How can you use yield management principles to negotiate deals and contracts?

2 Segment your customers and prospects

Another important element of yield management is segmenting your customers and prospects based on their value, behavior, and needs. You can use criteria such as industry, size, location, revenue, growth potential, loyalty, satisfaction, referrals, and purchase frequency to segment your market. This will help you tailor your sales approach, your messaging, and your offer to each segment. You can also use segmentation to prioritize your sales activities, focus on the most profitable and loyal segments, and allocate your resources accordingly. Segmentation will also help you create different packages, bundles, and discounts for different segments, based on their value and demand.

3 Adjust your pricing and terms

Once you have segmented your market and understood your value proposition, you can use yield management to adjust your pricing and terms based on the demand and supply of your product or service. You can use dynamic pricing, which means changing your prices according to the market conditions, the customer behavior, and the availability of your inventory. For example, you can charge higher prices when demand is high, when your inventory is low, when your product is new or exclusive, or when your customer has an urgent or specific need. You can also charge lower prices when demand is low, when your inventory is high, when your product is old or common, or when your customer has a flexible or general need. You can also use price discrimination, which means charging different prices to different segments or customers, based on their willingness to pay, their value, their loyalty, or their behavior. For example, you can offer discounts or incentives to customers who buy in bulk, who buy in advance, who renew or upgrade their contracts, or who refer other customers.

4 Negotiate with confidence and flexibility

The final step of applying yield management to your sales career is negotiating with confidence and flexibility. You need to communicate your value proposition clearly and convincingly, and show how your offer meets or exceeds your customer's expectations and needs. You also need to anticipate and overcome your customer's objections, and handle their questions and concerns. You need to be confident in your pricing and terms, and avoid giving away too much value or leaving money on the table. However, you also need to be flexible and willing to adjust your offer based on the feedback and signals from your customer. You need to find a win-win solution that maximizes your revenue and margin, while also satisfying your customer and building a long-term relationship.

By using yield management principles, you can optimize your sales performance and outcomes, and negotiate better deals and contracts with your customers. You can also increase your customer satisfaction, loyalty, and retention, and create more value for your business and your customers.