Is it wise to allow my salespeople to negotiate or should I just do it myself to protect profitability? - Marty, San Pablo City
 
It's a dilemma indeed for both business owners and professional managers.
 
Let's view, analyze and answer this using several angles: sales/account management, people management, self management and business bottom line.
 
The sales/account management angle. Beyond the correctly designed, mission-aligned sales compensation, which is not to be underemphasized knowing that what gets rewarded gets done, a salesperson's account ownership and his/her latitude for action that brings in the business, ushers in the feeling of accomplishment, that leads to job satisfaction, added confidence and ultimately, higher performance levels. However, this latitude is double-edged, as it is both motivating and dangerous. Let me share with you why.
 
In the decades of observing, engaging in, injecting science and conducting professional negotiations training for sellers, buyers and interorganization collaborators, I have come to realize how shallow the regular understanding of the untrained/undertrained salesperson is of negotiation. Often, bargaining and negotiation are mistaken to be synonymous, without realizing that one dangerously yet avoidably precipitates deadlocks, while the other creates value and reaches significantly closer to a deal.
 
I have also observed that the sales preparation for negotiation is either nonexistent or is just a checklist of company wants. How about what the other side wants and the permutations of scenarios these could lead to? Some manage to prepare opening salvos but anticipate to arrive at their closing expectations without a strategic road map, tactical navigation and the appropriate negotiation language skills to get there! No wonder professional buyers love to eat this kind of salespeople for breakfast... because after having their profits chewed away, they still bow in gratitude for the 'granted' sales!
 
On the other hand, remove this latitude and the company either ends up without a sale or the head honcho will have to do the deals him/herself, assuming of course that he/she is highly competent in negotiation. If not, the buyers will feast more feverishly at the sight of an even bigger fish to fry, given the boss's wider latitude to grant concessions compared to the usual limited authority of the average salesperson!
 
The people management perspective. Empowerment naturally comes with accountability. But competence in the skill is required, to be realistically expected to deliver desired results. Needless to say, competence build-up and the provision of required tools should precede task delegation, to ensure a high level of success probability. Considering the fact that negotiation is a critical component in securing deals, particularly when the guns of mere persuasion fall short of their marks, then does it not logically follow that salespeople should be heavily trained and equipped to negotiate?
 
The self-management perspective. The boss should ask himself/herself how many deals at any given time and place there are. Can he/she be simultaneously involved in all these and still perform his/her other vital functions? If the answer is yes then perhaps the boss can even consider handling all if not a handful as his own accounts. If the answer is no, then clearly, the boss needs to multiply himself through others.
 
The business bottom line view. Negotiation impacts profitability and not just revenue-generation. Obviously this is too important to leave to an amateur, regardless of position: salesperson or boss.

The Conclusion: Given the top line and bottom line impact of sales negotiation, choosing to delegate or not this function should be a matter of sales/account management design, that requires the adequate training and equipping of whoever will be empowered to perform the said function, regardless of who shall be deemed best in the organization. It presupposes as well the need to align compensation with whatever configuration will be arrived at. Then you have a competent and motivated handler of this critical function.

 


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