What Will You Do After You Get Punched in the Mouth?

The Deal Whisperer posted its 50th article in September, all based on my ongoing experiences leading sales teams in pursuit of outsourcing, BPO, SI and consulting engagements. My goal is to help business people drive greater value and stronger relationships in their deal-making. For the next 10 weeks I am offering a retrospective, posting the 10 "Most Widely Read" pieces from the last several years. Here is "What Will You Do After You Get Punched in the Mouth?". As always, your questions and comments are welcome and appreciated.

What Will You Do After You Get Punched in the Mouth?

"Everybody has a plan 'til they get punched in the mouth." Mike Tyson

Hard to believe a Mike Tyson quote would have relevance to a discussion of negotiation. Yet we often have moments in negotiations when we get "punched" or hit by a sudden act of the other party and we don't know what to do. All the planning and strategy goes out of our heads and we reel about, trying to figure out how to respond.

When we look back on the events that occurred, though, we discover that they should not have come as a shock; we just weren’t ready for it when it happened. Think of it in Mike Tyson’s context: shouldn’t a boxer have a plan that includes getting hit in the mouth? It is likely to happen! So when you prepare for your own meetings and negotiations, make a plan that includes what you will do after you get punched in the mouth.

A Deal Whisperer thinks of this as planning for surprises. Sounds counter-intuitive because a surprise, by its nature, is something we can’t plan for. With a few exceptions, however, there are not a lot of things that happen in negotiations that are real “surprises.” Walking into your house and having 50 people yell “Happy Birthday” is a surprise. You don’t usually expect to find 50 people in your house when you come home. You should expect in the course of trying to close a deal that the other party might say, “I’m withdrawing”; “Your price is too high”; “Your offer is too low”; or “I chose another supplier”.

So how do you plan for surprises? Walk through the “what if”s. After a milestone in your negotiation, take time to consider all the possible ways the other party might respond and what you will do next. If you just submitted a bid, the customer could 1. Reject the bid, 2. Offer a counter-proposal, 3. Not respond, 4. Accept the bid. There are variations on those possibilities but those are, in essence, the broad categories of outcomes to consider.

Make a plan for each. Write the plan down. And then discuss that plan with your team so everyone knows what the next steps will be. To become a Deal Whisperer, you always have to be so well prepared that a punch in the mouth is part of your plan.

The 'Five Hows' of Sales

The Deal Whisperer posted its 50^th article in September, all based on my ongoing experiences leading sales teams in pursuit of outsourcing, BPO, SI and consulting engagements. My goal is to help business people drive greater value and stronger relationships in their deal-making. For the next 10 weeks I am offering a retrospective, posting the 10 "Most Widely Read" pieces from the last several years. Here is "The 'Five Hows' of Sales". As always, your questions and comments are welcome and appreciated.

The 'Five Hows' of Sales

“Mr. Gitou, my team worked really hard on this proposal,” said Verdi. “It was a huge disappointment when the client chose our competitor. But our team did really well going from last place to second. Do you really think we could have known we were going to lose before we made our proposal?”

“Yes, Verdi, I do,” Tyler Gitou said. “As I mentioned last time, being told you finished in second is meaningless if in the end you don’t get any business. Second place is last.”

http://dealwhisperers.blogspot.com/2012/01/no-prize-for-second-in-sales.html

“I get it,” Verdi said. “So help me understand how I predict in advance the outcome of a selection process involving multiple bidders, multiple decision makers and millions of dollars at stake.”

“It requires detailed analysis, Verdi. But a great way to start that analysis is by asking the ‘Five Hows’. If you don’t know the answers to the ‘Five Hows’ it is not likely you will make a sale.”

Verdi pulled out a pad and a pen. “OK, Deal Whisperer, let’s hear the ‘Five Hows’.”

Tyler laughed. “I appreciate your enthusiasm, Verdi. The ‘Five Hows’ are:
1. How does the client buy?
2. How does the client decide?
3. How else can the client achieve its goals?
4. How can we compete?
5. How can we win?

“Let’s start with the first,” Tyler said. “‘How does the client buy?’ This is a question about the buying and contracting process. Who runs that process? Is it procurement? Do individual executives have the authority to buy directly? Do those individuals have limitations on the sizes of deals they can commit to? These are all important questions because if you do not understand the process, you don’t know the rules of the game.”

Verdi nodded. “That seems pretty logical.”

Tyler continued. “The second is ‘How does the client decide?’ While this is another process question, it is focused on the client’s internal process as to how selection decisions are made. For example, does the client have a culture of consensus? If so, you need to understand who those decision makers are, their relationships and how that consensus decision gets made. If the client has a more entrepreneurial or hierarchical environment, key executives may be the final decision makers without the use of advisory committees. Also, it is important to know whether board approvals are required. You don’t want to hit the end of your sales quarter and discover the board meets in two weeks to approve your deal.”

“Oh, I have lived that nightmare before,” Verdi said.

“The third is ‘How else can the client achieve its goals?’ This is a BATNA question: what alternatives does the client have to signing a contract with you? Can they perform the work you are pitching on their own? Or can a competitor do it just as well as you? This can be a vital question if your solution is unique in its ability to achieve the client’s goals. If the client does not have a strong BATNA, that should influence your negotiation strategy, particularly around legitimacy.

“The fourth is ‘How can we compete?’ This question is tied to BATNA and probes how well we understand the client’s interests or ‘buyer values’. It also asks what levers we can pull to make ourselves more competitive. What are the limits for us on price, scope, risk and time? If we need to move one lever, how will it affect the other levers?”

“That’s a great question,” Verdi said. “Client’s always pull on the ‘price' lever and we often fail to consider the impacts on scope. We are so focused on ‘winning’ that we make price concessions without seeking some form of relief from the client on another lever.”

“Exactly,” Tyler said. “The last one is ‘How can we win?’ This is a complex question that really pulls in the answers to the other four questions and tests the level and quality of relationships with the client. Let’s talk about your last proposal. You said you started in last place and finished in second. Why do you say you were in last place?”

“We really had no track record with this client,” Verdi said. “We were trying to get a foothold against the incumbents.”

“What you’re really saying is you had no relationships with the decision makers,” Tyler said.

“At first,” Verdi said. “But I developed a great relationship with Larry, the head of procurement. In fact, Larry’s sister went to the same college as me and he’s a huge Jets fan like me, so we had a lot in common.”

Tyler nodded. “Building affiliation with a decision maker or influencer is a great way to start. Did Larry trust you? Did he trust your company?”

“I think he trusted me. I mean, I didn’t give him reason to not trust me. But my company? I don’t know.”

“That’s the point when you needed to ask yourself ‘How can we win?’ Not having relationships, not having trust, not knowing the buying process or decision-making process suggests you were destined to lose the bid. Larry may have liked you, but do you think that was enough for Larry to award you with a $5 million project?”

“I see your point,” Verdi said.

“Lesson learned,” Tyler said. “Unless you can use the ‘Five Hows’ to build an aggressive strategy that is going to result in a realistic chance of being chosen, you may be better served spending your sales pursuit budget on other potential clients.”

“Thanks for the advice,” Verdi said. “I never realized how much analysis I should be doing on my sales opportunities.”

“You’re welcome,” Tyler said. “Being a Deal Whisperer means being outcome driven. It’s important to have goals in closing deals with clients. It’s more important to know in advance how those deals will get done.”

Change Your Attitude!

The Deal Whisperer posted its 50^th article last month, all based on my ongoing experiences leading sales teams in pursuit of outsourcing, BPO, SI and consulting engagements. My goal is to help business people drive greater value and stronger relationships in their deal-making. For the next 10 weeks I will offer a retrospective, posting the 10 "Most Widely Read" pieces from the last several years, beginning with number 10: “Change Your Attitude and You’ll Change Your Relationship.” Your questions and comments are welcome and appreciated.

Change Your Attitude and You'll Change Your Relationship

Want to improve your relationship with a business partner? Try this exercise with your negotiation team:

List five adjectives to describe what it is like to work with the other party. Chances are you will produce a list that includes words such as stubborn, frustrating, confrontational, or one-sided. Then ask the team why, if those words are accurate, they would continue doing business with such a difficult party! Maybe they should focus on building a relationship with someone else.

The truth is that parties in a relationship, whether business or personal, will eventually develop negative perceptions of one another. The problem arises when those perceptions overshadow every interaction with the other party such that we wonder why we are together in the first place.

This is the challenge of “persistent perception”. We reach a point where we perceive another party in such a negative light that no matter what they say or do, we only recognize the negative behavior that is consistent with our perception.

Imagine, for example, you join a team and your colleagues tell you to go meet with Marty. “Good luck,” one says. “Marty is a jerk.” You now have a loaded perception seeking confirmation: when will Marty be a jerk to me? And, despite all of Marty’s efforts to be collaborative and positive, when he makes that one unreasonable request you rejoice internally: “JERK!” You return to your team and share with them Marty’s jerk-like behavior, largely dismissing all of his positive behavior.

Time for a change of attitude.

Put together a list of the adjectives you and your team believe the other party would use to describe working with you. Don’t be surprised if it is not terribly different from the one you created describing the other party. Now make a list of the adjectives you would like the other party to use to describe your relationship. Ask your team what needs to change in how they talk to and work with the other party to achieve those adjectives. If your goal is to get the other party to change their behavior, you must change yours. Model the behavior you desire from others. If your team refuses to change their behavior, how can they expect the other party to change theirs?

Change your attitude and you will change the relationship.