Stop Arm Wrestling with your customers

Six tips to developing better relationships.

Why do buyers often introduce ‘irritants’ like arranging for your competitors to be visiting them just before or after you so you pass in reception, or saying they just had a comparative quote 10% lower than yours? Why do they seem suspicious of your motives for cold calling them, or suspicious of your initial offer? Why do they seem intolerant of your need to follow up with them after a sales meeting? Why do they often hold back information, like the details of the comparative quote, or the details of their current supplier?

Does this type of buyer behaviour get them what they want?
The answer is No – not usually. Sure, it might help them win an extra short term discount, or screw the supplier down on terms a little more, but in the long term, it only lessens the chances of achieving the right fit, right terms, right supply model to truly meet their organisations needs. This means missed opportunities for boosting their bottom line.

So, why do they do it?

The first reason I believe so many buyers behave in this way, is that salespeople have “trained them” to do so. Buyers have learned that if they put pressure on sales people they give in. Unfortunately this has just encouraged buyers to expect and demand more.
Remember, goodwill begets greed, not gratitude!

The second reason is that behaviours are catching. If I choose to withhold information from you, chances are, you’ll withhold information from me. If I choose to show you how much power I have, you’ll do the same.

At best we’ll waste lots of time posturing, flexing our muscles and whining about each other. At worst, profitable collaborations between suppliers and clients, that improve both parties businesses, don’t happen.

Traditionally, sales people have been motivated by one thing – their own selfish gain (money, commission, sales leagues) rather than their customers’ success. As a result, buyers have learnt that sellers will start high, will embellish the truth about their products and services and make promises they can’t keep. Sellers HAVE behaved this way, and buyers have been forced to respond accordingly.

Even if you are one of the more enlightened sales people, who are focused on your customers real needs and keen to help them solve their business problems, at the beginning of the relationship, you are perceived as just another sales rep.

So if we know that it is the behaviour of generations of sales people that have taught buyers to act in a certain way, it stands to reason that by changing our actions and behaviours the way buyers respond will also change.

This could mean our customers get better long term deals, our relationships with buyers improve more quickly and we achieve greater levels of success. Sounds like a ‘win-win’ to me.

The trick is to behave in a co-operative way, try to understand what business or personal needs are driving a certain reaction or behaviour, and then work to meet that need – on terms acceptable to you and your organisation.

Here are 6 tips to develop more cooperative and collaborative relationships:

1. Be more emotionally detached.
   When people are emotionally involved, they tend to argue from a more irrational and less commercial perspective. They react personally to things like irritants rather than asking themselves “what does the buyer hope to achieve by acting in this way? Is there any other way I can help them achieve that without it compromising my needs?”
2. Be prepared to disclose information
   If I’m more open with you, you’ll tend to be more open with me. If a buyer seems like they don’t believe you’re offering them the best price, can you prove it by showing them your margin? This thought scares sales people, but if I choose to tell you what my margin is, does it mean I have to give it away to you? Of course not. I might choose to trade some of it for greater volume, or a longer term commitment, but I have yet to meet a buyer who thinks it’s unreasonable for a supplier to make a profit.A word of caution though. When considering whether or not to disclose a piece of information, the acid test is how does it structure the expectations of the other party. If it’s likely to help them make movement towards me, I’ll disclose the information. If not, I’ll be a little more careful about what I say.
3. Try to hold your meetings in a more informal, private setting
   Ever seen a negotiation between two parties seem collaborative and cooperative when it’s held through the press? Ever felt relaxed and comfortable in what you thought was a 1 on 1 meeting then the buyer brings in 6 other people?Meetings held in a public setting are, on the whole, more competitive and adversarial. Try not to go mob-handed to sales presentations. If you find yourself out numbered, try to bring others in with you to even things up. Avoid publicising the details of your deals. And remember, informal does not mean unprofessional, even a meeting over a coffee should be well planned and well structured.
4. Become a more skilled operator
   In most cases, skilled sales people, skilled buyers and skilled negotiators act in a more cooperative way, than those who are less skilled. This is not because training teaches you to be cooperative. Rather skilled operators know that by being cooperative, they get better, more sustainable deals.
5. Focus on building a long term relationship with your buyers
   Ask people what their definition of a “good deal” is in a one-off relationship? They’ll usually say it’s when they know they’ve screwed the other party to the floor. When asked what their definition of a good deal is in a long term relationship, they’ll often say, when they know they’ve taken the other party close to their limit, but know the other party is prepared to do business again with you.
   Treat all seller / buyer interactions as long term. New Zealand is a small marketplace, and although you may think that the buyer you’ve nailed to the wall is one you’ll never have to deal with again. Chances are they’ll appear in another organisation, at another time, with more power and then who’ll get screwed?
6. Reduce the contractual elements
   If a supplier tries to get me to sign a lengthy contract, with high impact penalty clauses for early termination, what will I be thinking about the claims the sale person has made about the true benefits to me of their solution? That they might be a little exaggerated?
   Clearly some contractual obligations are necessary in business relationships, but for example where penalties for early termination are balanced with incentives for longevity, or offset against supply performance indicators, the parties involved are more likely to see the mutual benefit in them.

One highly successful global kiwi brand I came across a couple of months ago, said their ethos around contractual arrangements with their clients was “love without clauses” – that’d make me trust that supplier.

Next time you come across a competitive, adversarial buyer, don’t respond in kind – consider the personal or commercial need driving that behaviour, act in a cooperative way and try to meet that need – on terms acceptable to you.