CHAPTER 12

Negotiation and the Relationship Sales Cycle
Trying to reach an agreement based on mutual interest Use a win-win approach Negotiation takes place throughout each step or stage of the selling process
ATTITUDE TOWARD OBJECTIONS
Objection	An objection is anything the prospect says or does that is an obstacle to smooth closing.
WELCOME OBJECTIONS!	Learn to Accept Objections as a Challenge Which, When Handled Correctly, Will benefit you and Your Prospect. If You Fear Objections You Will Fumble Your Response Often Causing You to Fail. Prospects that buy have 58% more objections.
WHY PROSPECTS OBJECT
Psychological reasons	Dislike decision making Prefer old habits Reluctance to give up something old for something new Unpleasant past associations with you or your company Resistance to domination Perceived threat to self image
Logical Reasons	All or part of the presentation was misunderstood Prospect is not convinced Hidden reason (stall)
Question:	WHEN DO PROSPECTS OBJECT?
Answer:	Any Time During Your Sales Call - From introduction to close.

TYPES OF OBJECTIONS

Stopper Objection - no solution can be found

No
Need

This is widely used because it gets rid of the salesperson.
It is tricky because it also includes a hidden objection and/or a stall.

No
Money

Encompasses several forms of economic excuses
It is simple for the buyer to say.

When buyer asks for the price

Say that it is risky to discuss the product's price until it can be compared to the product's benefits.

----OR----

Quote the price and go right on selling.

Once you convey the benefits, price becomes a secondary factor which usually can be dealt with successfully.

The
Price / Value
Formula.

Used to determine if a prospect is or is not convinced the price is too high.
Price/value = cost

Cost

comparison of what is received to money paid.

Value

what the prospect sees the product doing for them.

No
Authority

Usually a stall
Screen for decision making authority early

You must determine if the statement is truth or it is a smoke screen designed to get rid of you.
One of the toughest stalls to overcome arises when selling a new consumer product.

Searcher Objection - A Valid Request for Information

"I am not interested"
"I don't have any money for this"
"We are satisfied with what we have now"
"I really like the competitor's product"

Searcher Objection - A Valid Condition of Sale

Sometimes prospects may raise an objection that turns into a condition of the sale.
"I don't like the color, size, etc"
"I need it by a next week"

Invalid Objections

Hidden objection

Prospect who asks trivial, unimportant questions
Prospect conceals feelings beneath a veil of silence.
The salesperson must ask questions and carefully listen in order to smoke out the prospect's real objection.

Stall
"Put Off"

"I'll think it over..."`
"I'll be ready to buy on your next visit"

8 Objections from justsell.com

1	lack of perceived value in the product or service
2	lack of perceived urgency in purchasing the offering
3	perception of an inferiority to a competitive offering
4	internal political issue between parties/ departments
5	lack of funds to purchase the offering
6	personal issue with the decision maker(s)
7	corporate initiative with an external party
8	"it's safer to do nothing" perception

Classify the Objection
Six Basic Categories of Objections	Product objection Objection to the salesperson Objection to the your company Don't want to make a decision Service objection Price objection
Other Classifications	Major or minor objection. Practical or psychological objection. Practical (overt). Psychological (hidden).
Some General Tips for Handling Objections
Keep the buyers attitude toward your product positive. Let buyers know you are on their side Help with objections. If you get no response, give a multiple choice question to display an attitude of genuine caring. Your goal is to help your prospect realistically examine reasons for and against buying now. The main thing is not to be satisfied with a false objection or stall. Bring out any or all of your main selling benefits now and keep on selling!
The prospect must agree that	They need your product or service Your product is the solution to my problem You are the person from whom I should buy Your company is the one to deal with The time to buy is now The price and terms are fair

Strategies for Deciding when to Answer Objections
Anticipate and Forestall Objections	incorporate objections and the answers in the presentation You should be certain that the objection will arise Prevents a confrontation and communicates objectivity
Postpone the Answer	Gives you time to present more benefits Allows you to maintain control Gives you time to think about the response Acknowledge the objection Employ empathy Promise to get back to the question Write it down
Answer Immediately Postponement of objections may result in:	The prospect not listening. The prospect feeling that you are hiding something. The appearance that you also feel it's a problem. The appearance that you're not able to answer because you do not know the answer. The appearance that you are not interested in the prospects opinion. The appearance that you are not sympathetic
Do Not Answer an Excuse	Serious objection will be repeated Not answering suggests that the excuse is not truly relevant
Disagree Without Being Disagreeable	Selling should be win-win Don't try to show up the prospect Challenge ideas without offending
	Remove blame by prefacing answer.	"I have not made myself clear......"
	Make a concession before taking exception:	"You raise an excellent point….."
Add all new objections to your database Share them with your cohorts

A Negotiating Strategy for Handling Buyers’ Concerns (A Six-Step Process)
Listen Carefully	Hear the Prospect Out
Confirm Your Understanding of the Objection	Validate the Problem Clarify and Classify Use confirmation questions Ask if there is anything else Try to distinguish between genuine objections and excuses
Acknowledge their Point of View	That is a logical question Restate or rephrase in your own words Use words such as, “I understand how you feel” Prepare the prospect for your answer
Select a specific technique Base your decision on:	The prospect's behavioral style Phase of the interview The prospect's mood The number of times that this objection came up The type of objection
Answer the objection	Confirm with the buyer that you have answered the objection
Attempt to Close	Continue the Presentation If You do Not Succeed

Specific Techniques for Handling Objections
Answers Based on Concrete Evidence
Product comparison:	compare advantages and disadvantages When the prospect is mentally comparing the present product or a competing product with your product, you may make a complete comparison of the two
case history or testimonial	Describe the experience of a customer whose situation is similar to that of the prospect
Demonstration	One of the most convincing ways to overcome buyer resistance and specific objections. Sometimes a second demonstration is needed to overcome buyer skepticism.
Guarantees or warranty	Removes resistance by reassuring that the purchase will not result in a loss. Guarantees must be meaningful provide for recourse on the part of the customer
cost of delaying	The prospect wants to wait a while before making a final decision. Use pencil and paper to show that delaying the purchase is expensive
Classic Objection Handling Techniques
Feel Felt Found Let a Third Party Answer.	Answer it by referring to a third party and using that experience as your "proof or testimony". If the source is reliable or reputable this can be especially successful with the expert or skeptical prospect.
	I understand how you feel
	Your friend, Hugh Jass, felt the same way
	Here is what he found.
Compensation or Counterbalance	Admit the objection is valid Describe some counterbalancing benefit
Ask "Why?"	Answer with a question Rephrase the objection
Direct Denial	Considered a high risk method of handling buyer resistance. Use it with care. If the buyer resistance is not valid, there may be no other option than to refute it by providing accurate information. Example: If the quality of the product is questioned, meet the statement head on with whatever proof seems appropriate. Be firm in stating your beliefs and be sincere, don't be offensive.
Indirect Denial	Acknowledge that the prospect is at least partially correct. It initially appears as agreement with the customer's objection but moves into denial of the fundamental issue. If done in a natural, conversational way the salesperson will not offend the prospect. Rephrase or have the prospect rephrase Blame yourself Give the facts that answer the objection
Boomerang turn the objection into a benefit	Prospect: "I don't like the size" Seller: "The size is exactly the reason you should buy it!"
Trial offer	A trial offer lets prospect try product without obligation to buy. Popular with customers because they can get fully acquainted with a product without making a major commitment.

Effective Strategies for Coping with Price Objections
The meaning of a price objection	The prospect places insufficient value on the product A competitive product is a better deal The prospect just wants to bargain
YOUR PRICE IS TOO HIGH YOUR PRICE IS TOO HIGH!
Learn to respond to this objection. It is inevitable. Buyers will object just to get a discount. Knowledgeable buyers know that there is often a standard discount for which they qualify Price objections are an opportunity to sell the value of the product or service. The danger is to respond to the wrong price objection. "Tell me more" or "Explain"
Six fundamental price perspectives:
Price versus competition	Discover the differences between the competitor's proposal and your proposal. The price is lower because the product or service is less robust. A time related "special offer."
Price versus approved budget	Was it a budget, or an expectation Was it based on old or unreliable data?
Price versus buyer expectations	Was the prospect told about a less expensive solution provided to a friend? Explore the friend's solution. The buyer can then accept the other solution at a lower price The buyer can then accept the higher price for the original solution.
Price versus a process alternative	Your price is being compared to a process alternative. Buying software may be compared to manual methods. There are often new benefits that are simply impossible with the manual method.
Price versus a percentage of the product price (for continuing services)	Maintenance or support costs can be greater than the original cost. 20 years ago hardware and software was more expensive than support. Today hadware and software costs are low. Labor for support is high. Support may be more comprehensive than in the past. Understand and communicate these changes to the prospect
Price versus "do-it-yourself"	Denies the cost of labor of the participant Denies the cost of extended time to implement. Example: lawn care. Everyone can cut grass cheaper than hiring a service Few enjoy spending time on this chore. "Do it yourself" places less value on your time

VALUE ANALYSIS: Determines the Best Product for the Money.
Comparison of your product's features, advantages, and benefits to those of the product presently in use. Comparison of long range costs and savings. Evaluation of the buyer's present product - does it perform better than is required? Determine if the buyer would benefit more from a higher-priced, better performing product.
Types of Value Analysis
True Value	Compare product costs to true value. Establish the value of the product first so the buyer can intelligently compare the true worth of the product to its true monetary cost.
Reduce to the ridiculous	Unit costs break price down Use the Lowest Common Denominator Know basic quantities
Return on investment	Return-on-investment refers to an additional sum of money expected from an investment over and above the original investment. Emphasize the percentage return that can be earned by purchasing your product.
When Dealing with Price Resistance
DO	Add value with a cluster of satisfactions. Point out the relationship between price and quality. Explain the difference between price and cost. Employ the Presumption of Exclusivity Stress your product's exclusive features Identify extras that only come from you Sell quality, exclusivity and differential features Sell Down All prospects have a buying range Show the best first and then let the prospect reduce price by removing features or lowering quality
DON'T	Apologize for the price. Make price the focal point of your sales presentation. Become demanding, Become defensive Become hostile

Five Question Sequence Method of Overcoming Objections

"There must be some good reason why you're hesitating.
Do you mind if I ask what it is?"

"In addition to that, is there any other reason for not going ahead?"

YES	Ask what it is and	Go To Q2
NO		Go To Q3

"Just supposing, M. Buyer, you could... then you'd want to go ahead?"

YES	Go forward to discuss this
NO	Go To Q4

"Then there must be some other reason.
May I ask what it is?"

Answer	GO TO Q2
No Answer	GO TO Q5

"What would it take to convince you?"

This series of questions keeps the conversation going and gets the real objections out in the open which helps increase your sales.

Some Thoughts on Negotiation
Qualities of a Good Negotiator
Patience Endurance Stamina	Willingness to continue Risktaker Tolerate ambiguity
Negotiating Skills
Allow time for planning Collect all available information Negotiate internally first Be flexible Don’t give concessions too early	Don’t respond too quickly to demands Call "time-outs" when appropriate Put yourself in the customer’s shoes Don’t let egos interfere Always follow through
Buyer's Overt Concerns
Do we really need this product or service? What will the savings be for the company?	Are there alternatives? Do we have sufficient budget?
Buyer's Covert Concerns
Will I be at risk? Will this reflect positively on me?	Will this solidify my position? Will this mean more work for me? Do my potential gains outweigh the risks?
Ten Booby Traps
Sneak attacks Fatal assumptions Misguided missiles Killer impatience Bad intentions	Blind faith Mental blocks Price paralysis Unwise ultimatums Misplaced emotions
Remember	Prepare! Probe! Propose!