opportunities to solve that market’s typical problems in new ways, or to add new value.  A fresh eyes look at your product or service’s possible value propositions and how they could produce novel outcomes for different markets might be in order.

Defending Existing Accounts

As competition escalates, competitors may be coming after your accounts. If you haven’t already, implement an advanced account management program now to pre-empt competitive pressure.  The goal is to make your key accounts more defensible.

The other goal is to grow within your current account base — less challenging than taking share. Account strategy should proactively demonstrate — then grow — your value to customers. Do this, and new opportunities crop up more easily in your existing account base.

The kind of account management program needed is one that focuses on building customer value using a cross-functional team approach.  Once again, your non-sales sellers are key to the success of a cross-functional account management effort. Peer-to-peer executive selling within the value-building charter is another key component.  Contact me if you’d like me to describe such a system in more detail.

Innovation

In a downturn, it’s common to strip R&D to the minimum. With some of the value-focused efforts described above (cross-functional account management and value-focused conversations), you will build a value insights-gathering “engine” enabling you to innovate more inexpensively than you might expect.  I help clients do this all the time, but during a recession, a radical value culture becomes an even bigger competitive advantage.

Another way to achieve some cost-effective innovation is to rethink your capabilities — in terms of what product/service capabilities are used to differentiate you.  These already-developed capabilities are the foundation for new products for existing customers, and are a key element in possible new market expansion efforts; you may see creative new value propositions that your existing technology expertise can capture with relative ease.

Summarizing

If you think a downturn might be coming, get your company’s financial house in order.  The next recession (whenever it does come) doesn’t look like it will be banking-led (the deepest and longest kind of recession), but unconventional economic policies (trade wars, etc.) mean a lot of predictability has been taken out of the economic system.  Agility is always important but will become a watchword during any upcoming cycle.

As you read this article, I hope you see that many of these preparations should be part of your regular management practice.  They become much more critical in a recession, and you’ll be glad you began working on them now.

If I can describe any of these preparations in more detail with you and your team, please reach out.  Otherwise, please like and/or share with your colleagues.

To your success!

 

 

 

 

Categories
Body Language Entrepreneurship Human Resources Management Marketing Mergers & Acquisition Negotiations Sales Skills Women In Business

“Powerful Body Language Secrets That You Need To Know” – Negotiation Tip of the Week

“Every ‘body’ speaks. But not everybody knows what someone’s body is saying – do you?” -Greg Williams, The Master Negotiator & Body Language Expert (Click to Tweet)

Click here to get the book!

“Powerful Body Language Secrets That You Need To Know”

He was overly impressed with her and her accomplishments. His embrace was meant to display just that – his swell of pride for her. But during the embrace, he felt her attempt to break free as a hostage might do at the first glimpse of freedom. He wondered what he’d done wrong. Later he commented to her about the embrace – and the perception he had of her breaking free. She smiled and said, at least you were aware of it – most people aren’t. I don’t like being hugged.

How attuned are you to the #body #language #secrets that people emit every day? If you are aware of such signals, what do you observe the most and why?

The following are a few body language insights that will allow you to understand people better and become a better communicator.

Head Cocking:

The gesture becomes displayed when someone shifts their head to the right or left after its been in a straight or opposite position. It’s interesting to note when it occurs because it denotes someone going into an inward evaluation. Thus, the gesture may originate from something you said or thoughts the person is contemplating.

Eyebrows:

One eyebrow cocked – This sign usually indicates inquisitiveness as to the possible believability of what’s said or outright skepticism.

Lowered eyebrows – Guarded, deception, annoyance, are the signs that this gesture indicates.

Raised eyebrows – Taking in more of the environment – can also denote surprise or interest (note the degree that the eyes widen – that’ll give you more information as to the thought of the person displaying the gesture.)

Palm Hand Gestures:

Hand up, palm facing out –The hand up and palm facing outward signals nonverbally to the other person to halt what they’re saying or doing. As the receiver of that action, you can gauge the degree of the intent by the distance the action extends from the other person’s body. As an example, if they commit the action and their hand is close to their body, the signal is not as strong as if they had a full-body extension of their hand – that would be a stronger gesture because they’re indicating a greater distance between themselves and what you’re saying or doing.

Palm up and open – Accepting, mentally open to receiving information – can also be internal mental contemplation. It can also be a sign of consternation – this occurs if hunched shoulders accompany the gesture.

Feet:

As a body language signal, feet convey more information than most people are aware of. Thus, you should always be mindful of what someone’s feet are signaling.

Feet aligned – When your feet are in alignment with the person with whom you’re engaged (i.e. both sets of feet are pointing at each other), both of you are succinctly engaged with one another – you’re in mental alignment.

Foot pointing away – As someone points a foot away from you, they’re shifting their weight because:

  • Something else has attracted their attention.
  • They’ve received enough information from you for the time.
  • Soon, they’re going to exit the conversation and do so in the direction their foot is pointed in.

Take note of when such gestures occur. Doing so will allow you the insight to shift and control the conversation.

Conclusion:

At the beginning of this article, I posed the question of how attuned are you to the body language secrets that people emit every day. As you see, there are many signals that you might observe. And, if you’re aware when such signals occur, you’ll have greater insight into the mindset of the people you interact with. That will allow you to better understand them and communicate more effectively. Plus, it’ll give you an insider’s roadmap into their thought process and where it’s headed. That too will allow you to help them upon their journey or exit because you choose not to accompany them. Either way, you’ll have greater control of the environments you’re in … and everything will be right with the world.

 

Remember, you’re always negotiating!

Listen to Greg’s podcast at https://anchor.fm/themasternegotiator

After reading this article, what are you thinking? I’d really like to know. Reach me at Greg@TheMasterNegotiator.com

To receive Greg’s free “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here http://www.themasternegotiator.com/greg-williams/

 

#Body #Language #Secrets #Negotiate #Process #Business #Progress #SmallBusiness #Negotiation #Negotiator #NegotiatingWithABully #Power #Perception #emotionalcontrol #relationships #BodyLanguageExpert #HowToNegotiateBetter #CSuite #TheMasterNegotiator #ControlEmotions

 

 

 

 

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Best Practices Investing Marketing Personal Development Sales

Does Your Customer Know Your Offer is Mission Critical?

If the statement below should resonate with your customer, you probably operate in a mission-critical sales environment.

 


“(What I sell) is Cheap. It’s Trouble that’s Expensive”.

 

The mission critical sale is when your offer can affect your customer’s business or operations in some significant way. Note the emphasis on “should” and “can”; I’ll get to that later on.

Examples might include:

  • Complex/Technical capital equipment
  • Medical tech and new technology
  • Custom & Semi-custom products & services
  • Differentiated components
  • Corporate software, including SaaS/cloud delivered.

The Mission-Critical Sale Moves Beyond Consensus Selling. 

Full disclosure: I’ve been selling and consulting in “the complex sale” (aka consensus selling) for decades. I understand it and am a huge fan.  I’m beyond “drinking the Kool-aid”. I’m marinated in it.

I also know what consensus selling methodologies are and aren’t.

They are for organizing opportunity pursuit strategy when a buying ecosystem — multiple personas – is making a group buying decision. Usually, this ecosystem is made up of personas somebody thinks should be included. Unfortunately, complex selling methodologies often assume that “somebody” defined the group properly.

Complex sales methodologies aren’t for expanding a buying ecosystem strategically (methodologies accommodate expansion just fine, they just don’t teach it). Typically, companies buy in organizational silos, applying a self-imposed set of blinders to their decision. Thus, they buy too narrowly, engaging prospective vendors constrained by their own narrow perspective. It’s not your customers’ fault: they aren’t experts in your offer’s capabilities and don’t understand all of its implications.

When One Silo Has Budget, But Many Silos Benefit

Unfortunately, selling organizations who blindly accept a predefined buying ecosystem almost always overlook potential stakeholders. This is for a variety of reasons, but the result is that sellers miss potential differentiation leaving value unrecognized. Consequently, opportunity strategy under-powered…a potentially mission-critical sale is reduced to a run-of-the-mill complex sale.

  • Imagine this scenario: You’ve gained consensus from your regular personas, to the point of mildly irritating the purchasing agent. Proudly, you know what every persona wants, and each feels your offer fits their needs. It’s smooth sailing until your coach calls: you’re on the outside looking in. Astonishingly, a competitor has penetrated throughout the organization — to departments you didn’t even know cared — and somehow to executives who told you that the personas you were working with were “the right team”. Worse, their proposal was higher priced than yours, but articulated business outcomes just too compelling to ignore. You followed your “consensus selling methodology” perfectly, but the competitor boxed you into a corner that you couldn’t even discount your way out of.

Again, consensus selling methodologies help organize all personas you identify. Unfortunately, they don’t teach anticipating and proactively adding new players to an ecosystem. In contrast to methodology, “buyer enablement”: helps customer organizations make better, more well-informed decisions.

Admittedly, expanding the buying ecosystem increases decision complexity. However, don’t make the mistake of thinking that’s always a bad thing.  Adding the right people means adding allies…packing the court in your favor.

As I said, I’m marinated in complex selling methodology. It does its job (organizing a given group decision dynamic) really well. For the mission-critical sale, though, today’s methodologies need a specific boost: understanding when, where, and how, and why to change the decision dynamic — and to what.

It’s Not Harder or More Complex. It’s Just Value-Focused

In some ways, value-focused selling is easier. For example, coaching simplifies down to one question “what’s the value?” (OK, sometimes asked over and over like a child asking “why?”) . If your sellers can articulate a complete value picture, they’ve probably performed all of the selling methodology steps just fine. Focusing on value yields a deep understanding of the motivations behind the consensus decision.

  • I’ve analyzed and coached perhaps thousands of Miller Heiman Group Blue Sheets. A recurring rep shortcoming is understanding persona-specific Business Results and Personal Wins. Critically, not understanding desired outcomes, and how customers value those outcomes means reps can’t genuinely understand the group decision.
  • Similarly, experienced TAS practitioners echo similar deficiencies in users of that methodology. Typically they uncover missing/incomplete Unique Business Value, Critical Success Factors, Compelling Event, and Economic Value Proposition. Again, these are all failures to understand customer value.

I could repeat for other methodologies, but the trend is clear. Salespeople capture groups, but not the value that drives their decision. Worse, they don’t build complete value high and wide in customer organizations.

What if, instead of switching to a new methodology (when the ones out there are fine for organizing a group buying decision)…what if you could just incorporate the missing value conversations into your existing process? Wouldn’t that be a high-value, low interruption, easy-adoption initiative? In fact, this is the elite selling behavior most mission-critical salesforces are missing.

Separately, for those without a methodology in place, what if you start your team at the core of sales–value–then work outward to managing the customer’s decision dynamic as needed? Remember, customer value is what moves all buying decisions — from transactional to mission-critical. Developing your sellers’ “nose for value” is the pivotal skill in any sales environment.

Not All Mission Critical Sellers Act Like It

Earlier, I promised to come back to the words “can/should” in “your offer can affect your customer’s business…”. Here’s the thing: many organizations who sell potentially mission-critical offers don’t sell like their offer is mission-critical. They don’t make it mission-critical for the customer(a la the seller in the lost deal scenario above). Rather, they go through methodology-mandated motions without connecting solution to value, building value, and extending value organization-wide. This leaves deal-winning value – and pricing power – on the table. I’ve managed too many P&Ls to accept this shortcoming.

One of the reasons I focus on the mission-critical sale is that the ROI on “increasing pricing power” is staggeringly high. Notably, this is because pricing dollars are profit dollars. Gaining pricing power is a conversation that CEOs, CROs and COtBs want to have, and I find those conversations a lot more rewarding (OK, valuable) than ones with sales enablement and L&D professionals comparing complex sales methodologies. One sounds more mission-critical than the other, no?

So, want to talk about it? Contact me.

To your success!

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Best Practices Entrepreneurship Investing Management Marketing Negotiations Sales Skills Women In Business

Dirty and Cruel Negotiator Tricks That Will Blow Your Mind

“Magic tricks can be mind-blowing – until the other negotiator blows your mind by making your favorable outcomes disappear.” -Greg Williams, The Master Negotiator & Body Language Expert

Have you been in a negotiation that you thought was over – only to discover that it wasn’t – there was one little thing that needed addressing? It might have been, someone wouldn’t sign off on the deal. Or, maybe it was, ‘the last one was just sold.’ Your reopened negotiation might have taken on any variation of the last two excuses. More than likely, the excuses were contrived, already baked into the negotiation plans of the other negotiator. If you let such tricks bother you, they can blow your mind.

The following is how some negotiators use such tricks and how you can protect yourself against them.

The Cheat: Someone that’s dishonest or someone that uses the deal, no deal strategy

Challenge – Some negotiators are downright scoundrels. Their main strategy is figuring out how they can cheat you. They’ll use such tricks as concluding a deal, waiting until the covenants of the agreement are due, and then back out or request slight concessions. You can sue them for not abiding by the agreement but that means you’ll waste more time dealing with them.

Response – This person can be extremely difficult to deal with – if possible don’t deal with him. As in any negotiation, you should have background information about the other negotiator. Part of that due diligence should be uncovering his negotiation style based on his past negotiations. If he’s used cheating tactics in the past, they should be easy to uncover.

If avoiding him is not possible, observe how he responds throughout the negotiation. Such individuals may be very accommodating when engaging you – they’re setting you up for the cheat to come. Use time as your ally – stretch the negotiation out. At intervals, have deliverables that he must meet before the negotiation can occur. If he welshes at any interval, let that serve as consideration to abandon the negotiation. To better insulate yourself, front-load his deliverables to guard against you investing unnecessary time in the negotiation.

Moving Target:  That’s not what I/you said.

Challenge – The negotiator that employs this tactic can use it in different forms. She can play the confused person, “I don’t know what I was thinking – that’s not what I meant.” Or, she can attempt to paint you as the bumbling idiot – “how in the world could you have inferred that? I would never make such an offer.”

Response – When she uses either form of this tactic, stop her – explore how the point of miscommunication occurred. Then, note to what degree, if at all, it occurs again. If it does, ask her if she’s intentionally miscommunicating with you. If she becomes flustered, so be it. Get the tactic out and in the open. You’ll disarm her use of it by doing so.

Time Delayers: I’m sorry. I’m not ready to continue. Can we postpone until next week/month?

Challenge – Every good negotiator knows, the more time you put into a negotiation, the more energy you’ll spend in seeing it to its conclusion. Therein lies the trap. Because, the more time you spend, the more likely you are to make concessions.

Response – Note the reasoning behind the request to delay the negotiation – seek its validity. You might consider raising the question about your negotiation counterpart seeking other offers, etc. Observe how he responds. The point is, test his request for an extension to assess its validity and to prepare for what may lie ahead. Don’t get sucked into the black hole vortex of time. You may regret it if you do.

Conclusion: Protect yourself.

The above strategies are acceptable forms of negotiating in some environments. Thus, what might be a dirty cruel trick in one arena might be thought of as a normal way of doing business in another. Therefore, be aware of the customary negotiation practices of the environment you’re in. Doing so will allow you to heighten your sense of awareness per that environment … and everything will be right with the world.

Remember, you’re always negotiating!

Listen to Greg’s podcast at https://anchor.fm/themasternegotiator

After reading this article, what are you thinking? I’d really like to know. Reach me at Greg@TheMasterNegotiator.com

To receive Greg’s free “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here https://www.themasternegotiator.com/greg-williams/

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Influence: How to Surprisingly Win More in a Negotiation

 

“To win more negotiations, use the power of influence.” -Greg Williams, The Master Negotiator & Body Language Expert

During a negotiation, you, and the other negotiator attempt to influence each other. Thus, you should always place a high value on using influencing strategies. You can increase the value of your negotiation outcomes by using the influence techniques that follow.

Psychologists have identified six forms of power that you can use as sources of influence in your negotiations. They are:

1. Coercive power

(threats & punishment) – With this form of power, you can force the other negotiator into a position of acceptance. But you should be mindful that you’ll more than likely not make a friend of him. Plus, by using threats and punishment as incentives for acquiescence you may become perceived as a bully – this may heighten your opponents need to seek pay-back. If that’s not a concern, recognize when this source of power is a viable influence tool. Just be aware of its blowback danger and how you use it.

2. Reward power

(ability to offer incentives) – Reward power can be very temporary. Its value will decline as the perception of the reward devalues. When using rewards as a source of influence, do so from two perspectives.

  1. Positive – “This is what you’ll get, something pleasant if you give me what I want.”
  2. Negative – “This is what you’ll lose if you forego my offer.”

3. Legitimate power

(influence based on your position or title) – The challenge with legitimate power is, one must accept it before it has authority. Therefore, if you have a position or title that’s not perceived as being valid, you’ll have little influence when attempting to use it in a negotiation. When using this source of power for influence, be sure to cast it in the light of perceived validity before the negotiation. That will enhance the respect and appeal of this power.

4. Referent power

(influence based on your likability or admiration) – People that possess an affable personality tend to become better received by others. While reverent power has its place on the influence scale, some negotiators will dislike you for possessing this attribute. To have this influencer serve you better, balance it based on what’s occurring in the negotiation. When it suits your position, be reverent. When it doesn’t, discard it.

5. Expert power

(influence based on your knowledge and skills) – The perception of expert power can be fleeting – because it’s situational. It lasts for the time that your knowledge is needed. In a negotiation, if a seller or buyer can acquire what she seeks from another provider, your power erodes. When using expert power, be strategic. Use it sparingly in situations that are warranted.

6. Informational power

(not tied to your competence) – This can be power derived from ideas, opinions, access to thought-leaders, and influential people you meet and have access to. This form of influence is most powerful when the other party wants access to the information you possess. Its power becomes enhanced when you’re the only source that can grant access to what’s sought.

As in any negotiation, the manner of influence you use should be determined by the personality type that you’re negotiating against. Thus, to be more influential, you must know what will motivate that individual. One way to determine that is to evaluate whether the person is a giver or taker – the giver seeks power for the sake of helping others – the taker does so for the benefit of himself.

Once you have that knowledge in hand, you’ll have the key to which combination of influence to use. That will lead to more winning negotiation outcomes … and everything will be right with the world.

Remember, you’re always negotiating!

Listen to Greg’s podcast at https://anchor.fm/themasternegotiator

After reading this article, what are you thinking? I’d really like to know. Reach me at Greg@TheMasterNegotiator.com 

To receive Greg’s free “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here http://www.themasternegotiator.com/greg-williams/

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Best Practices Body Language Entrepreneurship Human Resources Investing Management Marketing Mergers & Acquisition Negotiations Sales Skills Women In Business

Shoulder Shrugs Can Expose Scary Secrets in a Negotiation

“Shoulder shrugs expose secret information. Notice them to detect their secrets.” -Greg Williams, The Master Negotiator & Body Language Expert

Have you heard the cliché, “what you don’t know can’t hurt you”? If you have, do you subscribe to it? If you do, you shouldn’t. Because, a lack of knowledge can expose you to scary secrets in a negotiation – secrets that can bite you at the most unsuspecting points in the negotiation. But, there’s one way you can protect yourself. How – by accurately interpreting the meaning of shoulder shrugs when you negotiate.

Shoulder shrugs convey secret information. They expose hidden thoughts of the person that’s attempting to hide those thoughts.

Observe the following shoulder shrug examples. You’ll obtain hidden information that those shrugs attempt to conceal.

When a person displays a shoulder shrug, it can represent a multitude of hidden meanings. It can be a sign of reluctance (i.e. what more do you expect of me) – a sign of protection (i.e. I’m not going to stick my neck out) – it can also be a sign of exasperation (i.e. I’m getting tired of this). Regardless of the hidden meaning, it gives additional insight into the thoughts of that person.

Single Shrug: A single shrug can denote a lack of full commitment in response to a question or statement made.

Leaning Preference

  • When displaying a single shoulder shrug, a person will tend to favor their dominant side. This is important to note – because it adds additional meaning to the shrug. As an example, if someone that’s right-handed shrugs their left shoulder, he may be displaying less of a commitment to the response that caused the gesture. As with everything related to reading body language, you must establish someone’s body language foundation before you can accurately assess the validity of their actions.

Double Shrug: A double shrug (both shoulders elevated) can connote more commitment to a reply or statement.

As an example, if one elevated both shoulders while stating, “I didn’t do it”, she’d be displaying more commitment to the statement then if she displayed a single shrug – note: to discern the probability of the truth you should still probe deeper. The act of the shrug is that person’s commitment to her pronouncement at that moment – it can change with further probing.

Leaning Preference

  • When someone performs a double shrug, that person’s hands provide additional insights. As an example, if an offer is made consisting of two items and the recipient says, “I don’t care”, while shrugging with one hand higher than the other, he’s nonverbally expressing a preference for one of the items – the preference lies in the order the items were offered or their proximity to the hand that’s higher.

Additional Shrug Meanings:

Hands: The movement of someone’s hands lends insights into their thoughts. To gather additional awareness per the meaning of a shrug, take note of …

  • hands close to the body – indicates they’re guarded
  • hands palms-up – signals they have less to conceal
  • hands palms-down – they’re less accepting
  • hands palms-up-and-out – says, keep away from me

Head Tuck: To observe how threatened someone might feel when they shrug, note the degree they protect their head when …

  • head extends forward – says, I’ll challenge you
  • head to one side – denotes preference
  • head straight up – states, I’m willing to expose more of myself
  • head tucked – says, I’m making myself less of a target

Of course, the additional shrug meanings can conceal someone’s real intent. That’s because good negotiators can affect this maneuver to add perceived emotional credibility to their effect.

Shrug Time:

Always note the length of time a shrug lasts and the number of times they occur. The length and number of times will indicate a person’s ever-changing degree of angst or determination to get you to back off. In all cases, they’ll be signaling information that you can use to enhance the negotiation.

Action Item:

Start noticing when, under what circumstances, and how frequently people shrug their shoulders. Doing that will increase your attentiveness and skills about this behavior. That will allow you to become a better negotiator … and everything will be right with the world.

Remember, you’re always negotiating!

 Listen to Greg’s podcast at https://anchor.fm/themasternegotiator

After reading this article, what are you thinking? I’d really like to know. Reach me at Greg@TheMasterNegotiator.com

To receive Greg’s free “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here http://www.themasternegotiator.com/greg-williams/

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