Darryl Rosen

Selling Rufenbrau's Latest and Greatest New Beer

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At 2 PM today you and other executives from your company, Marathon Distributing, have an appointment at the friendly local retailer to introduce Rufenbrau's newest beer: Dos Banana's.  Yes, the new beer tastes like a banana, a concept you're not quite enamored with, but hey, all the Nielsen reports suggest that the American public is clamoring to include beer as a fruit serving.

So what is your strategy?  Despite all the research, the hard truth is that the friendly local retailer could probably care less about a new beer, especially one that would taste good in a yogurt smoothie.  A new product is a pain for a retailer.  Take my word for it. After entering the product in their computer system, they have to find a place to put it.  Another product may be displaced, which will bring it's own host of issues.  Somebody, somewhere is not going to be happy. On top of all that, the new beer won't increase the retailer's sales. It will just switch the consumer to the new product. 

This is why new products are hard to place.  So, how do you handle the meeting?  What is your strategy for getting the new beer placed?  Let's assume that Rufenbrau is very high on their new beer, and although Dos Banana's will only comprise a small percentage of total sales, the company's executives feel that much is riding on the new product.  If you've been nurturing your relationship with the friendly local retailer all along, the meeting today will go very nicely.

Consider the following analogy.  In the Northern suburbs of Chicago is a huge amusement park called Great America.  Let's assume that there are two distinct types of amusement park fans.  The first goes once a year.  On a special Saturday or Sunday, the parents probably load all their children into the minivan and spend the day at the amusement park.  This family pays the daily rate, which is probably pretty steep. The second, a thrill-seeking family, goes once a week for the entire summer.  To accommodate this profile, Great America offers a rate package that allows the family to come and go at their pleasure.

Here is how this applies to your situation.  Your actions towards your customers dictate that you either pay a high price or a reasonable price each time you ask for something. In other words, you're either forced to pay each time you approach your customers with a special request or, if you've paid in advance, each new request will be more readily accepted. 

How do you pay in advance?  How do you lay the groundwork for getting what you want, when you want it? By crossing the finish line with your customers and building, cultivating and maintaining high quality, strong, profitable customer relationships.

But what if you haven't been treating your customers the right way?  What do you do now?  You're probably going to have to pay to pay the piper. Try not to give away the house. The friendly local retailer pretty much has you where they want you at this point. Consider the following simple negotiation tips to minimize the damage.

• Learn more about the retailer (maybe not knowing is what got you in trouble in the first place). Spend at least a few minutes studying the personality, style, and background of the other person.

• Be patient - don't make the first more.  Typically, managers are used to rushing through things.  That's not appropriate in this type of negotiation.

• Set a positive tone to begin with - respect for the other person's experience.  Assure the other person that it is a joint exercise.  You're in this together, both with the goal of selling more product.

• Review the agenda so that everybody knows what is going to be discussed

• Voluntarily express something as a good-faith gesture

• Don't overlook the importance of casual conversation.

• Do not disclose significant details about your situation - always try to let the other side know you have options.

• Try to determine why the other side wants to make a deal, their real interests and business constraints.

• Establish an anchor.  Often the first offer sets the bargaining range.  Start at the right place – don't be greedy - and always be able to articulate why you feel your offer is justified.  For example, don't be greedy and ask for the best shelf placement in the stores, in the cooler, etc.

• Divert the discussion away from unacceptable positions.  The friendly local retailer might sense weakness and ask for the world.  Steer the conversation to some reasonable parameters. 

• Don't make a proposal too quickly 

• Inquire about and genuinely listen to another's interests.

But what if you have nothing to give? 

What if you only have an extra set of tickets or something small that you can give the retailer in exchange for his taking on your new product?  What do you do now?

Admit that you have dropped the ball and that your company hasn't treated them the right way.  Take the blame for being in this situation. This approach, if used in a genuine manner, can be quite effective, but it can only be used once!  I have seen hardened negotiators switch course immediately when they hear someone baring their soul. I'm not saying this will work with great certainty, but as a last resort, it is certainly worth a try. 

Your goal, to refer back to the amusement park example above, is to buy the summer pass.  Practice preventative medicine by treating your customers the right way at every turn.