Salespeople need to capture and maintain value throughout the entire buying cycle—not just at the end
If weeks-long, city-wide debauchery is your thing, you might be among the thousands of revelers flocking to New Orleans this time of year for the Mardi Gras festivities.
As veterans of the scene are aware, one of the enduring rituals of the season is the “Mardi Gras throw,” where float crews shower parade-goers with an array of symbolic trinkets, most famously the multicolored bead strings.
For spectators, there are several tried-and-true methods for earning your beads. Not all of them have the blessing of law enforcement. Historically, the most respectable way to get a good haul is to repeatedly yell, “Throw me something, mister!” Sure, it might seem basic at face value, but a little gumption should ensure that you leave The Big Easy with an ample supply of bead strings, fake jewelry and plastic cups—along with, hopefully, your dignity intact.
It’s in this spirit of earning your beads the right way for Mardi Gras that I’d like to discuss earning your deals the right way as sales professionals. Essentially, what that comes down to is the ability of your salespeople to maximize the size and profitability of your deals.
For that to happen, salespeople need to expand their focus beyond just the end of the buying cycle, and forget the mentality that negotiations happen only in the final stages of a deal. To effectively capture and maintain the value of your deals, salespeople should approach customer conversations prepared to negotiate throughout the buying process, not just at the end.
Here are some tips to help you do just that:
- Embrace the tension. When pricing pressure and tension mount, the typical response is to flee that friction. It’s an intuitive human reaction that manifests itself in the sales world through discounting or giving things away for free for the sake of moving the deal along. In this case, the counterintuitive response of embracing the tension is the better alternative. Research shows that a positive attitude toward conversational tension is conducive to larger deal sizes and more productive negotiations.
- Negotiate throughout the buying cycle. To embrace tension purposefully in negotiations, salespeople first have to recognize that they are, in fact, negotiating—even if the deal hasn’t yet reached the purchasing stage. In other words, salespeople have to realize that every time they give something away to move the deal forward—trial runs, demos, meetings with decision makers—they’re essentially squandering an opportunity to secure more value. This pattern of giveaways and discounting results in “value leaks,” which hurt the perceived value of your deal and end up eroding your margins.
- Execute pivotal agreements. Instead of a strategy of giveaways and unnecessary discounting, try to identify and execute what I call “pivotal agreements.” For these agreements, focus on securing key milestones throughout the buying cycle, and using them as leverage for exchanging value rather than giving it away. These agreements are designed to create value that you can then preserve. If executed properly, these agreements can be the difference between average deals and highly profitable ones.
- Identify unconsidered needs. You can also use pivotal agreements to segue into asking provocative questions, which can steer your conversations toward a customer’s “unconsidered needs.” That, in turn, helps you avoid the commodity conversation, differentiate yourself in a more compelling way, and expand your deal size.
In recent research, my company found that 79 percent of sales reps say their sales process and CRM systems are “check-the-box” activities that don’t help them close larger, more profitable deals. Encouraging salespeople to adopt a negotiating mentality throughout the buying cycle will help them actually create and capture value as the deal progresses. It will also help them avoid the value leaks that sap your margins.