How do you measure negotiation coaching ROI?

Below is a case study that explains how we were able to achieve a combined 466% ROI on negotiation improvement initiatives across five Fortune 1000 clients.

There are many sales skills that have an impact on the value of a strong sales organization for an organization:

• Account Management
• Value Selling
• Questioning
• Presentation

However, one of the things we love most about our work in helping B2B sales organizations improve negotiation skills is the immediate, tangible return on investment.

Unlike many sales skills, negotiation is a hard skill, meaning not only is it highly measurable, but it also delivers business results fast! The other great news is that the CloseStrong team and the client stakeholders can identify potential ROI before any investment is made to build the internal business case for a negotiation improvement initiative.

In working with five Fortune 1000 clients on negotiation skills these companies saw a 466% average ROI within a 9-month average payback period.

How is this possible?

When we talk about negotiation improvement programs, we think in terms of leading and lagging indicators. An example would be:

• Their VP of Sales had a goal of increased revenue, margin, and decreased DSO (lagging indicators).
• Working with their cross-functional team, we identified the top four deal components in negotiation to include more or less of, which included:

• increase price %
• longer contract length
• shorter payment terms, and
• inclusion of consulting services (leading indicators).
• Current and desired targets were identified for each, and expectations were laid out for the salespeople.
• Sales teams were trained on a strategic negotiation process that included how to improve their deal overall and, specifically, how to include more of the top four deal components.
• We coached teams from planning through to close.
• We measured the percentage of contracts and the top four deal components (and others) before and after the investment.

This work resulted in:

• Improved A/R compliance = 1.3%
• Reduced past due balance = 5.1%
• Revenue Gained = $7,151,913.71
• ROI = 510%

The focus on specific leading indicators, meaning those items that were under the direct control of the sales teams during the negotiation, were the items that drove the outstanding end results.

Additionally, moving from generic negotiation training (negotiation skills process) to teaching the teams how to execute a company-specific negotiation strategy, that is, alignment on what leading and lagging metrics we want more of or less of in deals, was the key.

Want to see the case studies or learn more about the CloseStrong methodology? Get in touch today.