Jola Cloud Solutions' Blog

Does negotiation always have to be win-win?

Posted by Andrew Dickinson on 30-Sep-2019 11:08:47

I was on a beach and a guy tried to sell me some local precious stones. Very quickly we went from $100 to $10 and when I tested the ‘stones’ they were actually lumps of plastic. He shrugged and moved on to the next tourist – no hard feelings on either side. His negotiation approach is more zero-sum than win-win but has this damaged his business? – probably not.

Handle negotiations with a one-off sale badly in B2B and you may harm your reputation or your bottom line, but usually only on that one deal. However, getting it wrong with an ongoing relationship can be disastrous, especially in the channel. Where a company is re-selling your product, you have to know exactly where you fit in the value chain. What is the Standard for your product? What will your partner need to sell at, to win against the competition? - and still make enough margin to excite them, and their salespeople. What is unique about your offering and how does that translate into benefits for your partner and their customers?

I see basic negotiation mistakes all the time in my industry and usually due to lack of research and preparation. Suppliers trying to sell products to resellers without considering what they will sell it for, or assuming that their ‘unique’ features are benefits, without having properly tested the proposition. On the other side, resellers come back with random requests for discounts and get offended when you ask why. Alternatively, they invent prices they have received from other suppliers in an attempt to improve their own margin.

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Topics: Business

What if you can't negotiate a deal?

Posted by Andrew Dickinson on 30-Sep-2019 11:06:02

Going into a negotiation, there is an assumption that you will come to an agreement. If you are unable to agree terms this is often viewed as a failure but whether or not it is depends on how well you have prepared.

Before you start a negotiation it is important to think through potential outcomes. Which party has most to lose if you cannot agree? If you have done your homework on Standards you will know the range of acceptable outcomes. If you cannot get to a deal in this range, which side is most adversely impacted?

You should be able to answer this question for both sides and for individuals on both sides. e.g. perversely a product manager incentivised on average margin may be more inclined to lose a large customer than give them a significant price cut to stay. However there is a cost to switching suppliers as well as acquiring and on-boarding customers, and moving away may be the wrong decision for both organisations. One option is to adjourn the conversation with the product line and find someone with a more holistic view. Even then they may overestimate the value of inertia, so you have to make them believe there is a real possibility of losing your business. Properly research the alternatives and be prepared to walk away from a deal if your minimum requirements cannot be met.

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Topics: Business

New Manager

Posted by Andrew Dickinson on 30-Sep-2019 11:03:34

It doesn’t necessarily follow that just because you’re great at your job, you’ll naturally make a great manager. Management is a learned skill and if you can understand a few of the basic principles you will get off to a great start. Here's my top five;

1.    Feedback. There is a very small, very old book called ‘The One-Minute Manager’ - read it. Try catching people doing things right to start with. Focus on what happened rather than your opinion. “I listened to that call and your approach immediately calmed him down. I think this was because you…” Avoid ‘yes-but’ feedback. “That was really good but maybe if you…”. If this becomes a regular style, employees ignore the positive start and brace themselves for the negative punchline.

2.    Coaching and training. Your most important job as a manager is to improve the people working for you. Introduce regular and well-planned training that addresses the knowledge gaps of your staff. Don't just use ‘chalk & talk’ training. Get people involved and regularly test their learning. On skills, you need to agree a framework of feedback and learning both on-the-job and in the classroom. This is most relevant in sales where observation and role plays are far more effective than PowerPoint slides and ‘watch-me’ coaching.

3.    Mood. Displays of emotion are often counter-productive because they undermine your message and authority - if you lose your temper you lose the argument. I often see new managers adopt a deliberately surly demeanour as a defence mechanism and a badge of authority – this is a mistake. As you develop as a manager you will become deliberately more vulnerable. This opens up more space for creativity, employee development and good decision-making.

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Topics: Business

Motivation as a process

Posted by Andrew Dickinson on 30-Sep-2019 10:47:46

Someone shared a ‘guru cartoon’ with me today (please stop blind-sharing these self-absorbed phoneys), where the message was ‘be happy’ – genius! Of course, we all want to be happy but someone shouting it at you will usually have the opposite effect. Most of the stuff these self-styled ‘experts’ churn out is like Usain Bolt’s coach telling him to run faster.

The reality is that over the longer-term, people motivate themselves and it’s our job as managers to create an environment for them to do so. How?

1.   Take care of the hygiene factors i.e. remove obvious demotivating factors from the environment. If employees know that others are doing the same job as they are, but getting more money, they are justifiably pissed off. If they have a two-hour round-trip to the office just so you can watch them work, you lessen their commitment, and their respect for you. Be flexible and help them to spend more time working in their unique ability.

2.   Define success, measure it, and let them get on with it. Some of the annual objectives I have seen senior managers set are laughable and amount to no more than a task list (I remember ‘attend training’ was one). Objectives are numbers that relate directly to successful outcomes, that your business can measure and report on. Ever had a KPI that when you get to appraisal time you both realise has not been recorded because the business just cannot collect that data? 

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Topics: Business

Product Development

Posted by Andrew Dickinson on 30-Sep-2019 10:43:55

On average, Jola launches two new products every month. It’s true that some of these are product extensions, but they are all projects requiring a plan, specification, funding, coding, collateral and training.

This is how I think we do it.

1.    Agile, agile, agile. We re-evaluate and re-prioritise every week in a two-hour meeting that includes all the senior stakeholders. We consider every project, regardless of where it is in the process, and we add placeholders for ideas that are either embryonic or ahead of their time. As market conditions and customer needs change, we accelerate, slow down, hold and re-prioritise. We are ruthless, we kill, and park ideas and we don’t invest in marginal vanity projects. We own our own software development resource so we can stop/start projects, and we don’t produce exhaustively detailed specifications.

2.    Fill the hopper. Product development cannot be a serial process. So many companies bet the farm on a new product and when conditions change, that should question the original business case, they soldier on regardless – because there is no Plan B. At Jola we have run out of letters for plans. As I write there are 29 products in the development process, 15 with ‘Go’ status. We do not limit the number of projects going into the hopper, and if we have too many projects with equal priority, we get more resource.

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Topics: Business

Hiring sales people – five tips for a successful recruitment strategy

Posted by Andrew Dickinson on 30-Sep-2019 10:41:04

Salespeople are like hotels in Monopoly. Buy as many as you can afford because the more you have, the more income you generate.

Of course, it’s never as straightforward as that. Under-performing sales people are a drain on management time and your biggest mistakes won’t even pay for themselves, let alone make a positive contribution to gross margin.

This is why you need to be hiring all the time, especially if you are a growing business in a growing market. If you wait until the position comes up in the budget, or you lose someone, you are likely to miss the best people. Moreover, because you’re a little desperate, you are likely to compromise, take a risk, and make a bad hire.

Continuous recruitment requires a strategy. The objective is simple; whenever a person that fits your target profile starts to look around, they must know about, and consider, your company. Achieving this is a little more challenging.

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Topics: Business

Encourage positive stories about your company

Posted by Andrew Dickinson on 30-Sep-2019 10:38:04

I first encountered the concept of corporate stories when I went to school, and then worked, in the USA. Here are two examples.

Nordstrom – these guys love to encourage tales of heroic customer service and this one is my favourite. A man goes to one of their stores and complains his relatively new tyres have worn too quickly. He has lost his receipt but regardless the store agrees to refund him the cost of the tyres. Weeks later he finds the receipt and returns to the store. “I’m so sorry” he says, “I’ve just realised I didn’t originally buy the tyres from Nordstrom”. “I know” says the store assistant, “we don’t sell tyres”.

Dominoes– a store in San Francisco ran a promotion. They would refund your money if for any reason you were dissatisfied with the pizza they delivered. A customer ordered a pizza every few days, ate it, and then claimed a refund. This continued for several weeks until the local Dominoes invited him to come in and prepare his own pizza, exactly the way he wanted it. This he did, ate it, and then asked for his money back. They refunded him, no questions asked (and then quietly withdrew the promotion a week later).

I told the Nordstrom story to my Customer Service Manager at Griffin and challenged him to implement a sustainable process (arguments rage as to whether the Nordstrom example is good or bad in the long run) that would create a positive story . He actually did two things;

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Topics: Business

Q. What’s the biggest waste of time and money in your business?

Posted by Andrew Dickinson on 30-Sep-2019 10:32:26

A. The deals you don’t win.

I’ve been selling IT and telecommunications most of my working life. With an average close rate i.e. qualified prospects:order of around 5:2, you could argue that 60% of this time has been wasted. Of course, that’s just sales; but who doesn’t want to improve their hit rate?

Here are some thoughts.

Benchmarking. AKA using a competitor’s price to drive down the price of the incumbent, but with no real appetite to change supplier. The prospect won’t say they are benchmarking because you will either decline to bid, or put in a below-cost price just to screw with your competitor. Regardless of what you are told, when you are bidding to replace an existing service, its usually benchmarking. Whatever problems the prospect tells you they have with their current supplier, moving away usually involves cost, disruption and risk. Don’t attribute a high percentage to these tenders, or if you think they may be genuine, try and verify this by networking in the account. If you are selling through channel find out if the reseller has an existing relationship with the end user, and what their average hit rate is.

Networking. With social media platforms like LinkedIn it has never been easier to network in target accounts. Keep digging around until you find someone you know, or at least someone who knows someone you know. Your objectives are to confirm the veracity of the enquiry, get the inside line on the real problems you need to solve, and to find people who can influence the decision in your favour. I know I shouldn’t have to say this, but it still happens to me so…Do not immediately IM contacts that accept your invitation to connect, with a pitch. Imagine you are trying to entice a squirrel to come over and eat out of your hand. If you go charging towards them brandishing your nuts, they will run up the nearest tree, and you’re an ex-connection.

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Topics: Business

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