Episode #133: Joanne M Smith
The Power is in the Pre Work
Joanne M Smith
Joanne M Smith is the author of ‘The Price Negotiation Playbook’ and ‘The Pricing and Profit Playbook’. She was the former Marketing Customer Loyalty and Pricing leader for DuPont. Joanne is now the President of Price to Profits Consulting and is on the Faculty of the ISBM, The Institute for the Study of Business Markets led by PennState and the Professional Pricing Society. Joanne works with business to business businesses and sales teams to improve their pricing strategy and capability.
[01.07] Joanne defines Negotiation – as closing the deal at the right price, and for Joanne the most important thing is the right price.
[01.31] Why don’t some salespeople don’t like to negotiate and what can we do to change this – Joanne feels that some sales people like to negotiate the front part of the conversation, building relationships and talking about the offering, however it becomes less fun when they get to the price and the conversation becomes scary, as they risk loosing the deal and if they get the deal then they feel afraid that they will hurt the long term relationship and trust of the account. In order to change this Joanne believes in doing three things 1) having the right mindset, 2) having the right skills and 3) practising those skills so they become natural.
[02.18] Joanne explains how negotiation is important for business – in the B2B world most salespeople discount far more than they need to. Joanne shares statistics from when she trains experience sales people the majority of which rate themselves as a 4 or 5 on a scale of 1-5 on sales negotiation but when rating themselves on price negotiation 90% of them score themselves as a 1,2 or 3 – weak to mediocre. There is a great need to improve skills in this area.
[03.22] How do you plan and execute a high stakes negotiation – Joanne shares that she uses a five step negotiation process, with two pre-steps – pre qualifying the deal – don’t work on deals that you have no chance of getting. Second pre-step is to formally prepare for the negotiation. The real power is in the pre work and the skills you have to make smart decisions. The five steps process at the end is the delivery mechanism that brings it all together. Step 1 is to diffuse any discussions around price and redirect it to value, step 2 is to uncover their needs, step 3 – teach the customer something of value that leads them to want to buy from you, step 4 – take all the learned knowledge to develop the right offer or offer choices for that customer opposite their needs and compare to alternatives that they could potentially use, bring in financial quantification and then step 5 turns to the actual price side. Joanne shares at this point she uses a practical framework to assess what her pricing power is to this customer for this deal and whether she holds firm or needs to back off if there is some discounting that needs to take place.
[08.10] What are the attributes of a good sales negotiator – Joanne feels that genuine confidence which is visible to the customer is a good trait of a good sales negotiator as well as having a comfortable tension
[10.08] Joanne shares her top three negotiation Do’s and Don’ts – don’t play a win loss game, let your behaviour have an upward pressure on market price so that you win your highest earnings. Don’t discount just because buyers ask you to, if you have done your homework properly and you know you have a fair offering on the table have the confidence to hold to it and not discount further. Lastly don’t go into a negotiation without a walk away position, you do have to know when you are going to walk away and don’t be afraid to use it.
[12.59] Joanne shares her favourite negotiation story – about a billion dollar business in a very competitive market and couldn’t raise price. By helping them with best skills training and working on strategies Joanne raised their prices by 12%, within weeks they were signing deals and contracts which led to an increase of one hundred million dollars of increased earnings, just by changing their own behaviours impacted on customers and competitors following their lead.
More About Joanne
What was the last book you read?
I read quite often, authors like James Patterson and Lee Childs.
Who / What inspires you?
I am inspired and energized by helping businesses and sales teams gain the confidence and the skills to quickly deliver improved pricing and profits. I love to hear their success stories.
What aspect of your own Social Media are you most focused on improving at the moment?
I work with businesses on their pricing strategy through execution, yet working with sales teams to improve their price negotiation skills is where I focus most…hence my new book “The Price Negotiation Playbook”.
Sports, especially kick boxing, paddle boarding, hiking.
How can our listeners contact with you?
Through my website (www.price2profits.com), my email (firstname.lastname@example.org) or LinkedIn (smithjoannem)