Tuesday, November 21, 2017

Thanks for Nothing

I’ll never forget the Thanksgiving week when I almost saved $9 million.

It was the Tuesday before Thanksgiving, 15 years ago, and I was negotiating with a software company for a license to one of their products. The price on the table was $18 million.

The salesperson called me and said, “If you sign before Thanksgiving, I’ll cut the price by 50%.”

Wow! What a deal! You’d think I’d have gone back to my chief operating officer and said, “My brilliant negotiation skills saved you $9 million! We just have to sign the contract tomorrow!”

I did not. I told the COO we would not take the offer. The contract was not ready and I would have had to call in all kinds of favors internally to make the deal happen in 24 hours during a holiday week. Instead, I told the COO: “The sun will rise and the sun will set on Thanksgiving and we’ll still pay $9 million next week. That is, if we want to do the deal.”

The salesperson was furious when he found out I wouldn’t sign right away. “You should be thanking me for saving you so much money!” he yelled.

“Thank you?” I said. “You just showed me how much you were overcharging me! And you revealed that when you said this was your ‘best price’ you were not being truthful. Thanks for nothing.”

In the end, we did not sign the deal. As a result of the salesperson’s behavior we reevaluated our needs and decided to go with another product.

It was a rookie mistake on the part of the salesperson. Offering a drastic discount does not motivate a client. It raises suspicion. A client starts to ask, “How many other deals have we done where I didn’t get that discount? How long have I been overpaying this vendor?”

The salesperson was clearly trying to meet some internal sales deadline. He must have thought a fading opportunity strategy was the best path to influence. His error was acting in self-interest. His goal was not to give, but to get. And nothing will destroy trust faster than a party’s self-interest. To paraphrase the great English sales strategist, Bill Shakespeare: self-interest is the green-eyed monster that mocks the relationship that both parties should seek to build.