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Salespeople are Scared…and It’s Hurting Prices

It’s not often that we refer to daytime television here on the PricingBrew blog, but TV’s Dr. Phil McGraw has a quote about fear that seems particularly appropriate for B2B sales. He said, “Eighty percent of all choices are based on fear. Most people don’t choose what they want; they choose what they think is safe.”

Decision-making based on fear might be a universal part of the human condition, but it is particularly problematic in B2B sales.

Most salespeople project an air of confidence, sometimes bordering on arrogance. They have to. They’re in the trenches every day fighting to win — and being able to project strength, certainty, and belief in your product gives you a huge advantage in the sales process.

But for almost all of them that confidence is partly an act. Like every other human being, salespeople are afraid. And in their case, one of the things they fear most is losing a deal.

They are compensated based on the sales they close. And while most of them thrive on a certain level of risk, there’s a limit to how much they are willing to gamble when it comes to whether or not they are going to be able to pay the month’s bills.

As a result, they sometimes make decisions that seem ridiculous to those of us who don’t share that fear. They will negotiate prices that leave margins at a bare minimum — or even non-existent — if it means they can hit their revenue targets and earn their commissions.

Making matters worse, most salespeople are completely outmatched by buyers when it comes to negotiation capabilities. Pricing Brew research reveals that while the majority of procurement professionals have had negotiation training, most salespeople have not. That leaves the salespeople as easy prey for savvy buying teams.

Those negotiation training sessions often specifically teach participants to amp up salespeople’s fears. Buyers learn how to go radio silent at just the right time, hoping to provoke a lower price offer from the salesperson. They also learn to imply that they are willing to walk away from the deal in the hopes of getting more favorable terms.

Sadly, these techniques often work.

But the situation is not hopeless. You can assuage your sales team’s fears by teaching them how to recognize and neutralize those negotiation tactics. When they understand the game the other side is playing, they will inevitably get better at playing the game.

We discuss this idea in the Reducing the Friction Between Sales and Pricing webinar. It explains how fear can color negotiations and offers some practical tips for helping your sales team manage that fear.

One of the best approaches is to get some training in negotiation. And it’s even better if pricing and sales goes through the training together as a way to build camaraderie. If you don’t currently have a negotiation component to your training program, the webinar on Exposing the Secrets of Price Negotiation is a great place to start. It highlights some of the most common tricks and gives you tools and strategies that can help you level the playing field.

Making decisions based on fear almost never ends well. But the right information and preparation can make it much easier for your team to face down those fears and negotiate better pricing.

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