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Winning Edge Article Nov 2011 - It's good to talk

Simon Buzza
Simon Buzza

The document discusses how digital technologies have changed communication and business interactions, with email and online negotiations becoming more common. However, the author argues that purely digital relationships are not enough, as complex negotiations and high-value relationships require an in-person, personal touch to build rapport and trust. The author advises segmenting customers and tailoring negotiation strategies according to relationship value, as well as embracing technology as a tool while still prioritizing conventional human interactions for key relationships.

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26 | Winning Edge he influence of digitisation and the Internet has changed the way we communicate, learn and conduct commercial business. Easy access to the Internet, as with the introduction of the mail service or the invention of the telephone, has changed the nature of our connection to others in our social world. Mail made possible connections among people without physical proximity; the telephone facilitated communication between distant people, making rapid connections possible across long distances; and e-mail enables the rapid dissemination of information to multiple locations simultaneously. So far, so good indeed, progress is a fact of life and technological advances are being made at an ever-increasing rate. But as we embrace these changes are we forgetting some of the more traditional means of communication and is there a cost to this? As a professional sales coach, I recently advised a client and good friend on how to manage a proposal as part of an e-auction, which can be quite a hard way to win business. This is not an isolated incident, and I often come across people negotiating by e-mail or phone, trying to manage the ever-growing volume of day-to-day data whilst still maintaining relationships and cutting good deals. Businesses are increasingly being manoeuvred into this type of supplier/customer engagement in the new digital age. Of course, the advantages of digital technology are T Itsgood totalkSimon Buzza explains how we need to adapt our sales negotiating for the digital platform
Winning Edge | 27 Contributor Simon Buzza is a Fellow of ISMM and founding partner of the New Dawn Partnership, specialists in delivering effective negotiation practices and behaviours through training and consultancy. Visit www.newdawnpartners.com negotiating feature enormous and the Internet is key in nearly every aspect of commercial life. However, as we use mobiles and email more and more, we need to guard against losing some of the interpersonal and communication skills that we previously used in face-to-face to meetings. The negotiating table is rapidly changing, but are you aware of changes and what are you doing about them? All buyers are notthe same Negotiations involve some form of interaction and relationship between individuals and/or organisations, and the relative importance of the outcome is a key factor in determining the negotiation style. Lets be clear all relationships have a value its just that some are clearly more important than others. Low value relationships, where price is the key differentiator, are well-suited to the digital space. The sale and purchase of paper clips is a great example of how the Internet can introduce effective competition and minimise time and effort for both the buyer and seller. But we, as professional sellers, know that our customers are not all the same, and therefore dont hold the same value for us. Buyers face similar challenges as not all suppliers have the same value to them. And remember that value is not just measured by price or profitability, there are vital non-financial criteria such as reliability, trust, service and innovation that are equally, if not more, important (this was a key element of my advice to my client on the e-auction). But it can be quite difficult to explain your differentiated proposition and strategic relationship during an e-auction. Added to such challenges is the fact that old-style or unenlightened buyers are utilising the new technology to undermine the value and status of their suppliers. Whether its unintentional or deliberate depends upon the sophistication of the buyer. However, we should be in no doubt, some buyers are deliberately commoditising their suppliers in order to secure greater power over them. All these changes pose a series of challenges for the sales community when negotiating a deal: n The relationship once the holy grail of strategic accounts is demoted to a near irrelevance. Its replaced by a contract n Goodwill trust (being willing to do more than is formally required, traditionally a strong moral component of key relationships) is replaced by contractual trust, because how can you really trust someone you have not met? n Ethics and reputation, which are prime persuaders, are denoted by contractual terms rather than by the shake of the hand or a morally enforceable personal agreement n Non-verbal communication such as tone and body language becomes an irrelevance. And the power of words, combined with body language and tone, which is so important in building trust, is lost too n Written words become the only method of communication, and they can be misinterpreted. In the absence of seeing and hearing non-verbals, it becomes much easier for the words to be misunderstood n Emotion is removed from the negotiation, empathy is replaced by insensitivity, and a number of persuasion techniques are eradicated. Rapport and feel good emotions no longer count. Perhaps a purely digital relationship is not enough? More complex relationships and negotiations desperately need a more personal touch people want to buy from people and trust is paramount. If we allow relationships to be manipulated by old-style buyers who want to utilise the technology to suit their demands, or if we neglect relationships through the pursuit of faster, more efficient, high volume communication, then the value in our relationships is lost. In parallel with this, we run the risk of losing our high value negotiation skills as digital technology takes over and we spend less time practising them. If you have a high value or important relationship that you wish to protect and develop, a purely digital relationship will not be sufficient. The physical interaction between two parties is not something that can be effectively achieved over the Internet. It is a basic human fact that two people or organisations need to be physically present in order to build rapport and trust. Sellers and negotiators need to get back face-to-face with their key clients, they need to build relationships with the end-users, and they need to hone their rusty negotiation skills quickly before they are lost through neglect. What dowe needto do? n Segment customer or prospect portfolios according to value (and by this, I mean more than just profitability) n Develop appropriate guidelines and strategies for managing negotiations and relationships for each customer segment n Revise and hone negotiation and persuasion processes and skills. Recent research has shown that major companies without defined negotiation processes in place suffered an average fall in bottom line profitability of 63% between 2007 and 2008. In stark contrast, the top quartile of companies who have processes recorded an average profitability increase of 43% n Build personal relationships with clients, and establish stronger relationships with high value clients (prior to negotiations kicking off). Sellers need to get away from their desks and in front of prospective clients n Find the enlightened buyers and supportive operators rather than the manipulative old-style buyers, before it is too late n Embrace new technologies and digitisation as tools to support these strategies rather than being driven into technology-led relationships n Electronic and digital methodologies are very useful in certain circumstances, but they should generally be complementary to conventional human interaction and not allowed to supplant it. We need to guard against losing some of the interpersonal and communication skills we previously used in face-to-face meetings

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Winning Edge Article Nov 2011 - It's good to talk

  • 1. 26 | Winning Edge he influence of digitisation and the Internet has changed the way we communicate, learn and conduct commercial business. Easy access to the Internet, as with the introduction of the mail service or the invention of the telephone, has changed the nature of our connection to others in our social world. Mail made possible connections among people without physical proximity; the telephone facilitated communication between distant people, making rapid connections possible across long distances; and e-mail enables the rapid dissemination of information to multiple locations simultaneously. So far, so good indeed, progress is a fact of life and technological advances are being made at an ever-increasing rate. But as we embrace these changes are we forgetting some of the more traditional means of communication and is there a cost to this? As a professional sales coach, I recently advised a client and good friend on how to manage a proposal as part of an e-auction, which can be quite a hard way to win business. This is not an isolated incident, and I often come across people negotiating by e-mail or phone, trying to manage the ever-growing volume of day-to-day data whilst still maintaining relationships and cutting good deals. Businesses are increasingly being manoeuvred into this type of supplier/customer engagement in the new digital age. Of course, the advantages of digital technology are T Itsgood totalkSimon Buzza explains how we need to adapt our sales negotiating for the digital platform
  • 2. Winning Edge | 27 Contributor Simon Buzza is a Fellow of ISMM and founding partner of the New Dawn Partnership, specialists in delivering effective negotiation practices and behaviours through training and consultancy. Visit www.newdawnpartners.com negotiating feature enormous and the Internet is key in nearly every aspect of commercial life. However, as we use mobiles and email more and more, we need to guard against losing some of the interpersonal and communication skills that we previously used in face-to-face to meetings. The negotiating table is rapidly changing, but are you aware of changes and what are you doing about them? All buyers are notthe same Negotiations involve some form of interaction and relationship between individuals and/or organisations, and the relative importance of the outcome is a key factor in determining the negotiation style. Lets be clear all relationships have a value its just that some are clearly more important than others. Low value relationships, where price is the key differentiator, are well-suited to the digital space. The sale and purchase of paper clips is a great example of how the Internet can introduce effective competition and minimise time and effort for both the buyer and seller. But we, as professional sellers, know that our customers are not all the same, and therefore dont hold the same value for us. Buyers face similar challenges as not all suppliers have the same value to them. And remember that value is not just measured by price or profitability, there are vital non-financial criteria such as reliability, trust, service and innovation that are equally, if not more, important (this was a key element of my advice to my client on the e-auction). But it can be quite difficult to explain your differentiated proposition and strategic relationship during an e-auction. Added to such challenges is the fact that old-style or unenlightened buyers are utilising the new technology to undermine the value and status of their suppliers. Whether its unintentional or deliberate depends upon the sophistication of the buyer. However, we should be in no doubt, some buyers are deliberately commoditising their suppliers in order to secure greater power over them. All these changes pose a series of challenges for the sales community when negotiating a deal: n The relationship once the holy grail of strategic accounts is demoted to a near irrelevance. Its replaced by a contract n Goodwill trust (being willing to do more than is formally required, traditionally a strong moral component of key relationships) is replaced by contractual trust, because how can you really trust someone you have not met? n Ethics and reputation, which are prime persuaders, are denoted by contractual terms rather than by the shake of the hand or a morally enforceable personal agreement n Non-verbal communication such as tone and body language becomes an irrelevance. And the power of words, combined with body language and tone, which is so important in building trust, is lost too n Written words become the only method of communication, and they can be misinterpreted. In the absence of seeing and hearing non-verbals, it becomes much easier for the words to be misunderstood n Emotion is removed from the negotiation, empathy is replaced by insensitivity, and a number of persuasion techniques are eradicated. Rapport and feel good emotions no longer count. Perhaps a purely digital relationship is not enough? More complex relationships and negotiations desperately need a more personal touch people want to buy from people and trust is paramount. If we allow relationships to be manipulated by old-style buyers who want to utilise the technology to suit their demands, or if we neglect relationships through the pursuit of faster, more efficient, high volume communication, then the value in our relationships is lost. In parallel with this, we run the risk of losing our high value negotiation skills as digital technology takes over and we spend less time practising them. If you have a high value or important relationship that you wish to protect and develop, a purely digital relationship will not be sufficient. The physical interaction between two parties is not something that can be effectively achieved over the Internet. It is a basic human fact that two people or organisations need to be physically present in order to build rapport and trust. Sellers and negotiators need to get back face-to-face with their key clients, they need to build relationships with the end-users, and they need to hone their rusty negotiation skills quickly before they are lost through neglect. What dowe needto do? n Segment customer or prospect portfolios according to value (and by this, I mean more than just profitability) n Develop appropriate guidelines and strategies for managing negotiations and relationships for each customer segment n Revise and hone negotiation and persuasion processes and skills. Recent research has shown that major companies without defined negotiation processes in place suffered an average fall in bottom line profitability of 63% between 2007 and 2008. In stark contrast, the top quartile of companies who have processes recorded an average profitability increase of 43% n Build personal relationships with clients, and establish stronger relationships with high value clients (prior to negotiations kicking off). Sellers need to get away from their desks and in front of prospective clients n Find the enlightened buyers and supportive operators rather than the manipulative old-style buyers, before it is too late n Embrace new technologies and digitisation as tools to support these strategies rather than being driven into technology-led relationships n Electronic and digital methodologies are very useful in certain circumstances, but they should generally be complementary to conventional human interaction and not allowed to supplant it. We need to guard against losing some of the interpersonal and communication skills we previously used in face-to-face meetings