Shaping Your Value Argument

Posted on December 7, 2011 | Filed Under Negotiating ValueNegotiation SkillsNegotiation StrategyValue | View the Print Version

Shaping Your Value Argument: Know Your Internal Audiences on the Client Side and Close the Deal

Relentless and thorough preparation is where negotiators on the vendor side shortchange themselves. It’s a major point of focus during our negotiation training, and one of the most critical aspects of this is considering the various groups of stakeholders across the table that need to understand and buy your value argument. Crafting your value argument – the ultimate answer to the question, "What’s in it for us?" – can fall flat and jeopardize the deal if your argument is presented with only one kind of stakeholder in mind.

The diagram below shows the relationship between roles, motivations (measurement concerns) and relative numbers of people that are typical at many lines of business.

negotiating value

Note that IT, where many sales calls are made, has significantly different motivations from the rest of the business. If a seller only focuses on IT’s motivations, their ability to drive faster closing and higher prices will be severely compromised.

The thought process for you as a negotiator is similar to that for your internal negotiations: Identify goals by individual, using their measurement systems as appropriate. Customers may set up conflict between their team and yours as a negotiating strategy (e.g. limiting contact of your team to their procurement side). Adjust your value arguments to the motivations of the person or people you are meeting with. Recognize that they may also have internal conflict. Do the proposed solutions support the desired relationship?

Typically less is known about the motivations externally than internally, at least at first. P&L (Patience and Listening) are key to determining the set of values that you must deliver to get the agreement. When value arguments are challenged by participants on the other side, make sure you meet the needs of the ultimate decision maker. Planning is every bit as important externally. Many diverse sources of information can help you uncover and consider your potential customers’ motivations.

Remember that the higher you go in a customer organization, the greater the span of control. As a result, getting sponsors at those levels gives you greater leverage in closing agreements. Research shows that senior executives get very involved in the decision process for major purchases. But that involvement is typically early and late in the cycle.

In the middle, delegation proceeds first to implementation staff, then (often) to Procurement for negotiation, then back to implementers before the executives are heavily involved again. (Source: "Selling to Senior Executives" survey, conducted by OnTarget™ with the Kenan-Flagler School of Business.)

To be a "Trusted Advisor," a seller must remain involved with the buyer team throughout the cycle, not just in proximity to when the agreement closes.

Executives perceive a "loyalty gap" when benefits that are discussed early in the "Problem/Vision" part of the cycle are not re-visited after the project concludes. If they don’t get feedback in the result, they assume that it did not meet the targeted benefit.

To be successful you have to be ready to make a valuable argument to each responsible party in turn. Leaving one out will only lead to stalling your agreement when that party is in charge – and lessen the likelihood of closing the deal you want.

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