Negotiating through a downturn- by Guest Blogger Bill Levell

29-09-11 Alison Parker 0 comment

There is an increasing amount of discussion about recession returning. All the media are gloomy about the continuing impact of recession on businesses.

This has an effect on businesses and their people, not only in terms of generating negative thoughts but believing them.  These negative thoughts affect the way in which businesses see their prospects of future survival.  It is vital, if you want to succeed in these conditions in any market to ensure that a positive outlook is maintained , essential marketing, sales and negotiation skills are energised and activities increased.  In times of recession it is tempting to cut sales activities which can only lead to further limitation of sales results.

Bill Levell for ISM Training

Bill mentors a delegate during an ISM Training Course

During such times customers place increasing importance on finding suppliers on whom they can rely and who provide them with valuable support.

When the going gets tough it’s not the time to withdraw but rather to become more proactive – increase marketing efforts, strengthen sales activities and sharpen negotiation skills. Even if the business potential is limited, it is essential to be even more active and more focused to ensure of being well placed to capitalise on the opportunities that will exist when recession is finally over.

Customers will be looking for ways to improve their profitability through negotiating better prices and value.  They will be spending more time in analysing the differences between competing offers, however, this will not be limited to price alone.  They will also be making comparisons of:-

  • Performance
  • Cost reductions
  • Delivery
  • Quality
  • Support
  • People and relationships
  • Financial stability

Customers/buyers are not committed to buying at the lowest price – they know that the lowest priced supplier does not have 100% of the market and they recognise that there is always price differentiation.  It is rare that the lowest priced offer secures the business.

What is more important, is for the customer to achieve the lowest cost of ownership of the product or service.  Attempting to negotiate a single variable such as price will almost certainly lead to suppliers having to concede part of their profit to the buyer.

Effective negotiation requires suppliers to thoroughly understand the value proposition of the competition compared to their own.  The implications are that it is essential to assess all of the variables on their values not just price.  Think about the factors that influence the customer’s evaluation e.g.

  • What are the costs and risk involved in changing supplier?
  • What is the long-term impact of building strategic relationships and support?
  • What will be the impact of the products and services on the the customer’s products and organisation?

When negotiating, it is in the interests of both parties to establish measurable, additional value by trading multiple variables simultaneously.  It is much more effective to avoid reacting to price reduction demands and to focus on demonstrating how to help the customer achieve their internal objectives whilst getting valuable concessions from them in return.

Market recession provides great opportunities to increase credibility and customer acceptance through demonstrating a thorough understanding of their value requirements and trading all variables effectively.

The ISM Training Dubai courses “ROI Selling Skills “and “Advanced Negotiation” provide high skill building which will contribute significantly to maintaining profitably and securing competitive advantage during recessionary times.



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