Customer Experience Management in the New Economy

How would you rate your customer experience management? If you have a customer experience that satisfies but doesn’t WOW you’re in BIG trouble.

Customer experience is defined as the sum of all experiences a customer has with a you and your business over the duration of the business relationship. This means every touch impacts that experience positively or negatively. Your customer experience management reflects your ability to deliver an experience that sets you apart in the eyes of your customers serves to increase how much they spend with you and, optimally, inspire loyalty to your brand.

Creating  a superior customer experience requires you to first understand the customer’s point of view. Only by standing in the customer’s shoes can a company appreciate the full impact of the day-to-day customer experience that the company delivers.

In the New Economy products are becoming commoditized, price differentiation is no longer sustainable and customers are demanding more. To compete, companies are focusing on delivering superior customer experiences. A study of over 860 corporate executives revealed that companies that have increased their investment in customer experience management over the past three years report higher customer referral rates and customer satisfaction (Strativity Group, 2009).

Many experts feel that the customer experience has emerged as the single most important aspect in achieving success for companies across all industries.

As evidenced by the number of business casualties over the past few years most companies talk about becoming customer focused, but few actually do it. Doing customer satisfaction surveys is one thing, changing the company’s culture based on what was learned from the surveys in something totally different.

Some companies have learned that being customer focused can give them a competitive advantage. Customers choose Disney World and Zappos because of their experience with them.

Let’s clarify the difference between companies that aim for customer satisfaction and those that seek to WOW their customers:

  • Because most, if not all, of the “bad” companies are out of business customer satisfaction is the minimal requirement to keep your doors open. Customer-focused companies strive to delight their customers.
  •  Most companies ask their customers about their needs. Customer-focused companies understand their customers’ needs so well that they can anticipate them and even surface unrecognized needs.
  •  Most organizations strive to meet their customers’ expectations. Customer-focused companies deliver more than what the customer imagined.
  •  Most organizations try to keep complaints to a minimum. Customer-focused companies encourage feedback from their customers so that they can learn from it.

A great example of creating a customer-focused culture is Zappos. A review of their number-one core value below speaks volumes about how they operate.

Deliver WOW through service, is Zappos’ founding principle. It’s not something written down and forgotten. It’s part of who Zappos is and every employee is immersed in it starting on day one.

Zappos lives their founding principle and it has served them well. How does your customer experience management stack up? Ask yourself this question:

If you didn’t answer with a resounding “YES” then you need to take a hard look at every customer touch and improve your customer experience management or pay the price for not doing so.

To learn how well your business is positioned to succeed in the New Economy take the Growth Positioning Survey now.

Build Customer Satisfaction and Loyalty with Social Motives

customer satisfaction amd loyaltyCustomer satisfaction and loyalty are key ingredients for every business. If you want to create a legion of satisfied and loyal customers you’ll need to learn what I learned on one of my first sales jobs.

 As a college stu­dent, I spent one summer selling encyclope­dias door to door. After a week of training I was sent out into the field where my initial day in the field was a picture in con­trasts. My first pre­sen­tation resulted in a sale, but I was almost physically thrown out on the second. Somewhat perplexed, I sought advice from my father, who spent his career in sales and sales management.  “Dad,” I said, “I can’t figure it out. I made the same presentation to both customers and got entirely different results.” My father asked, “Was every­thing the same?” “Of course it was,” I an­swered. “I’ve been practicing my presentation for a week.” My father asked, “Was everything on both calls exactly the same?” I thought for a moment. “Ev­erything was the same,” I said, “except the custom­er.” My father smiled and then congratu­lat­ed me on discovering one of the most important keys to sales success: People are different. If you want to sell them, you must do it the way they want to buy, not how you like to sell. Mastering this skill will go a long way towards helping you build customer satisfaction and loyalty.

Most salespeople intuitively treat each custom­er differently; however, they usually relate better to some customers than others. When you experience a good relationship with a customer from the start, you are most likely selling in your comfort zone; that is, your natural style of selling “fits” the approach that the customer appreciates when buying. These customers are likely to be both satisfied and loyal because of how you sell them.

On the other hand, when it’s difficult to establish rapport or make progress with a cus­tom­er, you are probably selling outside of your comfort zone. The customer wants to buy in a way that is in conflict with your natural style.  In these situations, you have two choices: adapt your style or find another customer who likes the way you sell. Unfortunately, this approach will not help you build customer satisfaction and loyalty. Therefore , you probably only have one choice, because if you don’t adapt, you’ll have to find another customer anyway.

One way to improve your ability to adapt is to recognize and respond to your customer’s motiva­tional needs. Motivational needs are internal desires that cause people to respond in a particular way.  Although we can’t look inside of people and see their needs, we can observe their behavior.  People do things for a purpose. If we recognize their behavioral patterns and trends, we can anticipate what it takes to meet their needs. When people’s needs are met they reward you with customer satisfaction and loyalty.

 How people respond in certain situations gives clues to their motivational needs. The more frequent and consistent a behavior is the stronger the motivational need. For example, if you ask a customer what type of food she would like for lunch Chinese, Italian, or French and she always prefers Italian, you can reasonably be sure she has a strong desire (e.g., need) for Italian food. Fur­thermore, taking her to an Italian restaurant will do more to enhance customer satisfaction and loyalty than taking her to your favorite Chinese restau­rant.

A simple, practical, and reliable ap­proach for recognizing and understanding motivational needs is called Social Motives. The concept of Social Motives was developed by David McClelland[i], a professor of psychology at Harvard University. In his research, McCle­lland found that we learn these needs from our experi­ences growing up, from how others react to our behavior, and from the successes, rewards, frustra­tions, and anxieties of our current experi­ences. The Social Motives consist of three basic motives:

  • Achievement, or the need to excel
  • Affiliation, or the need to belong or relate to others
  • Power, or the need to influence and control others

 Each of these three motivational patterns exists to some varying degree in each of us, according to McClelland’s research. We are, however, primari­ly motivated by one pattern. When we interact with others, our primary pattern affects the way in which relationships develop, sometimes producing fulfillment, some­times significant stress. The inter­action between our pattern and that of others makes some situa­tions stimulating, others frustrat­ing or boring, thereby affecting our personal effectiveness, often in dramatic ways.

 When you understand the dynamics of each Social Motive, then analyze your own motiva­tion and that of your prospects and cus­tomers, you can improve your sales performance in significant ways. This understanding includes fully recognizing what Social Motives are not.

They are not a system of stereotyping or pi­geonholing people.

  • They are not a replacement for others selling skills and strategies.
  • They are not a method of manipulating people.

Social Motives should be used to help you under­stand people, not judge them. When used effective­ly, Social Motives allow you to adapt your selling style so that customers view what you say in the best light possible. This increases customer satisfaction and loyalty because your approach to selling will match how your customers like to buy.


 [i]. The Achieving Society: Van Nastrand, 1961

How to Retain Customers on a Regular Basis

how to retain customers How to retain customers on a regular basis is an important step for increasing sales, profits and customer loyalty. Here are three reasons why.

  • Most (68%) customers stop doing business with a company because of indifference.
  • Existing customers are more profitable long-term than new customers.
  • It costs 5-6 times more to gain new customer than it does to keep an existing customer satisfied.

That’s why one of the cardinal sins of selling in the New Economy is taking your customers for granted. Failing to communicate or stay in regular contact leaves the door open for prob­lems to arise and temptations (the competition)to enter the picture. If the lines of communication aren’t open, the cus­tom­er may not remember you or won’t think to notify you if a problem occurs or a reorder is desired.

As a salesperson and as a company it’s important to have programs in place on how to retain customers that is effective and efficient. This will maximize selling efforts and deliver the best bottom line results.

In the New economy it’s not enough to just stay in touch. Staying in touch is important but it’s only half the battle. Once contact is made, you must use the opportunity to the maximum advantage. This means that when you make customer  retention calls they must be:

Unique. Each call should have its own unique reason for existence (follow-up on a new product, information on company inno­vations or changes and new incen­tives).  Provide the customer with new information, ask additional questions, tackle varied topics.  Your customer does not want to rehash old information or waste time.

Memorable. Make each call count by making a lasting impression on the custom­er.  Customer retention calls are a personal­ly deliv­ered commercial for your product or service.  Offer your customers “food for thought”, make them laugh or give them something to remember the call. If you don’t do something to stand out in the “sea of sameness” your message will forgotten soon after you leave the call.

Personalize. Since most sales are emotional decisions supported by logic you must use theses call to connect with your customers on an emotional level. Helping your customers emotionally identify with you. your product and your company is an essential step in building customer loyalty.

Many salespeople view customer retention calls as perfunctory at best and occasionally a waste of time. Miscalculating the importance these calls usually leads to the deterioration of a relationship and ultimately lost sales.

How to retain customers on a regular basis must become a priority if you want to protect your most important asset, your customers. Remember the saying, “If you don’t take care of your customers someone else will!” Put a customer retention plan in place today.

To learn how your customer retention plans stacks up take the Growth Positioning Survey now.

How to Retain Customers When You Discover a Problem

How to retain customers when you discover a problem with your product or service is important because it sets the tone for the customer relationship.Even the best products and services occasion­ally have prob­lems. When they do, you should look upon the situation as an opportu­nity to earn customer confidence. Why? For two good rea­sons:how to retain customers

  • Some customers never know how good a product or service is until they experience a problem.
  • Solving that problem can strengthen the relationship by physically and emotionally demonstrating your concern, integrity and commitment.

If you discover a problem, you have two op­tions:

1.  Hope the customer doesn’t discover it.

2.  Bring the problem and a solution to the customer’s attention.

Taking the first option is like hiding your new golf clubs in the basement or standing in front of the big dent in the car: eventually, someone will find out. Eventually, your customer will discover the problem. The cover-up may only worsen matters because customers will not only question the quality of your product but your integrity as well. The second approach is not without its risks, but the potential reward of a satisfied customer is generally worth the draw­backs. Learning how to retain customers when this situation arises is a “moment of truth” that ultimately will shape the customer experience you deliver.

The inherent risks of bringing a problem to the customer’s attention can be eliminated or mini­mized by these factors:

  • Your presentation manner. Are you able to connect with the customer on an emotional level?
  • Quality of the solution. Does your solution address the customer does stated and implied concerns?
  • Effectiveness of the implementation. Do you deliver what you promise?
  • Follow-through. Do you confirm that the customer’s concerns were met?

In a technology-driven  business environment it’s easy to use email, voice mail etc to deliver your message. Don’t fall into that trap. Retaining customers is your goal so it’s important to address product problems with a personal touch. This means connecting personally with the customer whenever and wherever possible.To effectively handle this type of moment of truth take the follow­ing steps:

  • Explain the problem. Avoid trying to fix blame. Accept personal responsibility.
  • Acknowledge and listen to the customer’s concerns. Listening to and observing the custom­er’s “words and music” will help you gauge how to present your solution.
  • Address the problem with a course of action.  Your solution should address the cause of the problem as well as your cust­omer’s concerns.
  • Maintain the customer’s confidence in the product or service. This is usually accom­plished after you have imple­ment­ed the solution to the customer’s satisfaction. It requires conscientious fol­low-up on your part.

Problems will occur with your products and services. How you retain customers when they do should be an integral part of how you conduct business. Be pro-active and keep the customer’s needs and emotions in mind when you respond. Your actions will help define the quality of the customer experience as well as the longevity of the customer relationship.

Want to learn how your customer relationship strategies stack up? Take the Grow Positioning Survey now.


How to Retain Customers in the New Economy

Learning how to retain customers is essential for surviving in the New Economy. Without customers you have no bushow to retain customersiness so caring for them and nurturing relationships with them seems like an obvious strategy. Think again. Poor customer service is the number one reason customers stop doing business with their current supplier/provider. In fact according to a Harris Interactive study 86% of consumers stop doing business with a company due to poor customer service.

Companies spend huge amount of their budget attracting customers to their business only to lose them due to the customer experience they deliver. Trying to grow your business without a solid customer service program in place is like trying to fill a bucket with water that has gaping holes in it. Unless you fill the holes you’ll never fill the bucket.

What holes should you fill first? It depends on your business but to a Right Now study the top three customer service problems were:

  • 73% Rude staff
  • 55% Issues weren’t resolve in a timely manner
  • 51% untrained staff

Also according to the US Small Business Administration 68% of customers stops doing business with a company due to indifference. This means if you want to drive your customers away in droves you should ignore them,treat them rudely, serve them with uninformed staff and make them wait for issues to be resolved.  This is an obvious recipe for disaster.

Most businesses know that it costs 5 to 6 times as much to get a new customer as it does to keep an existing one and that existing customers are more profitable than new customers. So why don’t more companies do a better job learning how to retain customers? Lack of focus, training and follow up are the likely culprits. Many businesses seem to be saying, “I don’t have time to take care of my existing customers because I too busy chasing new ones!” If this is you or your business, STOP IT!!!

If you want to survive in the challenging times we live in you must fill the four biggest holes in your customer retention bucket. Put these simple, proven and powerful strategies in place starting today.

1. Pay attention to your customer. Don’t ignore them or take them for granted. Use whatever means available to you to cultivate a relationship with each and every customer.

2. Don’t hire rude employees and fire the ones who are. Companies like Zappos and Southwest Airlines take great care to hire people who are wired to give great service. If they are rude to anyone during the interviewing process they are rejected.

3. Train your people to effectively address your customers’ issues. Investing in the training of your front line staff is like making direct deposits in your customer relationships.

4. Resolve issues quickly, effectively and personally. Everybody makes a mistake. Admit it, resolve it and move on. 92% of customers who leave due to poor service would come back if they get and apology, receive a discount or get an invitation to observe improvement in customer service.

Implementing effective strategies in these four areas will give you a fighting chance to survive in a competitive marketplace.

If you want to thrive in the New Economy then you’ll need to up your customer service game and learn how to retain customers at whole new level. According to Peppers and Rogers Group 81% of the companies who excel in delivering customer experience are outperforming their competition. Customer  service excellence is a formidable competitive advantage. How does your company’s customer experience delivery stack up with your competitors?

To learn how well your company’s customer service initiative are contributing to your success take the Growth Positioning Survey.

How to Retain Customers When They Complain

how to retain customersEvery successful business must learn how to retain customers when they’re unhappy because your product or service failed their expectations. In business customers complain every day. Whenever an airline flight is canceled, a package lost, a meal served cold, a product delivered without all its parts, or a deadline missed, customers are apt to complain. When problems like these occur, the customer is rarely angered by the mistake itself. In most cases, it is the way the problem is handled that makes or breaks the customer relationships. There are two basic approaches for handling complaints: the compa­ny-focused approach and the customer-focused approach.

Company-Focused. This approach has employees justify the company’s position and defend why the mistake happened.  It usually involves the following:

  • Proving you are right and the customer is wrong
  • Showing it is the customer’s fault, not yours
  • Avoiding personal responsibility
  • Telling the customer you can’t or won’t do anything

Taking this approach makes customers feel they have to “jump through hoops” to get rectified what should not have happened in the first place.

Customer-Focused. This approach attempts to make complaints “hassle-free.”  This means providing quick, effective, hassle-free recovery to the customer; you take the heat, not the customer. It also means that if you are ever going to recover, you must get the full benefit of recov­ery. Use recovery as a positive strategy.  Ensure that customer issues get the type of responsive­ness that will turn unpleasant expe­ri­ences into positive ones. Keep in mind that 92% of customers who leave because of poor service would return if they receive an apology, a discount or proof that service has improved.

How to retain customers when they complain is an essential “Moment of Truth”  in the customer relationship. Handle it poorly and you not only lose a customer but the potential customers who are told about the poor service experience. Handle the complaint well and you can not only salvage the relationship but solidify as well.  To handle it well and maintain the relationship make sure that you follow these steps:

  • Say you are sorry.
  • Listen emphatically to the customer’s con­cerns.
  • Hear him or her out. Let the cus­tom­er vent emotions. Circumventing or minimiz­ing the importance of emotion only invites com­plications. Letting off steam may be the beginning of a rational discus­sion.
  • Clarify the problem. Use your questioning skills to properly define the nature and cause of the problem.
  • Take total responsibility for “making it right.”
  • Solve the problem without blaming some­one else. Address the problem with an appropri­ate course of action. Offer a solu­tion based on the nature of the problem and your comp­any’s ability to rectify it. Be careful not to over-promise what you can do to correct the situation. If you drop the ball again, you may not get another chance to carry it.
  • Regain customer confidence in the product or service. This can only be done with ac­tions not empty words and promises. When the solution is implemented, make sure that the customer is satisfied and sees the value of your company’s efforts.

Customers have many options in the New Economy. Drop the ball on them and most will just leave without saying a word. When customers do complain its an opportunity to learn new ways of how to retain customers. View complaints as specific suggestions of how to expand on how you satisfy or exceed your customers expectations.

Complaints will happen. How you handle each one will be your signature for managing the customer experience.

To discover ways in which you can improve your customers’ experience take the Growth Positioning Survey.


Building Customer Partnerships in the New Economy

Building Customer PartnershipsBuilding customer partnerships is essential for success today. Why? The New Economy demands a new approach to selling and so the world of selling has changed. Rela­tively simple times have given way to a selling environment influenced by eco­nomic, political, technological, and demo­graphic factors. The fact is, if you don’t think beyond your own product or services, and don’t adapt your selling approach to the changing times, you will be blind-sided by the competitors who do.

       The traditional selling approach focuses on a single event persuading the sales prospect to say yes to an offer of a product or service.  In each case, the selling process is a series of linear steps: pre-ap­proa­ch, ap­proa­ch, needs analy­sis, presen­tation, nego­ti­a­tions, close, and ser­vice. There are varia­tions to this tradi­tional ap­proach (and hun­dreds of sales tech­niques), but the bottom line is always the same: If you are suc­cessful in the process, you will reach the objec­tive a closed sale.

       Suppose we turn that process around to focus on customers. Suppose we place the value of winning customers above that of making a single sale. Suppose the goal is not to sell a product or service but to win customers. What have we accom­plis­hed?

       First, we have changed our perspective from short-term to long-term. A “repeat” customer is significantly more profitable in the long run than a “first-time, one-time” buyer.  Second, a steady customer produces better cash flow.  Third, the cost of re­taining a current customer is less than that of pros­pecting for a new one.  Fourth, an existing customer repre­sents a better potential for new or add-on servic­es with less asso­ciated sales ex­pense.  And final­ly, a satisfied customer is our best form of ad­vertis­ing, repre­senting an excel­lent source of refer­rals.

       In reality, successful sales­people usually hit their tar­gets. If your goal is per­suading the customers to sign a contract with your compa­ny, your past perfor­mance tells us you will not fall short. But simply making a sale falls short of the real goal of win­ning customers. And there­in lies the theory behind build­ing customer partner­ships.

       Building customer partnerships is built on a foundation of ten principles. Understanding and adapting these principles can help you become a more successful salesperson.

Principle 1: People buy for their reasons, not yours.

       You know exactly why you want to sell the customers on your products or services.  The more customers you sell the better off you and the company will be at the end of the year. Customers also have equally strong reason for buying. Perhaps they want to save money for their com­panies, as a way of increasing their worth as employees.  Or they’ve had a bad experience with your competitor and are looking for a supplier who will eliminate headaches. The important thing to remember is that customers always have their own unique reasons.

       Finding out each customers’ buying motive is a key element of building customer partner­ships. Therefore, it is impor­tant to listen to what the customers says and how he or she says it. When you’ve uncov­ered the hidden motive, you can start aligning the features and bene­fits of your product or service with the per­sonal needs of the customers. Once customers see that you can satisfy their needs, they will do whatever is necessary to do busi­ness with you.

Principle 2: People buy solutions, not products or services.

       A consumer does not buy a car because it has four wheels and two doors; a consumer buys a car because it provides transportation from point A to point B in a style the consum­er finds to his or her liking. Likewise, customers are interested in what your services can do to help solve their problems or make life easier for them. For example, buyers care less about details of how you make your product than how that product’s superior features will benefit their company.

       To be a top performing salesperson, you must transform the features and advantages of your products and services into terms customers can understand, appreciate, and apply to their own situation. When you do this, you’re building a partnership with the customers, not simply selling the customers a product or service.

Principle 3: The act of buying is a series of decisions.

       Just as you size up customers during the initial meeting, those customers are making a series of decisions about you, the company you repre­sent, and what you have to offer. Customers are also analyzing what they are currently using to service personal needs, its cost and dozens of other factors known only to customers.

       If you realize the act of buying is not a single deci­sion but a series of deci­sions, you can concentrate your efforts on learning which decision is currently uppermost in the customer’s mind. When you do that, you will be able to provide the infor­mation that will result in a favorable verdict and move the process along smoothly.

Principle 4: Decision-making follows a logical sequence.

       Each step in the decision-making process is made in a logical order. But the emotions and speed behind each decision will vary with each customer. For example, a customer may require several sales calls to accept you as a salesperson, but then move quickly to a final buying decision. Another customer may reverse the process. Consequently, you must be aware of each customer’s unique deci­sion-making process. By listen­ing, observing, and questioning, you can learn where the customer is in the decision-making process. How you interact with a customer at one stage determines when or if you earn the right to advance with the customers to the next stage.

Principle 5: Customers decide by differen­tiating.

       Contrary to popular belief, there is no such thing as a commodity product or ser­vice. Not in the minds of customers. They will always find ways to determine differences between your services and your competitors’.  Price is one differentiator. But so are conve­nience, quality, timeliness, and dozens of other factors. A more appealing, well-thought-out sales approach may also be considered as a differentiator in the decision-making process.

       Assuming you don’t want to sell on price differentiation, it is critical for you to help the customers see tangible (and intangible) differ­ences between your services and those of Company X. Once you have created differ­ences in the customers’ mind, the buying process will move forward. Failing to do so may cause the customers to develop their own differentiation criteria, which may or may not be favorable to you.

Principle 6: If you don’t differentiate, your competitors will.

       This is really a corollary of Principle 5.  Call it the art of positioning. You want to estab­lish a positive image of yourself, your compa­ny, and your products or services in the customer’s mind before a competitor has a chance to differentiate his services. Much like a military campaign, it is easier to defend a position than attack one. In many re­spects, the sales “battlefield” is the customer’s mind.  Salespeople who establish­ their position first, by differentiating best, will win the battle and, ultimately, the customer’s trust and business.

Principle 7: The cornerstone of selling is trust.

       Remember, our goal is to win customers not just to make a fast sale. You may manip­ulate customers into buying once, but you won’t establish a customer partnership until there is trust. Since most salespeople go for the close, customers have developed elaborate defense mechanisms to put sales­people off guard and avoid a decision.

       You could try to break down the customer’s defenses, but what you will end up with is an adversarial relationship. Rather than attacking, you need to create an atmosphere of trust. If customers trust you, they’ll tell you their needs and expectations, what they really want. If you can get them to talk about what they want, they’ll listen when a solution is presented. If they listen to what you’re proposing, they’ll believe it. If they believe, they’ll continue to buy. Which is how building customer partnerships leads to long term success?

Principle 8: Trust must be earned and then re-earned.

       Just as in a friendship, trust is something you must earn time after time, day after day, contract after contract. One slip: on your part a broken promise, a false claim, a breach of trust and you risk losing more than a sale. You may have lost a hard-earned customer.

       The objective is to establish the fact that you are committed to the customers, that you will always act in the customer’s best inter­ests. This is done not through words, but through deeds. It becomes an attitude on your part. But it also must be a quality that comes through loud and clear to the customers on every sales call, includ­ing the first.

Principle 9: Know where customers stand at all times.

       Establishing a partnership is a dynamic process. At any time, the customers may be moving from one decision-making level to another: from skepticism to trust, from nega­tive to positive, from reticent to ready. The successful salesperson is constantly aware of where customers are in the buying process.

       As you prepare for your sales call, think of the process as a loop. First, gather your facts and plan your sales strategy. Then, when face to face with the customers, react to what the customers says, present information, discover information, and manage the sale as you guide the customers through the decision-making process. Finally, after the call, evalu­ate where you are, what was accomplished, and your next steps with the customers.

       This allows you to plan and control the next phase in the buying process by address­ing issues important to the customers and by building your trust level.

Principle 10: No two customers are alike.

       That’s not exactly an earth-shattering revela­tion, but it’s surprising how many sure­fire sales programs fail to recognize that customers (and salespeople) are individuals with different needs, unique styles, and distinctive ideas about how they’d like to sell and be sold.


       Building customers partnerships in the New Economy is not based on patterned responses to projected sales situa­tions. Instead, it’s based on an approach that takes best advantage of ten sound selling princi­ples, basic human beh­avioral tendencies, and common sense. After learning the approach, you’ll discover, with growing confidence, that no matter what type of person you’re dealing with, or what the competitive challenge, you will be in a better position to establish a long-term partner­ship with the customers.


How to Avoid the Four Biggest Sales Negotiating Traps

sales negotiatingImproving your sales negotiating effectiveness may be the answer to increasing sales, profits and your income. Al­though there are no “silver bullets” for negotiation suc­cess, there are predictable mistakes that sabotage negotiation success. Knowing these mistakes in ad­vance and taking the action that top performing salespeople do to avoid them, can go a long way towards improving your sales negotiating effectiveness.

This article identifies the four most common sales negotiating mistakes and out­lines several approaches for mini­mizing or eliminating their impact on the negotiation outcome.

1. Failure to plan.

People don’t plan to fail in a negoti­a­tion, but they often fail to plan. Many sales­people walk into a negotiation virtually blindfolded. They have only a vague idea of what they want and an even vaguer idea of what the other party wants or needs.

S­o­lu­ti­on: Know where you’re going and how you’re going to get there before you start. Before each nego­ti­ation:

  • Schedule planning time.
  • Identify for yourself, the buyer (or buyers), and the competition:
  • Needs (must have)
  • Wants (like to have)
  • Currencies (things of value to the other party in the negotiation)
  • Your best case proposal
  • Options (listing alternative solu­tions that would be acceptable to both sides and what to do if no agree­ment is reached)
  • Anticipate resistance, objections, and tactics.
  • Identify internal obstacles and solu­tions.
  • Visualize success.

2. Setting low aspiration levels.

Most salespeople take one of two ap­proaches when setting their initial aspi­rations for a negotiation. Some sales­people lower their expectations in antic­ipation of buyer resistance. While oth­ers have unrealistically high expecta­tions that aren’t defensible which often leads to large conces­sions or unnec­es­sary lost sales.

Solution: You get what you expect, so expect what you deserve. Higher aspi­ration levels are generally a result of confidence and a great confidence build­er is preparation. Good prepara­tion can help salespeople discover a higher price that is realistic and defensible.

A good technique for increasing your aspiration level is to add five to ten per­cent to every proposal and then defend your price to someone (e.g., manager, another salesperson). If you can defend your price, you in­crease the chan­ces of getting some, if not all, of the five to ten percent in­crease. If you can’t de­fend your price, you’ll need to do some more home­work.

Stating your highest but defensible price establishes the upper limits of your price, but gives you the flexibility to adjust it based on the buy­er’s response and needs. Remember, it’s easier to negotiate down than to negotiate up.

3. Negotiating price before the value of the prod­uct is established.

Discussing price before you’ve estab­lished the value of your product great­ly reduces the options available to create a win/win agreement. Talking price up-front usually results in a “single curren­cy negotiation.” These negotiations are generally not in the salesperson best interest because the only thing to nego­tiate is price. The options facing sales­people in this situation is either meet the price de­mand or lose the sale.

Solution: Sell the value of your prod­uct before you negotiate price. Be­fore you discuss price, review and gain agree­ment on the buyer’s needs and buying criteria. Simply say, “Be­fore I discuss the price, I’d like to review my under­standing of your needs. To begin with, you’re interest­ed in X,Y and Z?” Be sure to get the buyer’s agreement on his/her needs before you move on to the presenta­tion and price. This can even be ac­com­plished if you don’t get an oppor­tunity to discuss your proposal with the buyer by starting your proposal with a review of the clients needs, and then presenting your solutions to the needs.

4. Not being ready to walk-away.

If you feel you “need to make a deal at all costs,” that’s usually what you’ll do. Not being ready to walk away from a win/lose negotiation, is like surrender­ing uncondition­ally to the enemy. Your plight is left to the com­passion of the buyer and most of the time, sets a bad precedent for future negotia­tion.

Solution Don’t negotiate if you’re not ready to walk away. Before you negotiate, establish your walk-away price. This is the price or set of terms and conditions that absolutely must be met in order for your needs to be met. If your needs aren’t met, it’s not a win­/win negotiation.To give yourself co­nfi­dence and prevent your­self from being painted in a no-win corner, have a viable option to a ne­gotiated agreement. In your own mind, decide what’s your best alter­native to making this deal. If you have a good alternative, (e.g., selling to another account, making up the lost revenue next week) it’s easier to walk away from a bad deal.

If you’ve tried a number of options and still feel the pro­posed solution will not work for you, simply agree to disagree. One possible ending is to say, “thanks, but I can’t make this work for us.” Then give your rationale and keep the door open for future negotiations, as well as last-minute concessions by the other party. Re­member, when you walk, the pressure to make the deal falls back on the buyer. This pressure often leads to the buyer altering their demands and creating opportu­nities for a win/win solu­tion.

Negotiating successfully takes time, preparation and discipline. Avoiding the four mistakes and properly implementing the solutions outlined will help you win more sales while increasing profits and your income.

For more information on negotiation skills and selling go to:

Creative Risk Taking Strategies for Sales Success

creative risk taking strategies Because today’s marketplace offers an abundance of the unknown, it’s important to develop creative risk taking strategies. This means you must become a creative risk taker and learn to “play to win” not “play not to lose”.

Although Creative Risk Takers play to win, they know that success is never permanent and failure never fatal.  They seldom see failure as something from which we cannot recover.  They are self-directed enough to tolerate rejection and take responsibility for their actions.  Creative Risk Takers also tend to control the odds with their creative risk taking strategies.  They set limits on their losses, not risking more than they can afford to lose.  Creative Risk Takers are also realistic in appraising people and circumstances, including themselves.

The first step in becoming a more creative risk taker is to expand your comfort zone.  Draw on your
existing skills, interests and experience to put yourself in new situations where your chance of success are good and changes of failure are modest.

The following eight strategies are designed to assist you in moving towards a greater level of creative risk taking regardless of your normal risk taking style.

  1. Diagnose the unwritten rules of the organization. Understand how things really get done.
  2. Determine the tolerable limits of your own personal risk taking. What’s your normal comfort level?
  3. Build a power base before acting.  Become a critical technical resource or become more connected to the power
    network in the organization. 
  4. Know when to admit defeat and cut losses. Beware of a preference for avoiding risk.
  5. Take short-term losses for long-term gains. Tell the customer the truth or lose face if necessary to preserve the relationship.
  6. Observe the obvious.  Confronting assumptions often prevents disasters even though it may cause some immediate pain.
  7. Break rules to get the job done.  Breaking the spirit of an organization’s policy should be approached very carefully.
  8. Never risk more than you or your company can afford to lose.

What else do you need to know to develop creative risk taking strategies? Let me know what you think. Leave a comment below.

Before Cutting Your Price Try These Negotiation Tactics

negotiation tactics

Here are some key negotiation tactics that you should use before you cut your price. In today’s New Economy businesses and consumers are looking for the best deal. They are bombarded in the media with sales, specials, promotions and coupons. This usually means you will be facing a buyer who has done homework and will ask you to cut your price. Instead of going with the marketplace flow resist the urge and build value before discussing price.

Here are some key negotiation tactics that you should use before you cut your price. Using these tactics can help you negotiate more effectively and sell at a higher price.


  • When you meet sales resistance, try selling benefits before you
  • Plan your negotiation.
  • Know what you want and what you need.
  • Set your aim high.
  • Know the other party.
  • Establish a positive climate for negotiating.
  • Identify all the issues before you begin to bargain.
  • Maximize the value of each concession you give.
  • Break complex negotiations down into pieces, and solve each piece one
    at a time.
  • When you lack power, structure the negotiation around facts, figures
    and hard numbers.


  • Be the first to concede on a major issue.
  • Make unilateral concessions.
  • Get caught in a price only negotiation.
  • Bow to pressure.
  • Be afraid to say “no”.
  • Offer to split the difference.
  • Rush the process – how you negotiate is as important as what you
  • Be put off by the word “no”.
  • Negotiate with anyone who has less authority to make concessions than
    you do.
  • Negotiate at times when you desperately depend on a favorable outcome.

Use these negotiation tactics to increase sales, profits and customer loyalty. Doing so takes planning, discipline and courage.  It also take a mindset that projects confidence in your product, your offer and yourself.  Remember once you start on the price cut road it is nearly impossible to move to the higher ground.