‘Overly dis­count­ing can im­pact the per­ceived value of what you’re sell­ing’

Tony Hughes

Yorkshire Post - Business - - FRONT PAGE -

These days ad­min­is­tra­tions and profit warn­ings have be­come a com­mon fix­ture in the global me­dia. Once-boom­ing high­street busi­nesses such as Toy R Us and Pound­world have col­lapsed, while other house­hold names such as New Look and Mother­care strug­gle to make a profit.

When thou­sands of jobs are in jeop­ardy, the nat­u­ral ques­tion on ev­ery­one’s lips is, what can be done, if any­thing, to save our high streets?

It’s nat­u­ral for in­vestors and share­hold­ers to want fast an­swers – and this of­ten re­sults in a knee­jerk re­ac­tion to fo­cus on cost cut­ting, re­dun­dan­cies and short­term sales as pre­ferred go-to so­lu­tions.

While a fast turn­around is de­sir­able, it’s vi­tal that re­tail­ers con­sider other op­por­tu­ni­ties that can sta­bilise cash flow and im­prove their prof­itabil­ity. One such area – al­beit of­ten over­looked – is strate­gic ne­go­ti­a­tion.

Why is ne­go­ti­a­tion so key for re­tail­ers?

An or­gan­i­sa­tion-wide ne­go­ti­a­tion strat­egy, if de­liv­ered prop­erly, can very quickly im­prove cash flow, re­duce over­heads and ul­ti­mately soften ex­penses to pro­tect profit, for even the most trou­bled of com­pa­nies.

Not only that, but an ef­fec­tive ne­go­ti­a­tion strat­egy can help a busi­ness fight to see an­other day.

Huth­waite re­cently con­ducted re­search with YouGov into the im­pact of an ef­fec­tive nega­tion strat­egy, which re­vealed that six out of ten of the most ef­fec­tive mar­gin-max­imis­ing busi­ness strate­gies – such as rent, sup­plier con­tracts or pro­cure­ment – re­quire ef­fec­tive ne­go­ti­a­tion skills.

Put sim­ply, it is not enough to fo­cus on in­no­va­tion, sales and growth strate­gies alone. Busi­nesses must also work hard to en­sure that ev­ery pound re­ally does count.

Should re­tail­ers have learned les­sons from their peers’ fail­ings?

The prob­lem with much of the high street at present is an in­ef­fec­tive strate­gic ap­proach, teamed with a chang­ing and tur­bu­lent mar­ket. Shops now sell a great pro­por­tion on­line, mak­ing the high street more of an at­trac­tion or ex­pe­ri­ence than a per­ceived ne­ces­sity.

Add to this un­cer­tain eco­nomic cli­mates and the afore­men­tioned knee-jerk re­ac­tions to cut costs and in the wrong places and place a fo­cus on short term sales, such as dis­counts and flash sales and you start to en­ter murky wa­ters.

The is­sue with these rather pub­lic so­lu­tions is that they can be judged, viewed and crit­i­cised by the gen­eral con­sumer, stake­hold­ers and in­vestors alike. This in it­self can im­pact on sales.

Overly dis­count­ing can im­pact the per­ceived value of what you’re sell­ing, mak­ing the change to stan­dard pric­ing al­most im­pos­si­ble, whilst staff re­dun­dan­cies cause ner­vous­ness amongst in­vestors and staff alike.

We’ve seen this hap­pen time and time again, once the shaky sen­ti­ment can be felt by in­vestors and con­sumers, a down­ward spi­ral of­ten en­sues.

Can the Bri­tish high street be saved?

If busi­nesses fail to em­brace the ben­e­fits ef­fec­tive ne­go­ti­a­tion can of­fer, the like­li­hood of re­vers­ing the ef­fects of the high street are bleak.

By in­tro­duc­ing an ef­fec­tive sys­tem­atic ne­go­ti­a­tion strat­egy, busi­nesses can save huge amounts of cap­i­tal, not to men­tion im­prove mar­gin.

Huth­waite’s re­search shows that busi­nesses with a sys­tem­atic ap­proach to sales and ne­go­ti­a­tion ex­pe­ri­ence 42.7 per cent greater growth to the bot­tom line than those with­out.

This fact alone high­lights the im­por­tance of ap­ply­ing ef­fec­tive ne­go­ti­a­tion tech­niques to drive prof­itabil­ity across an or­gan­i­sa­tion. In times of trou­ble, this is es­sen­tial.

Huth­waite In­ter­na­tional is a lead­ing global provider of sales, ne­go­ti­a­tion and com­mu­ni­ca­tion skills de­vel­op­ment. It sup­ports com­pa­nies around the world with be­havioural method­olo­gies which are re­search-based and mea­sur­able.

For more in­for­ma­tion, visit www.huth­waite

in­ter­na­tional.com

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