Copyright © 2006 Thomson Delmar Learning All Rights Reserved Selling Hospitality Chapter 12 Phase Two—Negotiation Process Strategy: Step Five: Gaining Commitment

Copyright © 2006 Thomson Delmar Learning All Rights Reserved The Buying/Selling Process The Pre-Negotiation Process Phase 1—Pre-Negotiation Strategy –Understanding Negotiations –Prospecting –Pre-call Preparation Phase 2—Negotiation Process Strategy –Approaching the Buyer (Chapter 8) –Investigating Needs (Chapter 9) –Demonstrating Capability (Chapter 10) –Negotiating Concerns (Chapter 11) –Gaining Commitment (Chapter 12)

Copyright © 2006 Thomson Delmar Learning All Rights Reserved The Need for the Close A sales manager is doomed to disappointment if he or she depends on the customer to take the initiative and sign the order.

Copyright © 2006 Thomson Delmar Learning All Rights Reserved Why Gaining Commitment Can Be Difficult Buyer –fear of failure –busy or preoccupied Salesperson –fear of rejection

Copyright © 2006 Thomson Delmar Learning All Rights Reserved Increasing Chances of Gaining Commitment Focus on the prospect’s dominant buying motive — prospect’s hot button. Negotiate the toughest points — if your product/service has a weak point, make sure that it surfaces BEFORE attempting to gain commitment. Avoid surprises at the gaining commitment step — salespeople should ensure that potentially surprising information is not revealed to the prospect at the last step. Display self-confidence at the gaining commitment step. Ask the prospect to purchase more than once — statistics have shown (a) 50% of all salespeople asked for the purchase once, (b) 20% asked twice, and (c) the most productive salespeople asked three times or more. Recognize clues that invite moving to gaining commitment — these clues are often referred to as buying signals.

Copyright © 2006 Thomson Delmar Learning All Rights Reserved

Copyright © 2006 Thomson Delmar Learning All Rights Reserved Getting Past No Does a salesperson obnoxiously ask a prospect five times in a row to purchase? No. After a first no, the salesperson questions further and engages the prospect in more discussion and asks for the purchase at an appropriate moment. In many cases, the salesperson finds a reason to break off the negotiation session and return at a later time when the situation has cooled and/or the salesperson has more information. So, do not give up after one No !

Copyright © 2006 Thomson Delmar Learning All Rights Reserved Buying Signals These clues are of two types: Verbal clues come in several forms: –“How soon can we get delivery?” –“I have always wanted to hold a meeting in a Five-Star property like this.” –“We will need to have all our audiovisual equipment shipped in two weeks before our meeting dates. Is that a problem?” Nonverbal clues

Copyright © 2006 Thomson Delmar Learning All Rights Reserved Nonverbal Clues Re-examining the product or banquet event order (BEO) Picking up a pencil and starting to figure Leaving the room to talk to someone else about the presentation Subtle indications of interest, such as nodding one’s head up and down, rubbing and holding one’s chin, leaning forward in one’s chair with a friendly facial expression

Copyright © 2006 Thomson Delmar Learning All Rights Reserved When to Close? Prospect: Your costs are $1,000 greater than the competition. Seller: Yes, but when you consider that our unit lasts 50 percent longer, our higher costs works out to your advantage Prospect: Yeah, I guess you are right.

Copyright © 2006 Thomson Delmar Learning All Rights Reserved Closing Methods Trial (or minor) close –Summary-of-the-Benefits Close –Assumption Close “Shall I indicate master billing on the letter of agreement?” “Should we deliver Monday or Tuesday of next week?” –Special-Concession Close Offer the buyer something extra for acting immediately. “As an added bonus, we can host (provide as complimentary— comp ) your group’s reception party on the night of arrival.” –Single-Problem Close “Mr. Prospect, it seems that you like all the benefits that we have discussed except this one. Is that right? If I could take care of this, would you sign the letter of agreement?”

Copyright © 2006 Thomson Delmar Learning All Rights Reserved Direct Appeal Close “Can I send you a letter of agreement?” “Would you prefer that I send you a letter of agreement by or by overnight mail?”

Copyright © 2006 Thomson Delmar Learning All Rights Reserved Letter of Agreement Names of both contracting organizations Official dates Meeting attendee arrival and departure patterns Warranty of authority Number and kinds of sleeping rooms Room rates What is complimentary Meeting/exhibit/banquet rooms – Setup styles Meeting/exhibit/banquet room rates; audiovisual equipment Union regulations Food and beverage functions

Copyright © 2006 Thomson Delmar Learning All Rights Reserved Financial Items in Letter of Agreement Master and individual accounts ( folios ) and credit procedures Method of payment miscellaneous charges

Copyright © 2006 Thomson Delmar Learning All Rights Reserved Legal Items in Letter of Agreement Nonperformance clauses –termination/cancellation –penalty clauses –insurance and indemnification Legal jurisdiction and/or arbitration clauses