CA Technologies' global software sales team operates in a highly
competitive marketplace with complex processes and a tremendous
amount of price pressure. In the past, the lack of a standardized
negotiation model hobbled financial growth and prohibited the sales
management team from coaching and reinforcing effective
negotiations tactics across geographies.
To meet the needs of the organization's negotiating community, the
employee education department teamed up with global sales
stakeholders to analyze the competencies of successful negotiators
on its account teams and document the gaps in behavior that were
affecting progress. Based on the cumulative results of this
research, a comprehensive and continuous performance program was
created to assist the company's negotiators in supporting the
business objectives outlined by its leadership team.
The power of negotiation
When CA Technologies changed its global sales coverage model to
enable sales teams to build better customer relationships and
create long-term business partnerships, it used negotiating power
to leverage better deals for both the customer and the
organization. Negotiation aptitude was identified by sales leaders
as a bottom-line skill set that could make the difference between
hitting or missing the organization's revenue and profit goals.
The enterprise software marketplace is perpetually evolving to a
more competitive state, so the lack of an organizationally
sponsored negotiation strategy had inhibited sales teams from
leveraging standardized, best-in-breed negotiations practices.
Although cultural variations exist in negotiation tactics,
utilization of a set of core negotiating principles is necessary to
balance and standardize the way that sales teams work together to
negotiate with customers.
The overall program goal is to enhance negotiation performance by
providing learners with offerings that mapped to their specific
needs and constraints, preferred learning methods, corporate
culture, and executive sponsorship and commitment. Directly aligned
and designed to support the financial goals of the organization,
the negotiations program has helped sales teams close more
profitable deals. In 2009, the organization met or exceeded its
annual outlook for revenue, bookings, EPS, and cash flow from
operations as a result of this success.
A month-long needs analysis discovery process was conducted at all
levels of the global sales organization to both analyze the
competencies of successful negotiators on its accounts team and
document the gaps in behavior needed to meet organizational
requirements. Through a series of interviews and focus groups,
these assessments conveyed that the global sales organization faced
numerous negotiation challenges:
- Managing customers aligned to buying timeframes that did not
benefit the organization
- Dealing with customers who use non-response as a negotiation
tactic
- Overcoming how the media has shaped customer perceptions of the
organization
- Responding to customers trained by the industry to expect high
end-of quarter discounts
- Handling customers who constantly aim for a lower price
(addressing objections that come from industry whitepaper reports).
This needs analysis process also revealed that several common
missteps were made by sales teams during the negotiations process,
regardless of international location:
- Getting stuck in the price-playing field
- Agreeing to customer demands without fully understanding the
impact to the organization
- Not calling high enough or wide enough in the customer's
organization
- Not understanding the customer's buying process
- Growing complacent with current customer relationships
- Not bringing the legal team or customer portfolio managers into
the process early enough.
Thorough study of the needs analysis exercise led the employee
education team to conclude that instruction was an appropriate and
cost-effective vehicle to support the organization in its
negotiation performance improvement initiative. The team
consistently works from the premise that instruction should only be
used when performance problems stem from a deficiency in knowledge,
skills, and attitudes, rather than external factors such as process
inefficiencies, lack of motivation, or lack of incentive. Prior to
program design, a learning charter was created and signed by global
sales sponsors within the organization to ensure alignment to
business needs. It included
- business objectives and measurements
- learning objectives and measurement strategies
- risks, assumptions, and potential constraints
- resource and sales sponsorship requirements.
The negotiations learning initiative equipped global sales
professionals with the capabilities necessary to deliver improved
financial performance as they worked with customers to execute the
organization's "go to market" strategies. To accomplish these
goals, the program armed sales teams with the ability to:
- negotiate all aspects of a deal throughout the opportunity life
cycle
- use skill and creativity to turn customer 'wants' into needs
- enhance the profitability of each customer relationship
- better negotiate mutually beneficial agreements
- differentiate both themselves and the organization from
competitors.
These negotiations workshops were then followed by a web-based,
instructor-led workshop for sales management so leaders could coach
their teams around the specific skills that they learned in those
sessions. The idea was to motivate managers to reinforce effective
negotiation practices with their sales teams, provide coaches with
proven guidelines for effective coaching, boost sales team
performance; and show managers how to use a Negotiation Planner as
an on-the-job coaching aid.
Program success
Overall, alignment to business needs and sponsorship from business
leaders has been paramount to the program's success and has driven
every aspect of the program's execution. To create this program,
the employee education team used its own best-of-breed
instructional design process based on a combination of phases from
the ADDIE model (analysis, design, develop, implement, evaluate),
an iterative development model, and the learning theories of
learning experts Robert Gagne, Robert Merrill, Ruth Colvin Clark,
and Howard Gardner.
This practice is now in maintenance mode, and has been expanded to
include CA Technologies Services organization. Sessions continue to
be offered upon request from global sales and services teams. As
new learners participate in the negotiations program over the next
several years, the employee education team will continue to measure
and monitor the impact this program has worldwide. Due to the
program's success and because of further demand from field sales
teams, a new 200 level negotiations program was developed and
piloted to the field in February 2010. The employee education team
will continue to monitor the program against the business metrics
set forth by the executive vice president of global sales and
marketing.
The practice has been implemented through more than 75 offerings in
Europe, Africa, North America, South America, and Asia. Many of
these offerings were localized to give sales teams the opportunity
to learn and practice their new negotiation skills in their native
language. More than 800 employees (5.5 percent of the overall
corporate population) took advantage of this program. The targeted
employees included account directors, account managers customer
portfolio managers, and sales directors (managers of account
directors/managers).
The cost incurred as of June 2011 is $1.45 million (USD), and it is
expected that another $250,000 (USD) will be spent in future
investments.