GUEST: David Bauders, CEO of Strategic Pricing Associates
Sales training has long been viewed as a necessary evil, lacking a major component to success: negotiation training.
We recently interviewed David Bauders, CEO of Strategic Pricing Associates, a company that leverages analytics and training to master profit opportunity. Bauders had his defining career moment when he realized it was important to not only give salespeople analytics to help them price better, but also the training they needed to negotiate more effectively with their customers.
Here’s what we learned from Bauders about negotiation, and how sales reps can move up the value pyramid in an era where more work is being done by machines and AI.
What Sellers Struggle With the Most
Never before have sellers had such incredible product and solutions offerings in the B2B marketplace. Companies invest millions in creating value for their customers, yet their sales reps are often unprepared when it comes time to negotiate.
According to Bauders, a lot of people think of negotiation like riding a bicycle – they think they’ll just be able to wing it. “That’s just not true,” Bauders said.
The main struggle Bauders sees is that sellers focus so much on the needs of the customer, that they forget about their own needs and the needs of their families and shareholders.
“Sales reps are so focused on their own pressures to close deals, to hit quota, to pay their bills, that they ignore the pressures on the other party to buy…Just as sellers have pressures to sell, buyers have pressures to buy,” Bauders said.
Three Steps to Becoming a Great Negotiator
People often think they need to look at certain dispositions and personality types for successful negotiators, but according to Bauders, that’s a big misconception. “Great negotiators are created, not born,” Bauders said.
First, training is key. Great negotiators have to be created, and that requires training. “Just like any other sport, negotiation requires skills, training, practice, a conditioning program and in-game experience,” Bauders said.
Preparation is second. In Bauders’s research, most people just show up for a negotiation – they haven’t done their background discovery work and they fundamentally are unprepared for what happens. “A great negotiator doesn’t just wing it,” Bauders said. “They spend the time upfront to define the negotiation process, they take time to understand the other party, they develop their value proposition and identify and quantify the issues under negotiation.”
Finally, negotiators need tools. Great negotiators have analytical tools to help guide their decision making. They don’t just guess at things. They should also have a concession-making strategy and know what to ask for when making a concession. “A great negotiator is one who’s trained, prepared and has the tools to succeed,” Bauders said.
The Biggest Misconception
People who are new at negotiating often view the negotiation process as a zero-sum game. This is the biggest misconception that new negotiators have, according to Bauders.
“There’s a basic principle of negotiation, that when you find yourself in a win-lose type of environment, you need to redefine the negotiation to be bigger. That is, to grow the deal in a way that will make it no longer a win-lose, but a win-win,” Bauders said.
“It’s a cliche, but also true that people are a company’s biggest asset and when you empower those people by giving them tools and training, you transform the value of the corporation as you transform the value of the individuals.”
What is the Cognitive Era?
Bauders refers to the “Cognitive Era” as a the current landscape where machines and AI are managing the tasks and roles of sales. “What we don’t realize is that behind that convenience, is an AI that is going to radically change the sales profession,” Bauders said. “It’s going to change the roles and the skills that are required for success.”
Studies have shown that technologies like AI will displace almost 40 percent of the activities currently performed by sales reps over the next five years. Tasks like basic product information and classification and product value proposition are already being resolved with AI.
What that means, Bauders says, is a lot fewer sales reps. For those who remain, there will be a real pressing need to upgrade their skills and move up the value pyramid. And that goes back to training. “What you get, is what you invest,” Bauders said.
Is Your Training “Binge-Worthy?”
It’s a question Bauders frequently asks. “What percent of your training content is binge-worthy?”
The answer always comes back: zero.
According to Bauders, the expectations of training departments haven’t kept with the Cognitive Era. If sales reps are spending work hours surfing social, it’s not necessarily because they’re lazy, it’s because they aren’t being given a career-building alternative. Content is king, and companies need to create a learning environment that keeps sales reps engaged. “The same things that get people to binge-watch on Netflix or Amazon…better be in our training content,” Bauders said.
What is Most Effective When Someone is Trying to Sell to You?
We like to ask all of our podcast guests this question. Here’s how Bauders answered:
“I think it comes down to a few things. How are you going to help me to improve the profitability of my company? How are you going to help me improve the capabilities of my company in ways that will serve customers? How will you save me time? Time is the most precious resource. How are you solving the problem different from other people? Because differentiation usually leads to a better answer.Do you have a forward-looking perspective? And then, the last piece is simplicity. People who over-complicate things usually don’t succeed.”
In every episode of the B2B Revenue Executive Experience, we try to pull one nugget of wisdom from our guests that they would impart on a sales professional. Here’s this one:
“First, determine what tools you need to do your job more profitably on a daily basis. Either to do it more successfully or to add more value or more efficiently. Figure out what those tools are that are going to drive you to a more profitable book of business or more profitable daily decision making. The second is determine what skills you need to do your job more profitably. And here’s the hard part – practice them daily.”
If you don’t use iTunes, you can listen to every episode here.