The average commute time in Southern California is about 30 minutes each way to work and drivers here spend an average of 90 hours a year in traffic delays…ouch! Traffic aps like Waze are de rigueur for making our way around town. We start with our destination and then discover the best route to arrive at our goal.
Closing a deal is a lot like using Waze…we first determine what our final goal is for our negotiations with our customers and then we plan for the best way to arrive at our destination. We do need to be flexible in the negotiating process because, like traffic, there can be incidents along the road that will require us to change our route in mid-trip…or in mid-negotiation.
Let’s think about negotiating in two stages: Establishing the Goal and Reaching the Destination.
1st Stage: Establishing the End Goal
I like to have, in writing, what my goal is for the deal I’m working on…whether it’s a particular revenue number or something qualitative, I find that it is good to have this clearly defined. For example, if I’m working with a customer to finalize a deal, I want to have three different scenarios in mind during the negotiations:
Best Case Scenario
This is the result that would happen if everything goes according to your plan. You and the customer are in agreement with the features of the deal, the expectations of delivering on the deal, and the price of the deal. This scenario doesn’t happen often but when it does, it gives you great flexibility in finding added benefits that you can provide for your customer above and beyond their expectations. It’s a cliché but very true: under-promise and over-deliver.
This scenario is a very good scenario as well. You didn’t achieve your optimum goal but you achieved a result that is not only good for the customer but also good for you and is something that your management can also live with. The vast majority of deals I’ve been involved with fall into this scenario. You may not be able to provide all the “bells and whistles” for your customer but you negotiated a deal that everyone can live with. Well done!
Even though this is sometimes the toughest thing a salesperson or sales manager has to do in a deal, I strongly recommend putting in writing the point where you have to walk away from the deal. You may never get to this point but you need to mentally be prepared to walk if it is not a good deal for you or your company. There could be any number of reasons why the deal isn’t good: you’re not hitting your margins; you’d be setting a bad precedent for future negotiations, etc. It is also very good to be prepared to walk because it gives you an inner confidence during the negotiations because so few salespeople, or sales teams, are prepared to follow through with this. I’ve only had to walk from a deal a handful of times and, in most cases, the customer came back to continue the deal negotiations after a short period of time.
2nd Stage: Progressing, Course Correcting and Reaching the Destination
One of the many great things about Waze is its ability to change the directions during your trip to account for changes in traffic conditions, or accidents, while headed to your destination. When you’re working to close a deal, you also have to be able to change your plans and strategy to account for any new factors now complicating the deal. You may have thought that certain points of the deal were decided but then your customers’ manager(s) might get involved and throw in some new wrinkles. There could be new budget cuts or changes of personnel at your customers company which could potentially derail things. The point is, like Waze, you need to be able to change your course as you move closer to your destination. Great salespeople keep their focus on the goal and are also willing to be flexible on what is needed to achieve the goal.
If you’ve done your job in putting together the deal in such a way that your customer recognizes the value for them, then they will want to work with you in overcoming obstacles to closing the deal. Adaptability and flexibility are the keys to closing more deals and exceeding your revenue goals.