The Expanding Purchasing Power of the Non-IT Buyer in Technology Purchase Decisions

How to Adjust Your Sales Strategy for More Complex Terrain

In our recent executive brief, “Six Ways to Shorten the Sales Cycle,” one of the prime takeaways is the importance of tailoring your technology sales and negotiation process to the increasingly complex customer decision landscape. In great part, this is due to the expanding involvement of multiple people (and functions) in the decision process.

IDC underscored an important sub-trend to this reality in their Spring 2018 update to the Worldwide Semiannual IT Spending Guide: Line of Business: “Businesses are forecast to spend $1.67 trillion on technology (hardware, software, and services) in 2018. Roughly half of that spending (50.5%) will come from the IT budget while the other half (49.5%) will come from the budgets of technology buyers outside of IT. The former includes IT-funded purchases as well as joint projects funded by IT. The latter includes business-funded purchases as well as joint projects funded by line-of-business (LOB) buyers and “shadow IT” projects funded by the LOB without IT involvement. LOB technology spending has been growing at a faster rate than IT spending for a number of years. The compound annual growth rate (CAGR) for LOB spending over the 2016-2021 forecast period is predicted to be 6.9% compared to the 3.3% CAGR for IT spending.” Read more

Speaker Motivation

The Power of a Great Keynote: Inspiring and Focusing Your Audience

There are always three speeches for every one you actually gave. The one you practiced, the one you gave, and the one you wish you gave. Dale CarnegieKeynote speeches — like the ones that kick off a big sales drive or annual meeting — are fantastic opportunities…that aren’t always leveraged to their fullest.

Most executive leaders will take to the podium assured that the top-line strategic messaging of the day, a sprinkling of humor and a few perfunctory rallying cries for the troops will be in their notes.

But is that good enough?

While attendance is sometimes mandatory, every leader has the responsibility to do more than “check the boxes” with a speech so he or she can get on with their day. The speech must deliver value. This is central to everything we do at K&R Negotiations: analyzing the audience and goals to determine what impact an activity will make.

The “warm fuzzies” generated by even a great keynote speech will quickly subside with the event, but here is a central consideration that will make the activity more powerful: “What value will I deliver outside of the messaging, humor and applause lines?”

Speeches that are measured by the hour will die with the hour. Thomas Jefferson

A few years ago a friend of mine, George Kohlreiser, gave a speech about the consequences of holding on to things that were comfortable because they were familiar; things that were always done a certain way. He likened it to holding yourself hostage, a condition that stifled creativity and prevented the “hostage” from dealing with difficult issues and people. The speech was so powerful that it inspired me to take steps to deal with some challenges in our business. Confronting these challenges resulted in one of our best years ever.

Two Critical Questions

Ask yourself two important questions as you vet speakers or work on a draft for yourself:

  1. What will my audience know that they didn’t know before? Corporate boilerplate does not count. Value is delivered when you make your audience feel as though they are discovering some new insight — maybe even a secret — that tells them they are receiving thoughtful analysis tailored just for them — that their view of the world has suddenly expanded because you have let them in on something. This is the kind of hook that made the Ted Talks series so successful — they offer surprising shifts in knowledge and perspective, having both intellectual and emotional components.Keeping this guidepost in mind will steer you away from the conventional “laundry list” of objectives, goals and milestones that are too often used as filler.
  2. Will my audience know how to do something that they couldn’t do before? One of our chief goals in business negotiation training and workshops is to make sure that every single person walks out the door ready to apply a few key principles. We know we have done our job when sales managers report back on their success. This is the key proposition for focusing any kind of communication: What do I want the person listening to actually do, and how? Supporting your talk with tactical takeaways gives your speech lasting power beyond the temporary fizz of applause.

The distinction between a good speech and an inspiring and action-producing speech was illustrated in classical times: After the Roman statesman Cicero spoke, the people said, “How well he had done!” but when Demosthenes had finished speaking against the oppression of Phillip of Macedon, they said, “Let us march.”

The greatest compliment I can receive is not for someone to say, “I loved your talk at the ABC conference,” but rather, “Your talk gave me great insight that I put to use. I just had my best year ever.” Giving your audience something new to know and something immediate to do (getting them to march) will help you deliver a keynote with lasting value.

Mladen is a powerful keynote speaker. Learn more about how he can help your organization. 

To Win the Deal, Add Personal Value to Your Negotiation Strategy

Effective, persuasive communication is fundamental to building winning deals. When you are understood and believed, you greatly increase your chances of gaining leverage and having your value argument accepted by the other side.

However, we make a mistake if our communication doesn’t recognize two kinds of value:

 

  • Company value to the other side
  • Personal value to the representative of the other side

You generate company value by making the deal beneficial to the customer’s organization. Read more

Fighting for Your Value: The Negotiation Wisdom of Bernard Hopkins

On the eve of his November meeting with feared Russian light heavyweight Sergey “Krusher” Kovalev, the New York Times took a fascinating, in-depth look at the 49-year-old who was about to step in the ring against Kovalev: Philadelphia’s Bernard Hopkins.

It was a chance to learn about the hard-won wisdom and discipline that had made him not just an expert boxer who could seemingly defy time, but an expert businessman. Boxing is often called the “cruelest sport” for the punishment that boxers absorb in the ring. It’s also financially unforgiving. The destinies of top fighters are managed by a handful of powerful and (sometimes) corrupt promoters. Even seemingly handsome six-figure paydays get gobbled up by managers, trainers and promoters. Only a few rise to wealth and fame, and many of these stars still see their massive fortunes vanish. Read more

Defining Value in Negotiations: K&R’s ViO™

“We’re giving you $100K of value for only $60K. This is a good deal!” How often have you heard that sales pitch?

Of course, this has nothing to do with business value. Value is derived from outcomes, and a statement like the one above derives from price. Yet defining value is one of the most critical negotiation steps. The strength of your value argument is what ultimately decides your ability to establish a uniquely defensible position and command your own price. Our negotiator training stresses that without a compelling value argument, you’re vulnerable to continued discount requests from a potential customer and price cutting wars with your competitors.

As a basic exercise in defining sales value, use this simple equation as a test:

BENEFIT – COST = VALUE

If you fail to calculate the benefit, then the buyer will look exclusively at the cost. Read more

Negotiation Examples: Preparation is Key

sales negotiation

Often, successful sales negotiations rest on preparation. How do you go from hard work to successful outcomes? What’s the actual process? It’s preparation.

Preparation means always gathering information to gain an understanding of the motivations and objectives of the other side as well as our own. Without this understanding, we’re merely guessing at the terms (the requirements) that might satisfy the other side. How can you solve the other side’s problems if you don’t know what they are?

Good preparation also gives you confidence. Read more

Negotiation Examples: Building a Value Case

 

All negotiators should build a value case for the positions they would like the other side to accept.

As a buyer, you would like the seller to understand the value of doing business with you because, for example, you are a flagship account and a reliable customer who pays on time.

As a seller, if you don’t build a value case for the product or service you’re selling, the buyer may not see that value. Even if they see the value, they may see it very differently than you do or they may not acknowledge it, since acknowledgement of value gives you leverage.

In addition, failing to articulate value may affect your credibility. The buyer may feel you are not listening to what matters to them – and, as a result, you lose credibility. Alternatively, in acknowledging the value impact to a customer, you gain credibility by showing them you understand what they consider important.

Articulation of value requires you to know something about the other side. The more you know, the better – especially in a negotiation. Knowledge is power. You have to know the gaps the customer has to fill – and then fill them. When you use value properly, you’re usually successful. Read more

Shaping Your Value Argument

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. Read more

Negotiation Tactics: Discovering the Hidden Value in Client Requests

While at the negotiating table, sometimes the rush to provide a client with whatever he or she has requested without discussing the value of the request is a study in blown opportunities. This is illustrated by a recent discussion we had with a client regarding the case scenario below.

Our client was in negotiations with a customer about adding some content to an existing contract. The sales team wanted to close it by end of May. The customer’s procurement organization was involved. In the first week of May, the procurement director stated: "We might be interested in closing before the end of the month." The sales person responded: "That sounds good. What will it take to get that done?"

Read more

Negotiation Leverage to Win Deals

negotiation leverage
To Keep Leverage and Win Deals, Know the "Physics": The K&R Leverage Slope™

The concept of leverage originally comes from physics, referring to levers in a pulley system; the more you have, the more easily you can move objects of heavier mass. In negotiation, it’s the ability to move people closer to your way of thinking – your value arguments are your levers. The more credible value arguments you have, the more easily you can move people closer to your point of view.




Watch as Mladen Kresic discusses negotiation leverage and uniqueness in this short video.

What exactly is leverage? At K&R Negotiations, we’ve developed the concept of the Leverage Slope, defining the relationship between the buyer – who wants an optimal solution at the lowest possible price – and the seller, whose goal is the best price for their product. Read more