B2B negotiations are complex. The more if you’re selling high ticket items like software (say a core banking system) or industrial fuel. For this reason, business owners should arm their salespeople adequately. Across the 7Ps as we shared, yes, but beyond that, prep together as a business not as Sales only. B2B negotiations are a business-wide responsibility.
B2B negotiations are a business-wide responsibility
When a customer asks for a discount, an ill-equipped sales person, seeing the engagement as just another sale, or focusing only on targets, will often concede too quickly.
That’s until the sale is reported and Finance hits the roof. “Do these salespeople know what they’re doing? We cannot sell a suite at that price. Even a deluxe room doesn’t go for that. Cancel that order.” And so, the already existing tension between Sales and Finance is heightened.
The cost of ill-equipped salespeople
Salespeople don’t see cost. They see sales (revenue). I remember once when we were selling a premium bank account whose brochures were imported from South Africa at a thousand shillings apiece. Glossy and all, they were consistent with the brand and inviting to want to ‘own’.
We had sales people that would carry easily up to 10 pieces while going out to the sell reasoning, “With all this glamour surely when they see this brochure they’ll buy.” And just like that they’d dish out the brochures and wait for the sale. But, yes, you guessed it. What they would get instead was and objection: “We’ll get back to you after we read them.” Of course, they never did. Brochures don’t sell; salespeople do. But brochures cost and in that one day, that one salesperson had just dished out 10,000shs! (If you justify this as a marketing cost you just be a salesperson – not business owner).
Floors, ceilings, and walkaway points
So, as I was saying, salespeople don’t see cost. It therefore behoves the business to arm its salespeople adequately with a floor, ceiling, alternatives and a walkaway point.
The floor and ceiling will involve the highest and lowest price points the salespeople can negotiate within. Be sure to encourage them though: “Go in with and stay at the ceiling. The floor is a last resort.” If you don’t, they’ll likely start with the floor, go lower and come back defending their sale of a suite below a deluxe price with, “They were getting a better offer from the competition;” while silently wondering, “It’s not like the suite had a guest anyway.”
But floors and ceilings aren’t just prices. They have to be informed by cost. If we are going to give 90-day support (people) for the installed software for free, it may look like cost free but it’s not. There are hidden labour and overhead costs. Finance should price this and factor it into the floor and ceiling. The same goes for the other Ps as applicable. (Promotion, process, place, physical evidence). Without this alignment, sales decisions remain blind to business realities.
You can tell by now that prepping the salesperson for negotiation is not to be taken lightly. It needs to be thought through by the business not just salesperson.
Balancing Sales, Finance, and Operations
Now to be Farr, left to their own devices Finance and Operations are no saints either. They see things in black and white. Yet customer engagements are shades of grey. So as much as possible, again depending on the complexity of the product and its price, the prepping should have a neutral person that sees business sense. Someone that can say, “That’s too rigid. It may be a loss but with the current state of the economy we’d rather sell at cost than lose the sale.” Or, “If you feel the potential of the business deviates from these set parameters let me know. Better still build a business case for me. Don’t shut it down prematurely.”
This balance ensures that the business doesn’t just chase numbers but pursues sustainable growth.
Alternatives: creating wiggle room
Alternatives give manoeuvring room to allow the salesperson to say, “For that price what we can do is give you the bronze package. As your cash flows improve, we’ll be happy to upgrade to the silver.’ Or, “All is not lost. We’re keen on doing business with you. So, why don’t we keep the price at the same point and we will promote your new business on our website which has very high traffic of your target market. Based on our analytics it’ll get you business. I’ll just need to run the proposal through the Head of Commercial but it should be fine.” And in his business case to the Head, the salesperson demonstrates how creating business for this new client automatically creates business for them in tandem.
Alternatives don’t just end there. They can also include, “We don’t seem to find a point of convergence on this product and that’s OK. It doesn’t mean we can’t work together though. Why don’t we do the consultancy services for the new software you wish to install.” In this instance, the salesperson walked in to sell one product but ended up selling a completely different one.
Alternatives ensure that no engagement ends in total loss. Instead, salespeople can reposition the conversation to preserve relationships and revenue.
Walk away point: building reputation in B2B negotiations
The walkaway point is the point at which the potential 100-million-shilling facility to build a bar and casino, no matter how inviting, we cannot take. And why? “It’s not Shariah compliant.” Or, “They’re asking for a bribe and we don’t bribe.”
Again, an ill-equipped salesperson may think, “Much as we do asset financing, I know we don’t lend for purchase of tuk-tuks, but I’ll convince them to accept.” He tries. They don’t. And now he has to disappoint a customer whom he had given false hope.
B2B Negotiations
Prepping salespeople for B2B negotiations cannot be left to chance—or to Sales alone. It requires cross-functional preparation, alignment on costs, clear negotiation frameworks, and viable alternatives. When Sales, Finance, and Operations pull in the same direction, negotiations stop being battles and start becoming opportunities.
If you would like to have your sales team sell more, we can help. In order for us to do so we propose a free consultation meeting or a call. If in agreement please complete the form below and we will get in touch after receiving your details, none of which will be public. Thank you.
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