Can we agree that making the customer negotiate with the boss is stupid? No customer has ever said how much they loved negotiating with “the boss.” As I promised in the video, let’s fix stupid.
“Boss Negotiation” happens because the boss doesn’t trust the salesperson to make an acceptable profit on the deal, so the boss must be “the bad guy” in order to help the salesperson hold price. I have a sneaking suspicion that many sales managers do this because they like the control, as well.
The problem is that this disempowers the salesperson and makes the customer think, “Well, why don’t I just talk directly to the boss?” In fact, many customers say this outright.
It’s wasteful for the salesperson and annoying to the customer.
Worse, in my experience, the achieved final price actually ends up LOWER than what it is when the salesperson handles their own negotiation – thus defeating the purpose (I think this is because the salesperson is so devalued in the customer’s eyes). So, how about we stop doing it? Here are a few keys to getting away from this:
If you are the sales manager:
- Teach your salespeople how your company makes money. I don’t just mean that you sell goods and services at a price; teach your salespeople about all of the moving parts that go into generating an acceptable profit. I find that most salespeople will be good agents of the company and protectors of the company’s profit if they know this information. Keeping them dumb is dumb.
- Establish pricing guidelines that salespeople can use in the field so that they don’t have to come back to the batcave to get pricing and proposals. When salespeople can quote price on the spot, they become more important in the customer’s eyes. Part of this process is having a high/low set of guardrails around pricing – or even better, a pricing matrix like the rate cards used in advertising and media with brackets for pricing.
- Teach your salespeople how to quote price in a definite fashion and how to negotiate on their own. Yes – this means you give up some control. The time you save can be used to coach your salespeople and develop their skills; that’s a win/win.
- Make it safe for salespeople to say ‘no’ to bad business, and stand up for them when they do. There’s nothing worse than being a salesperson who says ‘no’ to a deal that the boss won’t accept – and then finding out later that the boss would have accepted it (because there is information you haven’t been told by your boss). Ask me how I know this. If the salesperson turns down a deal that’s outside the guardrails you set for them, it’s your job to stand by them and praise them for making a good decision.
- Finally, say ‘no’ as a last resort for when salespeople come in with a bad deal. If you’ve done steps 1-4, they already know that they are bringing you a bad deal, so the ‘no’ won’t be a surprise. Even so, use it as a coaching moment to help them not bring you bad business in the future.
If you are the salesperson:
- Be a businessperson that is a good steward of company profits, not just a salesperson who is trying to get any deal that you can. This means being assertive about learning how your company makes money and the role that you play in it. Then live it.
- Don’t make anyone else “the bad guy” in negotiation. “This is what my boss needs me to do” shouldn’t come out of your mouth. “This is what I need” or “This is what my company needs” are acceptable – YOU are the representative of your company.
- Hold price and don’t bring your boss junk deals. The principle here is that you, the salesperson, are trustworthy and able to be a good guardian of profit. So be that.
- Don’t ever sell JUST on price. You should be able to come up with at least two solid non-price reasons for the customer to switch their business to you. If you can’t, don’t bother – if you win them on price, you’ll lose them on price.
Selling this way is empowering and professional for the salesperson and sales manager, it’s a lot more fun, and it produces a better buying experience for the customer. And better buying experiences lead to stronger relationships and higher profits.