Mladen Kresic’s Article to Help You Achieve Greater Success in 2020

How to Craft a Pitch that Stands Out, was published at last week. Mladen discussed the circumstances under which you should attempt to sell to a customer who has an established vendor – and when to walk away. Specifically, he outlines four factors that, when addressed properly, can lead to a successful outcome.

Read the article and let’s have a conversation about how to make sure your sales negotiation efforts are rewarded in 2020.

Sell Impact or Don’t Sell at All

Negotiation Example: Seeing K&R’s ViO™ Formula in Action

At our BrightTALK Sales Expert webinar last month, I spoke about Six Ways to Shorten the Sales Cycle – you can listen to the replay hereOne of my key strategies is to make sure that you always sell solutions that impact the customer’s business.  Unfortunately, in the rush to close, sellers often forget that.

It’s not enough that you know/feel that you are going to have a positive impact – your prospect or customer must also accept this premise. The more the prospect believes that your solution lines up with their company’s own business objectives, the more likely you are to get a positive response to your sales efforts. In fact, the goal is to gain so much alignment that the entire process seems more like a successful facilitation towards a mutually-desired conclusion, and less like a hard sales pitch.

As an example of what not to do: Before engaging with K&R Negotiations – our client delivered a proof of concept (POC) to five different business units of the same company. Time and again, their prospect told them how impressed they were by how well the solution worked, and how much they liked it. Yet, the deal did not happen. Why you ask? Simply that the seller did not gain agreement from the prospect as to the desired business impact.

You can probably relate your own sad tales about how many sales reps (trained by sales managers who should know better) approach the sale as a solution hunting for a problem to be solved. We all get these calls where the sales rep immediately starts spouting the virtues of his or her product or service and how it will solve everything from peace to world hunger. And all this before showing any understanding of our business challenges and how their solution can assist us to fulfill our specific objectives. The message is “Buy from me now”, not “I’m here to serve you”.

We use the acronym ViO™ as a convenient way to show and present the value of business impact.

V = Value

i = Impact

O = Outcomes

Value is created when the measurable Impact of a business Outcome is greater than the cost to deliver that Impact. I talk about ViO in greater detail in a previous article

When you first understand the outcome the client is looking for, and demonstrate that your solution is measurably better (as defined by the client) than other potential solutions in delivering that outcome, the path to the sale is much easier. And always remember that when it comes to ViO, if the customer doesn’t know they have a problem, there is no urgency to solve it – meaning you will not get the sale.

A recent study called The High Cost of Buying Complexity from CEB (now Gartner), showed that the customer’s own expectations of the buying process are exceeded by 97%, i.e., the process takes 97% longer than expected. Interestingly, this is true whether the ultimate purchase decision is made or if the process results in no decision. You need to keep this in mind because one of the options you are selling against is for the client to do nothing. In the end, if the cost and risk of your solution is not substantially less than the business impact, a no-decision will often be the outcome. None of us wants to spend twice as long on a process that ends in no-decision.

Keep this mantra in mind and boost the success of your entire sales organization: before attempting to sell the virtues of your particular product or service, always start with discovering what your prospect is looking for in terms of business impact.  When you then show how your solution delivers that impact (measurable outcomes), the sales process will be smooth and profitable. For information about the other five strategies to shorten the sales cycle, listen to our recent webinar: Six Ways to Shorten the Sales Cycle: Reduce Complexity and Increase Win Rates.

Your Three Rewards from Effective Sales Negotiations

I’m occasionally asked by clients or business colleagues: “What actions can I take that will have the biggest effect on my top line (revenue) or bottom line (profit)?” This is a great question and cannot be oversimplified.  After all, no two companies are alike, and each set of solutions has different competition, sales ecosystems, etc.  However, there are concepts that are true for any organization regardless of circumstance. 

The short answer to the above question is to infuse the entire sales organization with the insights, strategies and techniques of effective sales negotiations. I answer this way because I have experienced and seen hundreds of millions of dollars in deals that have been achieved because individuals from reps, to sales managers, to CSOs and other executive team members, have understood and practiced positive sales and negotiation skills. That is why we have made our company’s mission to “improve our clients’ profitability by providing the tools and training necessary to win wisely in their negotiation activities.”  

As Hank Barnes of Gartner reports in The High Cost of Buying Complexity, both sellers and buyers are frustrated by the amount of time it takes to get to a decision. In fact, buyers report that it takes them 97% longer to buy than anticipated. Worse yet, many sales engagements result in a “no-decision” and leave both parties feeling frustrated and not likely to do future business.

The factors that lead to these poor outcomes include too much complexity in the sales process and the involvement of more and more individuals on all sides. Fortunately, learning about, and practicing, effective negotiation strategies can help you reap three big rewards.

Reward 1: Improved Deal Win Rates

Everyone, from the business development rep (BDR) to the sales rep, sales manager, and CEO, wants to see better close rates. Put simply, an improvement of 10% in this one area, if nothing else changes, can have a profound impact on your team, your customer and the productivity of the entire process. Improving win rates will also enhance your revenue and profit results. But what in your  sales negotiation quiver can help you get there?

One tool we use throughout the sales negotiation cycle is the Risk/Reward/Action analysis.  If the risks of action for the customer, i.e., of making a decision in our favor, are not overcome by the risks mitigated and the rewards gained of taking the action, it is highly likely that the deal will not close … unless we take steps to address those “risks of action.” For example, certain new implementations of technology solutions take too long and will jeopardize the customer’s return unless you can demonstrate that you have previously delivered the solution in a timely manner under similar circumstances. By looking at a risk/reward matrix early in the cycle, you can develop a strategy to mitigate risks or make a decision to focus on a different opportunity that has a higher chance of success. This will definitely improve your win rate!

Reward 2: Shortened Sales Cycles

Many sales people offer buyers deep and limited-time discounts, or other incentives to close deals by certain end-of-quarter or end-of-year deadlines. However, as discussed in my book, Negotiate Wisely in Business & Technology, the dynamic of shifting leverage is critical, especially in sales negotiations.  At end of your fiscal quarter or year, buyers almost always have the leverage because they know sales people are desperate to close deals and make quota.

As a result, the incentives sales people give are intended to help compel or motivate the customer to act. Then, by definition, any such incentive must expire by the deadline. Otherwise, the leverage doesn’t shift away from the buyer as the buyer is not being given additional reason to act. As we heard from a recent customer of one of our clients, “I’ll get the incentive anyway.”  If the incentive does not come off the table, there is no reason to offer it in the first place!

In fact, if you extend the incentives such as a reduced price beyond the deadlines you set, you will prolong the closing process, and impact both your credibility and your margins! Put yourself in the shoes of the customer: “If I am the buyer, I will not act until the benefit of my acting outweighs the benefit I perceive of continuing to wait for future incentives or better solutions.” This leads us back to building a compelling value proposition for your solution and relying on value-based leverage to compel the customer to make the decision now rather than waiting.   If you feel that additional incentives are necessary to close now, make sure they come off the table when “now” ends.

Changing the end-of-period incentive habit is a hard, but important, lesson to learn. That is why we prefer to utilize a principled negotiation strategy: one that uses only principled concessions (rather than arbitrary ones) that are made for credible business reasons that can be explained to the customer.  When the customer sees that you will only make principled concessions, they will feel more comfortable that they received a good deal when you decline their next negotiation request. This creates an environment in which the customer is less likely to ask for things that have no sound business rationale and in which both sides will know that the process has a rational end – and one that happens faster. This and five other strategies are explained in our executive brief, Six Actions to Shorten the Sales Cycle.

Reward 3: Better (and More Profitable) Relationships

Given how much of our life is spent negotiating, we should enjoy the process. This includes you and your prospect or customer. Fortunately, you can enjoy the process more if you know what you are doing, the goals you and the customer are after and why.  This enables you to have a principled negotiation approach that will  result in good relationships.  Good business relationships that result from successful negotiations lead to additional deals and greater revenues and profits.

We’ve all had the experience of dealing with a sales rep who insisted on pitching us in a way that has nothing to do with our needs. Don’t be this type of rep. If you properly focus on the Mandatories (what the customer really cares about) you will minimize conflict and reduce acrimony.

Even a customer who knows you have quota pressure, and has leverage because they have choices, will respect your effort to explain why and how your solution impacts their business.  After all, even if they like you, they care more about their business than yours! 

This is even truer when you have the leverage because they have no choice but to do business with you, either because they already standardized on your solution or because you are the only game in town.  If you win only because they feel they have no adequate alternatives, they may do business now, but will switch to another partner or supplier as soon as the opportunity presents itself.

However, if you win because they feel like they are getting value bacause your solution has a positive impact on their business, they will voluntarily continue to do business with you.  That is why you need to continuously affirm your value after contract signing (we call this Afirming Client Value or “ACV”).  ACV builds positive leverage for continuing your client realtionships!

What can be better than a sales negotiation process that results in higher win rates, shorter sales cycles and better relationships? This is the trifecta of good sales negotiations. Let us know how we can help.

Sales Negotiation

Business Negotiation: Three Questions that Will Shorten Your Sales Cycle

(This post is adapted from K&R Negotiations’ Six Ways to Shorten the Sales Cycle, a complimentary executive brief.)

Perhaps your strategy-level sales conversations have centered on how to shorten sales cycles. Many companies find themselves mired in protracted sales negotiations, driven in part by the expanding involvement of multiple people (and functions) in the decision process.

A recent article (The High Cost of Buying Complexity) cites CEB (now Gartner) research when saying that the customer’s own expectations of the buying process are exceeded by 97%, i.e., taking 97% longer than expected by those requiring the sought goods or services. This seems true whether the ultimate purchase decision is made or if the process results in no decision. In our experience, this is a result of changing priorities or organizations due to passage of time.

Decision to Purchase vs. Decision to Wait

Sellers and sales organizations are often their own worst enemy in this process.


Factor in the Decision Process – Make It Easier for Your Customer to buy

One of the most obvious errors we see is the lack of knowledge of the customer’s decision process. This falls on the seller; however, just as often, we see that buying organizations that need the goods or services don’t have a firm grasp on how to navigate their own processes. This is where a knowledgeable seller can help. They need to ask their counterpart at least three questions in the interest of realistic expectations.

 Three Questions Sellers Should Ask Buyers

“WProcess Iconhat is the process you will need to go through to get a decision?”


Length of Process“How long does it normally take?”


Decision criteria

“What criteria will be used to make the decision?”


We recently advised a client that projected a major deal to close in 90 days. The value proposition was compelling – the buyer would save millions of dollars per year in running their core banking system. When we asked about the process, this was the conversation:

Them: “The CIO will need to go to the board to get approval, but that is just a formality.”

Us: “How will the CIO decide whether or not to go to the Board?”

Them: “If we demonstrate we can actually do this and the savings are compelling. The business case on savings has already been discussed and we have a proof of concept running.”

Us: “Good! When is the PoC supposed to be completed?”

Them: “In one week.”

Us: “When is the meeting with the CIO to discuss the outcome of the PoC scheduled?”

Them: “The week after that.”

Us: “How often does the Board meet? When is the next meeting?”

Them: “Once monthly, however, due to a national holiday, the next monthly meeting will not take place. So, in about 6 weeks.”

Us: “And once the Board approves, will procurement issue a PO?”

Them: “No, they will issue an RFP.”

Us: “And how long will that process take?”

Them: “It has never taken more than 2 months from the RFP request.”

This team was taking an incredible risk and would likely be frustrated, along with the CIO. So, we discussed what could be done to compress this process in a collaborative way with the CIO’s organization. These included steps like:

Collaborating with the CIO’s Organization

CIO Collaboration Steps

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.

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. 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.

Asking the right questions and managing the negotiation process with key roles in mind will lessen the likelihood that your deal languishes on the buyer’s side of the table.

Download your free copy of Six Ways to Shorten the Sales Cycle.

Why Disruptive Deals Are So Difficult (And Why Yours Can Work)

In a 2012 Harvard Business Review article titled “The End of Solution Sales,” authors Brent Adamson, Matthew Dixon, and Nicholas Toman identified a new way of selling being practiced by the cream of today’s sales professionals—usually B2B salespeople attempting to land complex deals.

These prominent authors identified a small percentage engaged in what they call “insight selling.” In contrast to the classic “solution sale,” in which salespeople engage with purchase agents to discover salient needs and align their solution with those needs, this new breed of insight seller identifies needs that potential buyers may not even be aware of yet. They identify opportunities in areas of flux, offer “provocative insights” about the customers and their business models, and become “buying coaches” for their clients. Read more

Chief Procurement Officer Study: Implications for Sales Negotiators

closing big deals

The IBM Institute for Business Value recently released a new thought leadership study (Chief Procurement Officer Study: Improving competitive advantage through procurement excellence) Sellers who regularly deal with chief procurement officers (CPOs) or that CPO’s staff should read it.

The paper’s creators surveyed 1,128 CPOs from organizations with annual revenues in excess of $1 billion to understand how procurement has evolved at top-performing companies. The cost-cutting measures following the 2008 economic crisis increased the influence of many CPOs. In 2013, it is clear that top-performing CPOs have evolved beyond traditional procurement cost-reduction practices. Read more

International Negotiation: More About Preparing to Win

In our previous post on international negotiations, we discussed the critical importance of preparation and gathering facts. You can’t control all the factors, but you can control your knowledge base. The bigger that base is, the higher the chances for success.

As noted before, your charge as an international negotiator is to conduct thorough background work on everything that could impact your potential deal. This includes trying to account for cultural influence on business behaviors, regulations unique to that country, and more. Here we will suggest information sources that will widen your knowledge base and make you a more credible negotiator. In some cases, access to these sources may be limited due to considerations of distance or protocol. Read more

We Have Stuff. Buy it!

In our negotiation sessions, we often get into the discussion of how being so busy saying what you can do it makes you not busy enough saying what your client needs. In an example brought to us for comment, there was a good executive summary (well, not that good, but let’s pretend it was)… on page 18 of a 200-page proposal. If executive summaries show up on page 18, what comes first? Generally speaking, it is stuff about the seller and the seller’s offerings, and not about the client or the client’s needs. An executive would never reach it.

To make it worse, the “seller stuff” is in the wrong form. For example, the seller makes statements which are in concept like these:
• “Our coffee is fair trade.”
• “We roast and deliver daily.”

Instead of statements like these:
• “Your policy is to support reasonable returns for your suppliers. To support that, we offer coffee which we buy under fair trade guidelines.”
• “You told us your clientele is very sensitive to coffee freshness. We roast and deliver daily.”

We just reviewed a client proposal sheet for a multi-multi-million dollar agreement, and every line was about the supplier, not about the client needs.

The shorthand for the first approach is “We have stuff, you should buy it.” For the second, “We understand your needs and our offerings support them.” The first requires the client to make the connection between what you offer and their needs and interests. The second puts the client’s interests first, and then makes the connection for them.

We used coffee in our example, but these errors are all too common in our primary client set, high technology hardware, software, and services providers.

In many cases, the client can make the connection. However, your odds of success will improve if you help them along the way. Don’t say, “We have stuff”. Say, “These are your needs, and our stuff supports them.” You’ll be more successful with your clients. (td)

Got a question? Email a K&R negotiator directly at [email protected].

K&R’s Value Selling Poll

If you voted in our recent poll about selling with value, thanks!  Here are some thoughts about what our respondents said.  First, if you know us, you already know that we find that a strong value argument improves your leverage position, and enables you to ask (and get) a higher price for your product or service.  That said, you also know that sometimes you can’t differentiate your value, and as a result you will sell as a commodity – price will be the main selection factor.  What successful sellers do is this: Read more

The Trouble with Value

A recent Computerworld article covered a study done by the Harvard Medical School about the value of computerization in US hospitals.  The article led with the headline: “Computers don’t save hospitals money”.  This is not good news if you’re a seller of Information Technology solutions.

First tip: Be prepared1. You can expect to hear about this, certainly if you are selling in the health industry, but generally if you are selling the value of Information Technology to people who either have trouble believing in the value of IT, or for whom it is disadvantageous to admit it (for example, buyers in procurement roles).  The article will be used in attempts to undermine your value arguments, and thereby reduce your prices. Read more