How Account Managers Can Handle Deals Without Calling in the Boss
Sales Directors moan to me a lot about negotiations being escalated to them. “Why can’t my guys just do it themselves?” Then, they grin because they partly know why but don’t want to admit it. Having spent 35 years negotiating and teaching negotiation training, there are 4 reasons that cause negotiation escalation.
Firstly, the buyer knows that, having negotiated with the supplier many times, if the boss gets involved, they will offer more than the Account Manager did. This is where Sales Directors grin because they feel important and powerful, as they can give away more.
Secondly, a stalemate happens when two negotiators start at the third stage, Proposal, of the negotiation with price, butt heads, and then fight.
Thirdly, sometimes escalations just have to happen, like when it is above your pay grade.
Fourthly, when each party has a very different idea of what was agreed.
For each cause of negotiation escalation, there is a solution. Let’s focus on 1, 2, and 4, as 3 is just life.
The solution to the first reason is about the NAM and the Sales Director agreeing a scope of what can be agreed before the Account Manager begins negotiating. The reason they don’t agree on a scope of “you can go down to £8.20 per case” is because the Sales Director doesn’t trust the NAM not to go straight to that figure. The cost of not doing this is that the NAM loses credibility as the buyer realises next time they’ll just go to the organ grinder. Also, the Sales Director ends up doing all the deals. Agreeing the scope upfront is the simplest way to prevent negotiation escalation.
Stalemates happen because both parties skipped stages one and two of the negotiation process for speed. And yet, here they are 4 months later, still negotiating. The first two stages are Preparation (use the Squaredance template) and Exploration. By asking questions, we can find out what the other party wants. Yes, they want the price, but what else do they want that could be used as a variable to negotiate?
When each party walks away from the deal with a different idea of what was agreed, it is because they did two things wrong. They missed stage 4 of the negotiation, Summary, where one party verbalises what they think was agreed, giving the other party an opportunity to disagree. Plus, when they captured the deal during the negotiation, they tried to capture all the notes of what was being said, rather than just an updated version of the deal as it unfolded. Search for “Meeting Notes” on the MBM website for a template that will help.
Reminder: The 5 Stages of a Negotiation (PEPSI) – the best way to prevent negotiation escalation and focus on a win:win outcome.
- Prepare
- Explore
- Propose
- Summary
- Implement
This article was written by Darren A. Smith for The Grocer. View the original article.
