Distributors lag when it comes to follow-up or reinforcement training, and they woefully lack in negotiation training, even though a major part of a buyer’s role is negotiating with vendors. This article, based on the results of a recent Real Results Marketing survey, further examines the challenges distributors face around providing training.
This article is part three in our ongoing series on training in distribution. Part one looked at how distributors can shift their thinking about training, and part two examined the challenges distributors face around providing training.
The majority of training provided by distribution companies today is product and systems oriented. While critical, it may not be enough. For companies that are investing in sales and other soft skills training for their salespeople, the majority do not have consistent follow-up or reinforcement training, which makes the training less effective overall.
When CEOs and vice presidents of sales were asked how important negotiation training was for their sales employees, they responded with a resounding “very important.” Yet the results of a recent Real Results Marketing survey highlighted a gap between the perception of importance and the training that was actually provided.
Minding the negotiation training gap
When asked “How often have the individuals in the following roles had negotiation training over the past three years?” at least half of respondents said “never” for most roles. The exception was field sales. (See Figure 1.)
For the distributors surveyed, more than half of field salespeople received some negotiation training. But even for field sales, more than one-third (37 percent) of respondents said they never provide negotiation training and 18 percent only provide it once.
This gap is problematic because field sales is not the only position involved with negotiation. A major part of a buyer’s role is negotiating with vendors, and inside salespeople are actively setting pricing and service terms with customers.
We then asked “How likely are you to spend training budget on negotiation training for the following roles?” Survey respondents were very interested in supplying negotiation training for their salespeople. Eighty-three percent of respondents said they would be very likely or somewhat likely to spend training budget for field salespeople, while 72 percent would spend budget for buyers and 64 percent would do so for inside sales. (See Figure 2.)
So, why the gap between the perceived importance of negotiation training and what is actually occurring? We asked a few C-level individuals, who told us that there is only so much time for training employees within the company.
In distribution, there are so many products, variations and applications, that product training usually takes priority. Systems are changing, websites are being updated and new tools are being introduced at a much faster pace than in the past. This limits the amount of time available to be spent on “soft” skills training such as negotiation.
Sales employees are also starting to push back on the amount of their time spent in training versus performing their job duties. Because many distribution companies base compensation on actual results, the culture of the company develops into one focused on the daily, direct results job tasks. Without incentives and accountability to pursue additional training, employees will default to their daily tasks. (Read more in part two of this series.)
Training tools and techniques
The tools that are made available to salespeople may also be creating a challenge for ongoing training. On our survey we asked: “What types of tools do you use to enable your employees to negotiate effectively?”
The survey results show that the tools are largely historically based, contained in the form of data in an ERP or CRM system and related mostly to setting price. (See Figure 3.)
But where does value come into the equation? How much in extra services are distributors giving their customers but not receiving anything back for? When a customer wants a better price, what do salespeople typically do? Do they default to discounting or offer rebates?
Without effective negotiation techniques, most salespeople do not truly understand value and are not equipped to handle effective price negotiations.
What makes for a good negotiation training program? It should include many of the same components of any good training program: great content, role plays, retention programs and follow-up skills training. Use data to show how this type of training will help them improve in their own day-to-day tasks.
Just like any other training, negotiation training must be practiced and used consistently to be effective. These skill sets must become a standard part of all sales employees’ repertoires. This will not only increase profitability for the company overall, but will lead to happier employees and better retention.
In order for any training program to be effective, it has to become a part of the company’s culture from top to bottom. Management has to make it a priority, and it must build incentives and accountability into the program.