U.S. Army recruits are required to attend Boot Camp before they are allowed on the battlefield. Fighting for your life, defending your homeland and learning to work as a team takes more than bravery. The Army spends 10 intense weeks preparing its recruits to become soldiers.
In a building supply business, however, it is not unusual for owners and managers to hire salespeople one day, and after spending a few weeks teaching them enough to know a 2×4 from a window unit, send them into battle with enough pricing authority to make multi-thousand dollar decisions. And we wonder why our industry’s gross margins are anemic.
I earn a significant percentage of my living standing in front of raw recruits sitting side-by-side with battle toughened veterans to hone their skills at basically two things: persuading home builders to do business with their company and learning how to successfully negotiate building material packages that sometimes exceed a quarter of a million dollars.
Negotiating is a skill. When a buyer who has been classroom-trained as well as field-trained goes up against a relative newcomer to the negotiating arena, the results can be ugly. Too often, the poor recruit is simply ill-prepared for the big leagues.
Every year, perhaps at the International Builders’ Show or in many local HBA chapters, negotiating seminars are among the most popular opportunities men and women making buying decisions have to develop the skills that will pay for themselves many times over. On the sales side of things, however, this is frequently not the case.
What I am trying to say is that if your salespeople have never had any formal training on how to quote and hold their prices, they are at a distinct disadvantage.
The builder wants a lower price with little concern for the profitability of the supplier. The salesperson wants an order, many times with little concern for the profitability of the sale. Sales skills influence who gets the order, but negotiating skills influence how much profit is made on the sale.
Even without being given any pricing authority, the sales- person remains the only person sitting at the negotiating table who is in any position to defend his or her company’s flank. Let’s face it, when money is at stake, buyer and seller alike are highly motivated to do whatever it is they have to do to close the deal.
Newbies are oftentimes extremely naive. They are unaccustomed to going up against professional buyers who are also highly trained, but they are rewarded when they are able to bring home the bacon.
I recommend that managers role-play with their sales- people so they will be more confident when the freshly trained member of the purchasing team takes the field. If the salespeople learn what to say and how to say it in a role- play, they will be more confident when they’re negotiating for real.
Here are three questions all salespeople should be prepared to answer:
1. How does the competitor’s material list compare to ours? Are you really comparing apples to apples?
2. Expressed in measurable terms, what benefits will the builder receive when he does business with our company that he does not receive when he does business with our competitor?
3. What services will the builder receive from the salesperson that he will not receive when he buys from our competitor.
A well-trained and physically hardened opponent is no coward. Buyers—like soldiers—are masters at deception. They are trained to use intimidation when it is called for. I often call this the “head fake” objection. There’s nothing illegal, immoral, or unethical about using a head fake on the sports field. The same is true in business. Do your people know what to look for? Are they prepared to defend their prices?