Survey Also Finds Almost Half of Companies Do Not Have a Formal Negotiation Skills Training Program to Give Sales Reps the Content and Skills Needed to Close More Profitable Deals
PLEASANTON, Calif., Dec. 21, 2015 /PRNewswire/ — Corporate Visions, Inc., the leading marketing and sales messaging, content and skills training company, today announced results from a new survey polling more than 300 B2B marketers and salespeople about price negotiations. The data revealed the number one factor impacting margins is the inability of salespeople to articulate value. The second biggest problem respondents ranked was salespeople negotiating against themselves by not believing in their company’s price. Interestingly, despite these struggles and increasing pricing pressures, nearly half (45 percent) of companies polled admitted to not having a formal negotiation skills program to address this critical problem area.
“The newsflash here is that margin erosion isn’t just coming from customers putting pressure on price concessions,” said Tim Riesterer, chief strategy and marketing officer for Corporate Visions. “The survey indicates the primary problem is actually salespeople’s inability to create a perception of value and a lack of confidence to claim that value. It’s clear there’s also still a need for companies to provide formal negotiation skills training that’s not focused on the buyer’s tactics but rather, on the salesperson’s skills at capturing value.”
Additional noteworthy results from the survey include:
- Of those companies that do formal negotiations training, 48 percent of respondents said their company focuses on late-stage dealings to avoid excessive discounting and save profit margins during the purchasing and pricing step near the end of the buying cycle. The other 52 percent said they are focused on identifying and plugging potential value or margin leaks that take place throughout the entire complex, multi-buyer sales cycle.
- After the top two challenges: inability to articulate value (28 percent) and negotiating against themselves (21 percent) of respondents ranked the following additional negotiations problem areas:
- Twenty percent of respondents believe giving away things of value without asking for anything of value in return is the biggest sales negotiation problem.
- Fourteen percent said their reps are too quickly discounting to their lowest level of authority without regard for the psychology of concessions or a consistent company policy.
- Nine percent believed the problem is waiting for the client to share budget and price instead of anchoring clients with a higher number.
“In today’s negotiations, buyers are in the high-power position because they have all the alternatives. Salespeople are in a low-power position because their alternatives are no deal or no margin, and those aren’t good alternatives,” said Riesterer. “As a result, companies need to make sure they help salespeople take more creative, counter-intuitive approaches to negotiations where they can actually use the low-power position to their advantage, as opposed to many skills training courses that recommend ways to regain power or retake control. Research shows efforts to raise power equality actually produce worse outcomes.”