Here Comes Santa Claus...

Yes, it’s that time of year again when boys and girls all over the world anxiously await the arrival of that special person in the suit who will bring them gifts and joy to finish out the year.

No, I am not talking about Saint Nick, the jolly old elf. I’m talking about the company executive who shows up in December to give away discounts to clients to close deals and make sales quotas.

You know, “Help.”

I originally published this column two years ago and, as I thought about what to publish for the end of 2019, this was still the most relevant advice I could think of!

If you haven't experienced it (or have and were not aware), “Help” is a noun, not a verb, as in “here come ‘Help.’” It’s a term used by deal makers when their management decides they need to get involved to “help” push the deal “over the line.”

In fairness, sometimes a deal team can use an objective perspective to close out some nagging issues that the parties can’t seem to resolve. In December, however, Help usually arrives as a result of a gaping hole in the sales forecast that needs to be filled with some fast closings.

When I worked for a software company, where December 31 was the end of the fiscal year, the rumblings about Help would begin soon after Thanksgiving. If I heard that Help was coming to see me, strains of the theme to “Jaws” would start playing in my head: a pounding rhythmic pulse of foreboding.

The client, on the other hand, hears, “Here comes Santa Claus, here comes Santa Claus…” That’s because for the client, Help was an executive with a big bag full of goodies that the executive couldn’t wait to give away. (And then the executive would crow about being the one who closed the deal.)

If all it takes to close deals is giving away money, management should send an ATM into the negotiations instead of an experienced deal maker.

The problem with Help is: not only does the client get a bunch of money in exchange for nothing in return (which trains the client that it can get a bunch of money in exchange for nothing in return), but sometimes Help results in a bad deal.

All deals need time to develop. The more the parties talk, the more they learn about each other’s real underlying interests, challenges and goals for the transaction. Sometimes, as the deal takes on its shape, the parties find out they are misaligned and decide to hold off for a while. When Help forces a deal by throwing money at the client to get a signature, all the ingredients for success may not be mixed in and the engagement may suffer.

When making a cake, for example, one usually mixes everything together and then bakes it for 45 minutes at 350 degrees. You can’t say, “We don’t have 45 minutes! We have to get this done! Let’s fire it up for 10 minutes at 1,000 degrees and we’ll worry about sugar later.” That’s a recipe for a bitter outcome. Given the right amount of attention and time, a good deal will rise and a bad deal should fall. Unless it gets Help.

Flat-Out Stupid

Imagine a multi-billion dollar industry that invests millions to get the best people, establish a respected brand and deliver a product to the highest standards, only to leave delivery and client management in the hands of a 12-year-old on a bike.

I started my career in journalism working for Newsday and The Daily News as a newspaper carrier in Malverne, New York. (Yes, I am one of those dads who tells his kids “I had two newspaper routes, morning and afternoon, and walked 2 miles uphill, both ways, to school! And instant messaging was handing a note to a classmate and hoping the nun didn’t see!” But I digress; and I digress from my digression.)

Later, when I was a newspaper reporter in Albany, I thought about the newspaper business model and I realized: this is just flat-out stupid.

The goal was to increase circulation numbers by getting more customers. Increasing circulation would allow the newspaper to increase advertising rates and generate more revenue. And yet, the newspapers put the least amount of investment possible into the sales organization, which was the primary source of helping to boost revenue: kids delivering the actual product.

The model has changed as newspapers lost readership (due to the Internet and cable news; not newspaper carriers with poor aim) and have switched to professional delivery services and responsive 1-800 numbers if the paper doesn’t show up.

But many companies are still suffering from the same blind spot: they don’t understand that without a well-trained and motivated sales team, their business will never grow to its greatest potential. A company can have terrific product that is easily differentiated from its competition. Without a professional who is skilled in how to sell that product to the target market, however, that product will be an also-ran.

Take a moment and think about your own organization: who is the face of the company to your buyers? How are they trained? How are they motivated? What kind of support do you provide to help them be successful? Sales is the heart: it pumps revenue throughout the body of the company. Without a strong heart, it is difficult to compete and to thrive. Take care of your heart and the life of your company will be that much stronger.

Your Price is Too Low

Sooner or later, you will be talking about price.

Despite all of the effort we put into crafting just the solution the client needs; understanding “what’s keeping them up at night” (which is, by the way, a terrible question to ask a client); and goals the client is trying to achieve, someone is going to ask for a price concession.

Why does that always seem to be a surprise?

Anyone who has received urgent emails or calls from colleagues about the client’s ask for a lower price knows what I am talking about. “How should we respond?” is usually the question. And we discuss some strategies to address the issue.

But in the back of my mind I always wonder: why didn’t you have a plan for this? We all know a request for a price decrease is going to come.

When was the last time the client told you, “Your price is too low”?

Planning a successful sales strategy is all about being ready for the unexpected; it’s a given that we should be ready for the expected.

We Both Want Apples

Sometimes a negotiation needs an agreement to get started.

Not a big agreement. Just something that the parties acknowledge works for both to demonstrate “we can close issues together.”

For example, if you have a bunch of big issues and little issues, agree on the little issues first. It creates a cadence of collaboration and a feeling of accomplishment: “Hey, we agreed on something!”

Generating positive energy is critical to a successful negotiation.

Breaking down big issues into smaller parts is also a great way to solve the bigger issues. In a recent discussion with a colleague who was trying to work through a termination scenario, she said the parties were stuck on how to solve for a key point. They had stalled because each was asking for different outcomes.

“Think of it this way, John,” she said. “They want apples and oranges, and we want lemons and apples.”

I replied, “Well, the good thing is we both want apples. So let’s agree on the apples, and just focus on the oranges and lemons.”

This works especially well when the “big” issue is about money. Years ago, when I was negotiating for a settlement of a dispute, the client said it owed my company $1 million, and my company was seeking $1.3 million. I understood why the client was taking issue with the last $300,000; they weren’t being positional, they just didn’t agree with how we valued our work.

I promised I would share their view with my leadership. “But,” I said, “if you say you owe us $1 million, and we say you owe us $1.3 million, then we both agree you owe us $1 million. So, if you pay the $1 million, my leadership will see that as a great sign of trust and progress toward working out the dispute.”

The client agreed to pay the $1 million, and we were left with a dispute of $300,000, which seemed much more manageable. I was able to present the client’s perspective to my leadership and, because the whole dynamic of the negotiation had changed due to their payment, my company saw the situation in a different light and agreed to reduce the demand so we could sign the settlement.

Many negotiations start with the question, “So which issues will we tackle first, the big rocks or the small rocks?” Starting with the “big rocks,” or toughest issues, will just reinforce the notion that “we don’t agree.” Focus instead on what the parties agree on and create momentum. You will also reduce your issue list, making the rest of the negotiation seem more manageable.

Use Your BATNA to Drive the Deal

I am a car-buying junkie. I am not hooked on cars themselves (though I was a bit of a gearhead in college). I am, however, hooked on the process of buying a car.

One of the primary reasons I am hooked is because car buying is a negotiation process that totally favors the customer, making it a great opportunity to practice my negotiation skills. Many would disagree. Polls show that most people do not like the car buying process. In fact, a recent survey found that 75% of the respondents would handle the entire process online if they could. So how could a sales process, where most of the negotiation power sits with the buyer, be so widely disliked by buyers?

I believe it’s because most people don’t realize how they can change the process and actually make it fun. You just have to use your BATNA to drive the deal.

“BATNA,” which is a concept coined by Roger Fisher and William Ury in the book “Getting to Yes,” is your “Best Alternative to a Negotiated Agreement.” Simply put, it’s what you will do if you can’t reach a deal with someone. For example, suppose you’re sitting in a Ford dealership, and you can’t get the price you want on a new Ford pickup truck. What do you do? You don’t want to give in and pay too much.

One alternative is to go to another Ford dealership, and see if you can get a better price. Another alternative is to go to a Chevy dealership and negotiate for a different model truck. Whichever of those two alternatives works better for you, that is your “best alternative” or your BATNA.

Large companies leverage BATNA all the time. It’s called a request for proposal, or “RFP.” Companies issue the RFP to a dozen vendors and gradually whittle the list down to those alternatives they like best. Often, the company will pick one vendor to negotiate with, and keep a backup vendor as a BATNA. This gives the procurement team leverage to try and get the best deal out of the chosen vendor, because the vendor knows a backup alternative is waiting in the wings.

I actively use the concept of a BATNA when I am buying a car. For example, I needed to get an inexpensive “commuter” car, and decided to go with a lease. I picked three car dealerships, all on the same street, each with competing models of cars which fulfilled my interests.

I walked into each dealership, found a salesperson, and said, “I am leasing a car today. I would like your best price on your base model of X. I am going across the street now, and I will make the same request of that dealer. Whoever gives me the lowest price will get the deal.” Each salesperson looked at me, and then looked over at the competing dealership, and nodded their head, acknowledging my alternative.

A few hours later, I had three bids, and leased the car from the lowest bidder. No long negotiations. No hassle. I just let my BATNA drive the deal.

We Said "No"

Sometimes a client is not making a request, they are posing a test.

We were pursuing a $30 million systems integration deal with a long-standing energy client. The functions we were installing were of the “mission critical” type, and if something went wrong with the implementation, there was a high risk of substantial losses to the client. Trust and collaboration were the primary buyer values.

Having survived round after round of orals presentations, reviews and questions, the client was ready to make their decision. We had delivered what we viewed as a world-class proposal that demonstrated our understanding of the risks, provided mitigation and would achieve the client’s goals.

We were not the cheapest bidder, we were told. And we were not surprised. We were told, however, we had the best solution.

The client was making its final rounds to decide the winner between us and a key competitor. The sourcing lead contacted our sales lead and said, “We love what you’ve proposed. But we need the price reduced by 30 percent. If you do that, the deal is yours.”

There are always three potential answers to a request for a price reduction: yes, no, and an offer of less than what was asked.

We had several internal meetings to decide our answer. Throughout the process, we had committed to the client that we would provide the most competitive price that we could. We knew how important the success of this engagement was for the future of the client’s business, and we didn’t want price to be a distraction. We were focused on the quality of the work, reduction of risk, and achievement of the client’s goals.

When it came time to answer the client’s request for a price reduction, we said “no.”

The reason, we explained, was that all of our discussions had focused on what it would take to succeed. We said to reduce our price by any amount, thereby causing us to cut back on our solution or staffing, would put success at risk.

We won the deal.

Once the project was underway, we had a “win” review with the client to understand what about our proposal led them to choose us over the other service provider. The issue of the price reduction request came up.

The client said “no” was the right answer. Someone in the client’s executive leadership team proposed asking us for the discount to see whether we had been true to our commitment to provide the best price we could to do the project. The entire exercise was a test. If we had offered a discount, we would have destroyed all of the trust we had established both in our price and our ability to deliver.

And we would have lost the deal.

Of course, if we had not won the deal, we would be asking ourselves “what if” questions to this day. But doing the right thing is always the right thing to do, and you’ll never regret doing the right thing.

Throwing Gold Out the Window

Some people don’t recognize gold when they see it.

Not gold in the sense of the precious metal. I mean something rare that others greatly desire. Something they wish they had.

Such as a conversation with a client.

Whenever I hear someone on an account team say, “We have a meeting with the client,” I respond: “This is fantastic! You have a chance to hear about their challenges, provide updates on industry developments, and can get some insight into how we can make them successful. What are you doing to prepare for the meeting?”

Often, the response is, “Well, it’s their meeting. We figured we’d hear what they have to say.”

And that is like seeing someone throwing gold out the window.

Every opportunity to meet with the client is as precious as gold in your hand. First of all, the client is busy! They are trying to run their business, meet the demands of internal customers, shareholders, and/or leadership. The fact that the client takes the time to meet with YOU is extraordinary!

Yes, you should go in and listen; but what are you listening for? Have you discussed, as a team, what the latest news is at the client? Have you checked their website? Checked news articles for any developments with their competitors? Have you thought about something you can share about the industry that they may not know? Will you leave the meeting with the client feeling that the time they spent with you was incredibly valuable to them, such that you can get another meeting next week?

Creating a strong, trusted relationship takes a long time. It needs a strong foundation, built one stone at a time. But you can’t build a stable structure on a pile of rocks. The foundation has to be designed with thought, intent and planning.

Preparation for any conversation is vital to you achieving what you want from that interaction, even if you claim you’re just going “to listen.” Because if you don’t know what you’re listening for, you won’t know when you’ve heard it.

Afraid of Negotiations

I am never surprised to find a business executive who is a terrible negotiator. I am, however, surprised when a business person admits they are a terrible negotiator.

It takes a great deal of humility and self-awareness to concede a lack of skill at something so critical to success as negotiating. Some people have told me they are afraid of negotiations. When I ask them why, the answer usually has to do with the perception of conflict. They claim they don’t like to have difficult conversations. 

While a good negotiation should be about problem solving, and not conflict, there is no doubt the discussions can get contentious. We are all different “types” of negotiators, and what type you are will determine how you deal with conflict and what you can achieve as an outcome. Identifying what type of negotiator you are can help you become a better negotiator if you work at it.

For example, if you are the type of person described above, you are an “avoider.” Rather than deal with issues you perceive as contentious and emotional, you will avoid having the conversation. How do you change? Think about your own goals and ask how you will achieve them if you don’t actually address the issues. At some point, you will have to come to the table, or you will never get what you want.

The avoider who solves his or her problem by saying “yes” to another party’s demands is an “accommodator.” How do you know if you’re an accommodator? Well, if your customer says, “I really like what you’ve proposed, but can you cut the price by 10 percent?” and your reaction is to figure out how much you can cut the price, you’re an accommodator. Rather than ask why a price cut is necessary and what you will get in return, you immediately believe that you have to give the customer something “or else the customer will be mad or might go to the competition.” News alert: the client can always go to the competition, so that “threat” is never new. Also, if the client would drop your services because you wouldn’t lower your price, you never sold the value and won the deal. Losing on price means the client views you and the other bidders as commodities, so lowest price was always the winning factor.

If your reflex is to say, “Let’s split the difference,” you are a “compromiser.” While you may listen to the customer’s request, and think about how to respond, in the end, you give up your own self-interests to “cut to the chase” and get the deal done. This is not to say that compromising is always a bad solution. Sometimes the only way to resolve a problem is by compromise, especially if continuing to work the issue has diminishing returns. But it should not be your initial reaction to resolving an issue.  

If you say “no” and refuse to have a conversation about other options (“My way or the highway”), you are a “competer.” For a competer, negotiations are about winning, and are very ego-driven. The problem with being such a positional negotiator is it doesn’t work well when establishing a business relationship. When buying a house or a car, where relationship is less important, it is OK to focus on getting the best deal. But if you want to sell a multi-year services deal, the quality of the relationship is a critical part of the success of the engagement. In addition, as a competer, you may get your way some of the time, but you are also likely losing a lot of value by not brainstorming on other ways to address the problem and create greater synergies.

The ideal negotiator to build strong business relationships is a “collaborator.” A collaborator wants a deal that benefits her company and meets her interests, but is also focused on the other party’s interests and seeing how best to meet them. A collaborator listens actively, trying to find the clues in what will best work for the other party. She also promotes brainstorming around the engagement to see if the parties can find more value to share, so rather than dividing a fixed “pie,” they are increasing the size of the pie. A collaborator brings all the parties together to maximize the benefits, outcomes and efficiencies in the deal for everyone.

How do you improve your skills and become a better negotiator?

A woman was walking in midtown Manhattan carrying a violin case. She stopped a stranger and asked: “Excuse me, sir, how do I get to Carnegie Hall?”

The stranger replied: “Practice, practice, practice.”

How to Succeed in Sales (and Space Travel)

Years ago, there was an interview with a NASA astronaut in which he was asked, “What would you do if you were in danger of destruction and had only one minute to save you and your crew?”

He responded, “I’d spend 50 seconds figuring out a solution, and 10 seconds executing it.”

A couple of elements of that exchange delight me. First, it highlights how cool astronauts are. These men and women are engineers, pilots and scientists, and they are not afraid to get launched into space on a giant rocket. That combination of intellectual capacity, discipline and courage makes them seem like the closest thing we have to real super heroes.

Second, it validates the old principle which I use in selling: plan the work and work the plan.

Note that the astronaut, who is trained to deal with crises, allocated over 83% of what could be his last minute on earth to planning his next steps, and the remainder to action. How often do you, when given a great sales opportunity, jump into action (“Let’s show them the solution!” “Let’s give them a price!” “Let’s sign an LOI!”) before you do any substantive planning?

Selling, like space travel, can be unpredictable. (That may be the only comparison I can make between the two!) And when something is unpredictable, it is because it has variables. (Constants are not unpredictable because they are, well, constant!) If we have to deal with variables, particularly ones with broad and material implications, we can’t develop a consistent plan that will address all cases. But we can develop a consistent process that produces a plan, taking into consideration the unique engagement we are going to undertake. For example:

• ·       Qualify the deal

o   How do they buy?

o   How do they decide?

o   How else can the client achieve its goals?

o   How can we compete?

o   How can we win?

(See “The ‘Five Hows’ of Sales” https://dealwhisperers.blogspot.com/2012/02/five-hows-of-sales.html.)

    

•       Build your pursuit team
•       Develop a power map
•       Etc.

The need to take fundamental planning steps does not change from deal to deal. And if you establish a process for how to analyze and strategize to customize a plan to deal with the variables, you will give yourself the best chance for success (and that trip to Mars you’re dreaming of).