CHAPTER 5

Sales Challenges

Selling but Holding Your Price

A customer or client may sing praises for your product and his firm’s relationship with you. At the same time he may insist that you reduce the pricing of your product or services to maintain that relationship.

Some sales teams then spend time thinking about where to make cuts and how to reduce prices to satisfy the customer’s demand. The best course, however, would focus on how to maintain the relationship and at the same time not compromise pricing integrity. This may require some good old-fashioned research and analysis of the client’s needs and marketplace alternatives. If such research reveals that you are the right fit and best alternative for the client, then scripting may be a useful tool in protecting your pricing and renewing the client’s business.

The script is used to craft the message to the client on the benefits of the product or service you offer and why pricing should remain at its current levels or, perhaps even better, be increased. In some sense this requires ignoring the client’s statements about the need for price reduction—a negotiations approach in which you seek a result that the customer has suggested he will not accept. It can be unsettling for a salesperson or account executive to come back to a client with a proposal that ignores the client’s demand for a price reduction.

The scripting process helps overcome such trepidations and builds a comfort level in the position to be expressed. The more confidently the seller states her side’s thoughts or position, the more likely it is that the buyer will recognize that getting a reduction is not achievable. The expression of the seller’s position should not be an “in your face” statement, but rather an attempt to help the client achieve his objectives without losing sight of the importance of the seller maintaining her pricing and margins.

A professional sports team that is a client of my Negotiations Institute had a long-standing relationship with a corporate sponsor—a real estate brokerage firm. The sponsor enjoyed the affiliation with the sports team, and also got substantial exposure in the marketplace with prospective commercial and residential real estate clients. On a number of occasions during the past five years, the sponsor had spoken approvingly of the market position it had been able to achieve through the affiliation with the team.

Nevertheless, with six months remaining on the sponsorship agreement, the real estate company’s president informed the team’s account representatives that it would have to receive more inventory and a 25 percent reduction in pricing in order to continue the relationship. The inventory in the sponsorship package included signage in the stadium, advertising in the team’s programs, promotion on the electronic scoreboards, and a suite that the real estate firm could use to entertain clients. The pricing of the package was $500,000 per year. In addition to the requested price reduction, the real estate brokerage suggested that it would also need in-game radio ads as well as more prominent signage included in the deal if it was to go forward with the team.

Although there were other real estate firms in the marketplace that the sales team might call upon as alternatives to this client, the team really desired to hold on to the relationship because of the brokerage’s prominence and long-term connection with the team. Some of the sales team felt that they should provide the client with the additional inventory and try to minimize the reduction to something in the range of 10 to 15 percent.

We advised the team’s corporate sponsorship group that their offer to the real estate firm ought to take some of the inventory off the table while emphasizing to the client the real benefits of the relationship, such as the exclusivity in the client’s business area. We also suggested to the sales team that they present a price increase in order to be consistent with other contracts being executed with sponsors—perhaps in the range of 15 percent.

After some resistance for fear of losing the account, the corporate sponsorship group agreed to pursue our recommendation. The sales executives also agreed that in this case a written proposal would express the team’s position with clarity and a certain level of unambiguous definitiveness. We then asked them to script out how they would make the initial presentation to the client, and after several rounds of devil’s advocacy the following e-mail on team letterhead was developed:

Dear [Client],

The [sports team’s] brand within the region is strong and is growing. Last year special events and concerts were added and over 80,000 flocked to [our athletic facility] to enjoy them. Customized activations and marketing programs were created. Attendance is up 36% vs. 2010, TV ratings are up 108% vs. 2010, radio is up 59% vs. 2010, page views on [our website] are up 119%, and Facebook Friends are up 118%.

Simultaneously, the [sports team’s] brand association and return on investment for partners is strong and growing. Numerous awards have been won by our marketing and promotions staff for marketing initiatives and in-game entertainment execution. Vendors have experienced double-digit sales growth. Within the past season we have added over a dozen new corporate partners and have had record in-season partnership sales. To deliver the most effective and valuable experiences for our fans and partners, we will continue to create and enhance opportunities. Some recent examples are programs for kids and social media initiatives.

Due to the factors above, the [sports team] has increased team expectations in regard to the value of team assets and exclusivity in partnerships. Due to the competitive nature of the marketplace, we have identified the real estate brokerage category as one where we must grow revenue with current partners and/or secure additional partners.

You have stated your need to reduce the financial investment in our partnership. At the same time, however, you should know that while we can adjust your investment terms, we are unable to maintain assets or exclusivity on a flat or reduced investment.

Please see the attached spreadsheet that has two options for your review. Option A, with a price increase of 15%, maintains almost all assets from the previous agreement, and also includes several additional assets which you requested. Option B, which uses your current pricing level, includes reduced assets and the elimination of exclusivity for your suggested investment level.

We hope you find one of these options acceptable and look forward to the continuation of our mutually beneficial relationship.

Best regards,

[Team Executive]

After several more rounds of discussion and scripted face-to-face presentations (which denied the real estate company’s continuous requests for inventory increases and price reductions), a deal was made. Much to our client’s surprise, not only was the team able to actually hold the line on inventory, but it also achieved a 10 percent increase in the pricing of the sponsorship package for the next five years.

In fact, the team executives who led the negotiations later commented on the impact the scripting had on their success and said, “We reached a deal that was considerably above our highest goal and strengthened the relationship. The preparation, the scripting, and the counsel were outstanding.” They also said, “Not only did the scripting process produce an immediate return on investment; it also implemented a systematic approach for us to negotiate future deals more effectively.”

Keep in Mind:

• Rather than just think about where to make cuts and how to reduce prices to satisfy the customer’s demand, focus on how to maintain the relationship while not breaking pricing integrity.

• Have a thorough knowledge of the marketplace so you can compare your situation, as much as possible, with similar situations.

• The more confidently you state your thoughts or position, the more likely it is that the buyer will accept that getting a reduction is not achievable.

• The scripting process reduces the seller’s insecurity stemming from ignoring the customer’s demand and builds a comfort level in the message.

• The expression of the seller’s position should not be an “in your face” statement, but rather an attempt to help the client achieve its objectives without losing sight of the importance of the seller maintaining its pricing and margins.

Creating an Objection Planner for Sales Teams

Most of the scripts in this book are designed to meet the challenges of a specific situation. This chapter is a little different. Sometimes it is useful to develop scripts in advance to respond to recurring situations we face.

For example, I have worked with organizations in a variety of industries in which salespeople must deal—on a recurring basis—with objections raised by potential customers. A home builder may have to deal with questions about room size, proximity to schools, curb appeal, or even doorsill heights. An insurance broker may be queried about the appropriateness of a policy for someone of the prospect’s age, premium levels, or other insurance products compared to whole life insurance. And car salesmen may have to be ready for pricing objections based upon Blue Book or other dealer quotes, questions about the value of extended warranties, or delivery times and service issues.

The salespeople must develop blueprints to confidently rebut competitor claims, unsubstantiated rumors, or consumers’ misunderstandings about the products or services they are selling. The best preparation for this challenge often involves developing a script with peers in the same situation. Proposed answers can be drafted and shared with team members. After some group “devil’s advocating,” an “objection planner” can be developed that members of the sales team can turn to as a script for guidance. Caution, however, should be exercised not to use the ready-made “planner” responses as an excuse to go on automatic pilot. Never stop listening to the customer. What the other side says may contain shades of difference from the objection you prepared for.

Before the affinity credit card pioneer MBNA merged with Bank of America, I and others from our Negotiations Institute trained MBNA workers, including members of the business development team, in negotiation and influencing skills. I worked particularly with managers negotiating deals in which MBNA partnered with potential and renewing affinity credit card partners, including alumni associations, university athletic departments, high-visibility retailers, and trade associations. In its negotiations, MBNA needed to sell these and other groups on why it was the best bank to acquire or renew the organization’s endorsement. The endorsements involved, among other things, putting the organization’s name and logo on the credit card and being able to market the organization’s member or customer list. MBNA would, in turn, offer the group compensation based on account activity and marketing programs to the group’s members or customers to activate accounts. Guarantees or advances against future earnings were also sometimes part of the package.

Because of the intense competition among bank card organizations—and due to MBNA’s market dominance—the competition floated rumors and leveled attacks against MBNA and its credit card product. After discussing the situation in our training programs, we noted that the attacks and rumors fell into a pattern. For example, it became common for an association to suggest that it was being offered a less favorable deal than other associations—that its prestige was being disrespected. Or that MBNA rotated account executives too often, was so big that the potential group would feel lost, or indulged its executives extravagantly so as to reduce the pot of potential compensation for the group.

Once we established what we were up against, we set out to develop the right words to counter what we were hearing. The objection planner for the four issues noted above looked something like the following.

Issue: Is my compensation structure in line with schools that are considered to be my peers?

Possible response: [Ask: Which schools do you consider to be your peers? Why do you consider them to be your peers? What are the factors you use to compare yourself?]

We work hard to keep compensation for like programs consistent; however, just as I’m sure you wouldn’t want us discussing your compensation with your peers, we prefer not to discuss theirs with you. In fact, we’re all contractually obligated not to discuss contract specifics with others. I will say that we take a lot of factors into consideration when developing a financial offer, including the types and cost of the products that we will be offering to your members, the size of the list, access to marketing channels and venues, . . . the strength of the affinity, and the historical performance of the portfolio. We’re happy to discuss how we can increase your revenue stream using these factors.

Issue: I have had x account executives over the past x years. It’s like a revolving door at MBNA, and that hurts our ability to develop a strong relationship.

Possible response: [If you’re likely to hear this objection, know what the previous account executives are doing today and be prepared to discuss. You may also want to be prepared to discuss continuity as it relates to your sector or regional director since they tend to move less often than AEs. You should also develop some examples of new ideas that have come from either a new AE for this program or another one in the sector. If you personally started on the phones at MBNA, tell that story. Know your success stories.]

We’re just as interested in building a strong relationship as you are, and we believe that we have one. Can you offer me some examples of when a change hurt the program?

Our approach is by design. We promote from within, identifying outstanding people who learn the business from our customer satisfaction, customer assistance, and credit areas and having them work directly with endorsing organizations. They bring different experiences to the table and understand the organization. The new AE brings new insights, fresh ideas, and experiences from other areas of the bank (in many cases, the new AE can apply lessons learned in a different sector to your program), which will help you build your asset, i.e., get more accounts, increase loans, increase royalties, and perhaps even add members.

Our approach stresses continuity while fostering creativity and innovation . . . Many of our senior managers were account executives and marketing managers at one time, and they bring that experience and understanding of group needs to their jobs. Our commitment to you is that there will always be a good person managing your program.

Issue: You treat us like a small fish in a big pond. You have too many groups, and we feel as if we’re not important to you.

Possible response: [Ask where the group heard this. If it was a competitor bank, ask whether the group would like to see a list of other large groups that chose to move their programs to MBNA from that competitor bank over the past year. It’s also very important that you know what MBNA has given the group over the years as a way of focusing on how it dealt with the group on an individual basis. Ask if we failed to meet its needs. If we have, ask for examples.]

MBNA’s core focus is credit cards, and has been since 1982 when we opened with 15 endorsing groups in an abandoned A&P supermarket. Today, we are much larger—we . . . have endorsements from more than 5,000 groups—that’s 5,000 votes of confidence from endorsing organizations about MBNA’s ability to meet their needs and the needs of their members. We are experts in the affinity business. We had the same concerns you expressed as we began to grow. That’s why we created smaller businesses by grouping similar endorsing groups such as colleges and universities and professionals. This enables us to focus our marketing efforts and apply lessons learned with one organization to others within these “sectors.” Then, as we continued to grow, we built upon the sector approach by opening regional offices to get closer to our customers . . .

Our credit process is another example of our focus on the customer . . . Using credit analysts to make decisions, rather than letting the computer do that job as other large issuers do, enables us to focus on each customer, one at a time.

Issue: MBNA spends a lot of money on luxuries. I heard a lot about your airplanes, yachts, or cars.

Possible response: That’s not the first time I’ve heard that, but let’s talk about perception versus reality. We have one large boat we use for entertainment purposes—ours is, after all, a relationship business. We have a couple of corporate jets—just like many Fortune 500 companies (and fewer than most)—so that our executives can get quickly to our regional and international offices and to our customers. We have some antique automobiles that we use in our marketing because prospective customers are drawn to them when we market at events, particularly ones in the motor sports sector . . .

These scripted answers to common objections helped build the business developers’ confidence in responding to customer concerns. The objection planning process was frequently an effective tool for the developer to solidly make the bank’s case to a new endorser or one contemplating renewal. Even when not successful, team members benefited from their collaboration with their peers in developing the scripted answers in the planner. They felt increased confidence in making points to hesitant renewal prospects and potential new customers.

Keep in Mind:

• Common customer concerns or objections may best be dealt with by objection planner scripts.

• Collaborative peer efforts in building and working out responses through devil’s advocacy can lead to effective messaging.

• The objection planner “possible responses” are a foundation for more confident answers to customer concerns.

• Embrace the planner points, but not at the expense of listening and properly matching the response to the concern.

Preparing for Varying Scenarios—Contingency Planning

How often have you gone into a meeting with a plan of action, only to find that the challenge posed by the other party is not what you expected?

You’re like a quarterback approaching the line of scrimmage and finding the defense in a different scheme than was anticipated. At that moment, you only hope you’ve adequately planned for contingencies and can seamlessly shift to a suitable play. You sure don’t want to have to wing it.

It’s the same in sales. You may plan for a particular client response and get another. This section shares some concepts with “Creating an Objection Planner for Sales Teams,” above. But the situations are different. In this case, you are engaged in a specific sales transaction. In the other, you are developing answers to a generic set of sales objections raised by potential buyers. The key in this circumstance is to contemplate alternative reactions to your proposal by the client and then “Draft, Devil’s Advocate, and Deliver” a response to each possibility.

If you’re not prepared with contingencies, you may appear to be surprised and hesitant in responding. Creating backup plans allows you to confidently address the client’s position, improving the likelihood of achieving your objective.

In 2011, a broadcast radio client of mine sold a $100,000 sponsorship package to a major medical system for the launch of its new state-of-the-art cancer facility. The inventory in the package included blanketing morning and afternoon drive times with commercials and allowing the medical system significant participation in the station’s health fair. That would give the cancer center the opportunity to interact with the public at a well-attended live event.

The chief marketing officer who made the buy for the health system expressed satisfaction with the program and planned to make a similar buy for another of the medical system’s centers the next year.

Halfway through the campaign, however, the CMO left and was replaced by another executive with whom the broadcaster’s sales team had little familiarity. When the sales group leader made contact with the new CMO, she was told that  her group could make a presentation. But she was also informed that the CMO had other priorities and might only be able to give the team an initial visit and follow-up meeting before he made his decision “on where to go with the sta- tion.”

The sales team recognized they may have limited opportunity to make their case and that preparing a single proposal could miss the mark. So they prepared a “contingent series of scripts” to prepare for their meeting. They also were well schooled in probing and were ready to ask questions about the CMO’s objectives if given the opportunity. In the final analysis, they wanted to be ready not only to move forward with the relationship, but to deal with whatever direction the CMO pointed. They scripted the following four scenarios for this initial meeting.

Scenario 1—CMO informs us that the medical system wants to keep all inventories the same for 2012

“We are happy to hear that everyone wants the partnership to continue for 2012 but thought that the medical system would consider adding to the inventory due to the success of our partnership. What are your objectives for the 2012 campaign? We will analyze the 2011 package and see if everything can remain as is for 2012. Are there any proposed changes to the time slots and programming plan we followed previously?”

Scenario 2—CMO informs us that budgets have been trimmed and the medical system will need to rework the inventory, but its preference is to reduce the package but stay linked to the morning and some afternoon drive time

[In this case, probing at this initial meeting may better serve our purposes.]

For example, we could ask, “What is the reason for the budget reduction? What did the medical system have in mind when it suggested the need to rework inventory?”

Then: “Obviously this is disappointing and we will need to reevaluate the relationship should the medical system lower its investment. Are the elements of our partnership covered by a specific radio sponsorship budget or are they part of the overall media budget?”

Then: “Let us get back to you.”

Scenario 3—CMO informs us that the medical system would like to do more in 2012 to brand more of its services and become more active with the partnership

“This is good news. We also want to see this relationship continue to grow. What are the elements of programming and additional demographics you are looking to add? Have you set a budget at this point? In any event, let us do some analysis based on financial information you give us and let’s see what kind of package we can craft to serve your objectives in 2012.”

Scenario 4—CMO informs us that due to managerial changes and budget shifts the medical system is not going to be able to renew its partnership with the network

“How was this decision made and what other budgets have been affected? What led to these changes and what is happening with other sponsorship/marketing initiatives? Hypothetically speaking, if you had it in the budget, would you support a spending amount with us similar to that of 2011? Why not let us put something in front of you should you change your mind?”

Other points to be addressed that are not necessarily scenario specific:

• If asked about a multiyear agreement or the category outlook past 2012—we will ask, “How many years?” And then we will state that all options are being explored and we want to talk to all interested parties at a future date about the opportunities that could exist.

• We might ask, “Is the medical system considering any new media partnerships in the market in view of the leadership changes?”

After acting out the various scenarios among themselves, the sales team members felt ready for almost anything. What they encountered was completely unexpected. Instead of meeting with the CMO as anticipated, the team ended up in a session with the medical system’s advertising agency account manager, who excused the CMO’s absence due to other commitments.

This was a scenario the sales team had not planned for. But the team was not thrown off balance. The account manager opened by saying that the medical system was inclined to continue with a radio campaign at the station—but because of reduced budgets it would be a more limited campaign. This triggered the probing questions of scenario 2.

The team had been initially taken aback by the CMO’s absence. But they recovered quickly and were able to get information from the account representative that allowed them to put together a new package with reduced afternoon inventory, but no price reduction. The team suggested that if the medical system did not buy the time slots, there were other health care organizations that would. As of this writing, it appears the medical system will also be renewing for 2013. The CMO, however, has remained as elusive as ever to the broadcast sales team.

Keep in Mind:

• Contemplate alternative responses and brainstorm contingent responses to each.

• Draft proposed responses that best address each of the contingencies. Where relevant, prepare probing questions.

• Consider omnibus questions that may be asked regardless of the scenario that unfolds.

• Deliver a confident response whatever route the client or customer may take.

Fund-raising to Receive a Large Donation

Few people are comfortable asking others for money. Even fund-raising experience and a good cause do not necessarily diminish discomfort. Board members, school or college alumni, friends and family of a person afflicted with a disease, and an array of others may feel a strong attachment to a charity connected with their cause. And yet while understanding the importance of the cause may inspire them to action, making the request of a potential donor, whether in person or by telephone, remains difficult. The scripting process may empower the fund-raiser to meet the challenge and hopefully lead to the potential donor contributing to the cause.

The best fund-raisers don’t just make the ask—they begin with some probing questions directed at learning about the potential donor and his or her giving interests. Asking questions may also contribute to building a relationship between the donor and the fund-raiser. The answers to the queries may ultimately shape the request. Whether they do or not, the solicitation must be delivered with deference, but firmly. A request for funds should be pegged at an amount above the actual need. Doing so, though uncomfortable, is facilitated by scripting the ask. Even the most giving donors are inclined to make a gift that falls below the request.

Information relating to the potential donor’s giving history and interests, visual aids, and the cause’s appeal will all play a role, but the message scripted and delivered is the ultimate solicitation impact point.

Having the right script will help turn a reluctant or meek fund-raiser into an effective spokesperson for the cause.

A few years ago I was approached by an attorney friend, Sean, who sat on the board of a leading teaching hospital. He explained that he was charged with seeking significant support from a financial institution that had recently established a presence in the community. The goal was to persuade the bank to make a $1 million “naming” contribution for a stem cell transplant center at the hospital, meant to aid in the battle against a variety of cancers, autoimmune disorders, and hematologic diseases.

Extensive research revealed that the financial institution supported hospital causes in other cities and that its chair had real interest in cutting-edge cancer treatment. Despite the encouraging information, Sean was uneasy making a solicitation of that magnitude. Imagine, then, the level of his discomfort when I suggested that to gain the $1 million objective, he should ask for $1.25 million because the foundation’s board had a history of trimming requests directed to it.

Sean and I honed a script that supported his confident solicitation. We met with the executive director of the bank’s foundation as well as its regional president. During our meeting we spent some time talking about the bank’s growth since moving into our area and asked questions to learn about recent foundation activities. At that point, Sean smiled and began to deliver our ask.

We appreciate your giving us the time to tell you about our hospital’s proposed stem cell transplant center. We also want you to know how happy we are that your bank has joined our community.

In order to give you a real sense of the impact the center will have in the battle against certain cancers and other diseases, I want to show you a brief video about the project that demonstrates the necessity of the center. [Play the video.] Do you have any questions?

[May have to modify the following if assumptions change based on answers to the opening probing questions.] Now, let me tell you what we propose. We would like to call the center the [Bank’s Name] Stem Cell Transplant Center. It’s going to take $2 million to get the center up and running. We are asking the bank, as the naming rights partner, to underwrite $1.25 million of the cost. Here is a detailed budget for the project. [Hand over a sheet of the detailed budget.] Do you have any questions?

We know your institution makes a big difference in the communities it serves. The [Bank’s Name] Stem Cell Transplant Center will lift the level of health and well-being of its constituents in our community. It’s projected that the center will be able to significantly aid those suffering from a variety of diseases, especially cancer. The bank can join the hospital in creating a healing place for many. We hope you agree.

Thanks for your consideration and feel free to reach out to me if you have any questions.

[May insert prior to departure:] By the way, do you have a timetable for making a decision on the project?

Before leaving, Sean and I were told that we would have an answer within ten days. In half that time, Sean received a hand-delivered letter informing him that the bank’s foundation was happy to support the creation of the stem cell transplant center with a contribution of $800,000 to be paid within two months’ time. The letter also stated that the bank wanted to participate in all decisions relating to publicity with respect to the contribution and the dedication of the center. That was welcomed by Sean and the entire university medical center fund-raising team. Afterward, Sean showed me that he had carefully folded a copy of the script for the ask and placed it in his wallet as a model for future asks.

Keep in Mind:

• Research your potential donor ahead of time and if possible begin the interview with some further questions.

• State a connection point that addresses the donor’s interest, if any, in the cause.

• Clearly express the impact contributions have on the cause.

• Support, when appropriate, with visual aids and/or printed information.

• Aim high with reason.

• Practice the script to build confidence and reduce apprehension about asking for money.