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).

Don't Judge a Book... Actually, Just Don't Judge

A young colleague and I were in a ride-share, heading into New York, and we began discussing the deal we were working on.

Tyler was asking questions about sales strategy (he’d only joined the firm three months before). I was explaining the importance of building trusted relationships with clients to be more effective in helping them solve their problems.

I couldn’t help but notice that the driver, an older African-American man, with dreadlocks piled high on his head, was frequently glancing in his rear-view mirror. He was obviously listening to the conversation. At one point, I noticed a wrinkling around his eyes. I couldn’t see his mouth, but I assumed he was smiling.

This was a multi-stop journey, so we dropped Tyler at his apartment, and then continued on to my hotel.

After Tyler got out, the driver said, “I hope that young man appreciates the fact that he has access to someone like you. You just gave him a wealth of information for nothing.” I mistook his accent as Jamaican. He corrected me. He was originally from Congo. His name was Maswamba.

I said, “Well, thank you, but that was just me babbling on as I often do with younger people. I like to coach them to be better in their roles.”

“But what you were saying to him was correct,” Maswamba said. “You don’t sell product, you sell yourself.”

I said, “That is absolutely true. You seem to have some background in sales.”

Maswamba laughed, “I was a salesman for 40 years at Unisys.”

“Really?” I said. “You sold for Unisys?” I tried to imagine if he had sported those dreadlocks when he was selling Unisys equipment in corporate America.

“Oh, yes, I sold a lot of big boxes. A lot. And the only reason I drive this car is because my son got sick of me being home all the time. This is only my third week.”

“And it gets you out to meet new people!” I joked.

Maswamba laughed again. We talked about sales, raising children and social issues until we got to my hotel. (We were so caught up in conversation, in fact, that he missed the turn instructions coming from his phone twice.)

I left the car, energized by the wonderful discussion we had. His initial appearance had set my perception of him in one direction. Once engaged, his easy manner and style confirmed what he said: he must have been a great salesman in his day.

I made a mental note, for the umpteenth time: don’t judge a book…

Actually, I thought, just don’t judge anyone. First impressions can be misleading, and it takes time to really understand what people are truly about. But take the time. It’s worth it.

"Golf" is a Four-Letter Word

There is an old joke that asks: Why did they name the game “golf”?

Because all of the other four letter words were taken.

If you listen to a frustrated golfer, there are other words they use to express their emotions that could have been used as the game’s name. Rarely does a golfer miss a putt and yell, “Golf!”

Similarly, while called “sales people,” the reality is that the best of us don’t actually think of what we do as “selling.” The concept of “selling” has with it a connotation of convincing someone to buy something they don’t really need. Yes, someone may be successful at that, once, but the purchaser will soon realize they don’t need it and won’t work with that salesperson again.

For me, the goal is not to “sell” to a client, but to turn the client into a “buyer” of my firm’s services once they recognize the value of the solution we are proposing. That requires more than “selling.” I have to ask questions, listen, understand the nuances of the client’s challenges (maybe even more than they do themselves), make suggestions and listen some more. When I suggest a potential path forward, I want the client to trust me that I will do all I can to make them successful in this engagement so they ask for my help. They become a buyer.

Though “sales” may not be the ideal word for what so many of us do, I guess, like golf, we’re stuck with the word. It would be difficult and confusing, instead of telling people I am in “sales,” to say I am in “buys.”

Open the Black Boxes

I once negotiated for two weeks on the word “capital.” Not because people were being difficult. It’s because we were not explaining ourselves well.

When trying to close a sale, it is important to remain open, flexible, and maybe a little stupid (see, “How Stupid Can You Be?” http://dealwhisperers.blogspot.com/2014/03/how-stupid-can-you-be.html).

The stupid part can be especially useful because it allows you to ask clarifying questions: Why is that important to you? What do you mean when you say that? How does that affect your business? Asking open questions such as those may lead you to what should not be a surprising conclusion: your client doesn’t see the world the way you do.

People are complex animals: highly cognitive, reasoned, self-interested and emotionally contoured. When trying to come to agreement with another, it’s the contours of emotions that usually create the conflicts. We all have been shaped differently, by nature, nurturing or experience, so we all react or perceive what we see in the world differently. Words are black boxes. Sometimes you don’t know what’s inside until you open up a dialogue.

In my case, I was negotiating with a large pharmaceutical client over a termination clause. The client wanted the right to terminate our multi-year services agreement for convenience. I said we would do that, subject to a fee of several million dollars. When the head of procurement asked what the fee covered, I said “our invested capital.” He said no.

We went back and forth, neither one giving in on the issue, until he finally asked me the clarifying question: what buildings do you have that you are investing in?

Buildings? I said, this is not about buildings. It’s about money. The cash we invest in launching this deal and transitioning the services. If you terminate before we recover that investment through our fees, we need to be made whole for that capital.

He smiled and explained he had a different view of what “capital” was. He had been pushing back on this provision for two weeks because he thought our need to recover “capital” was related to infrastructure. Being a pharmaceutical company, he said, we run factories that manufacture drugs and the word “capital” is tied to hard, tangible assets.

Once we understood the source of the miscommunication, we closed the issue. As a result, I now know when there is a challenging issue to resolve, it’s time to open the black boxes.

Make An Offer They Can’t Refuse

I began my professional career as newspaper reporter, so I have always seen words as powerful tools of influence. The adage, “The pen is mightier than the sword,” may have more relevance in today’s political environment than when it was first uttered in 1839, but it has always been true in developing sales strategies. After all, how many successful business deals are closed by threat of “the sword” or brute force (other than contracts negotiated by Vito Corleone and Luca Brasi)? The successful signing of a long-term deal requires trust and respect as a foundation, not violence.

That’s why I always bristle when a deal team sets up a central working location and refers to it as the “war room.”

What war? Who are we fighting with? The client? The client is not our enemy!

Our goal should be to engage with the client, build a relationship that recognizes the value we will bring, and move through issues collaboratively to get to a result that maximizes the outcome for both parties.

I always rename that central location, “The Deal Room.”

To some this may seem like a fussy point, but getting this right sets the foundation in how your people think about selling. Using references to fighting and winning creates a frame of reference for the deal team that this will be a “battle” and we have to “beat the client.” We don’t want to beat the client, we want to help the client.

Framing the opportunity to solve the client’s problems and help grow its business as an adversarial relationship will cause people to focus on the challenging aspects of the dialogue with the client. The team will not be tuned to listen for the clues from the client about what will resolve the issue, i.e., what’s really driving the client’s ask?

For example, if the client says, “I need you to cut the price by 20 percent,” the adversarial frame of reference says, “Here we go! They’re trying to screw us on price!” The collaborative frame of reference analyzes the request and thinks: “For the last six months, they have talked about quality and using our best people and have never talked about price. Why this and why now?” It may turn out, as has often happened to me, that the client’s budget was cut and they can no longer afford the solution as modeled. They are asking for a price reduction, but what they are really saying is “I have an issue! I can’t afford what we have agreed on so we need to change the solution on the table.”

Once you understand the client’s challenges, you can work on options that solve for their issues and still meet your interests and needs. Put together a proposal so creative and insightful that you can make an offer they can’t refuse. But not in the Vito Corleone sense! It should be that they can’t refuse the offer because it is so good they’d be foolish to miss the opportunity to work with you.

Cheap and Fast, But Not Very Good

There are several ways to join two pieces of wood together.

A hammer and a nail is one way. A screw and a screwdriver is another. You can also use adhesive. And sometimes a clamp works best.

If you’re building a house and framing the walls, you’d use a nail gun. You want to work quickly and you don’t care what the wood looks like when you’re done.

If you’re making a china cabinet out of mahogany, adhesives and small screws in pre-drilled holes to join the pieces would likely produce a better aesthetic.

Likewise, there are multiple ways to negotiate a deal, and which one you choose depends on the situation. In the end, it all depends on the answer to a simple question: what do you want?

If you are at a stop sign or getting on an elevator, you want to move along. Who goes first is not going to be a lengthy discussion and there will be no “so tell me about yourself” conversations. If we follow the rules, the negotiation will be quick and we will all get on our way. Goal: expediency.

When you and a significant other are discussing where to go for a vacation (and, yes, that is a negotiation) the idea, usually, is to go on vacation… together! If you get what you want and your other gets what they want, you may end up in different places! Goal: relationship.

When buying a new car, you try to get the best deal you can. So does the dealership. This is a “positional” negotiation. You use data to work down the price. The dealership tries to see how long it can resist. You probably don’t care about the “relationship” (and the dealer may or may not care). Goal: lowest price.

But when we negotiate for large business agreements that involve collaboration and multiple years of services, we have to combine the substance and the relationship in order to achieve the optimal outcome for both parties. If one side is focused on trying to squeeze every concession out of the other side for the sake of “winning,” the outcome is both sides lose. Usually, in a multi-year services deal, the goal is “success”: get the system installed; improve the quality of services; drive cost out of operations.

If the engagement is a failure, no one ever asks, “But did you get a good price?”

You can make a china cabinet from pine boards with a nail gun. Just don’t expect anyone to slap you on the back and say, “That's a beautiful piece of work! I'm proud to showcase it in my dining room!" Like a complex business engagement, no one is satisfied when it's cheap and fast, but not very good.        

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Beyonce and Me!

I was in Times Square last week and, while walking down 42^nd Street, I passed a young man hawking discount tickets to one of the area’s tourist sites. In a voice feigning enthusiasm, he recited, over and over, “Madame Tussauds wax museum. Get a $6 discount. Madame Tussauds wax museum. Get a $6 discount.”

From the few minutes as I approached, and then passed him, I didn’t see anyone stopping to buy a ticket. I turned around and walked over to him and asked, “Are you compensated on the basis of how many of these tickets you sell?”

“Yes,” he said. “I’m paid hourly and on commission.”

“Why would I want to go to Madame Tussauds?” 

“We have over 150 celebrity figures!” he said.

“Do people know that’s what’s in the wax museum?”

He shrugged.

“I’ll bet a lot of people don’t even know what Madame Tussauds is,” I said. “There are a lot of international tourists in Times Square. You need to tell them why they should go to Madame Tussauds. Get them excited about what the experience will be all about! Try yelling out, ‘Get your picture with Beyonce! Get your picture with the Avengers!’ Your customers need more information so they believe that this is something they shouldn’t miss! Get them thinking, ‘Wow! A picture! Beyonce and me!’”

He laughed and shook my hand. “Thanks for the tip.”

It’s the most important question to answer in sales and the easiest to overlook: “Why?”

Why should a client buy from you? And why you instead of your competitor? Why is your company different? Why is your offering different? Why will they get better service/innovation/value from you as opposed to someone else?

The client needs to fix a problem, meet an interest or improve its environment. In order for the client’s mind to reach the conclusion: “I choose you!” there has to be a foundation of why “you” are the best choice. If the client doesn’t know why to choose you, then it will be obvious why they don’t!

On my way back to the office, I tried to ask the ticket vendor how the new technique was working, but he was in the middle of a sale. He gave me a smile and a wave.

The Strong Don't Survive

“We’re glad you’re here. We need a tough negotiator.”

I have heard that opening line a few times in my career and, frankly, I don’t know what it means to be “tough” as a negotiator. People mistakenly believe that when dealing with a difficult party the answer is to be “tough” in response. I have always found the right strategy for dealing with challenging business people is to be inquisitive, understanding and grounded. Build a shared goal and develop a sense of trust. Trust gets deals done, not muscle.

The key is being able to assess a situation and develop a strategy to build that trusted relationship. Every deal is different because the people, personalities and problems are different. This is how I learned that old, often-quoted saying is wrong: The strong don’t survive. At least, not without the ability to change the direction and allocation of strength.

In my experience, the adaptable survive. In fact, if you’re highly adaptable you don’t just survive, you thrive. A lot of “strong” companies are being upended or going out of business because of the technical innovations of the last 25 years. The ones that can adapt to change are still thriving.

Adaptability in sales and negotiation means being able to adjust your attitude and communication style for the right balance of relationship and substance, depending the deal.

When I am negotiating to buy or sell a house or a car, I am positional. My goal is to sell for as much as I can or buy for as little as I can. Relationship is not as important as I don’t expect to have an ongoing relationship with someone once I buy their house and they move.

When I am negotiating for vacation, I am personable. If my wife and I are trying to agree on where to go for a holiday, I don’t approach it with a need to “win” in the negotiation. I need to focus on relationship, be amenable to her ideas and mutually agree on where we will go. If I negotiate “tough” and get my way, I likely will be on vacation by myself!

When negotiating for a large, complex technology deal with a client, I am collaborative. The goal is to solve the client’s problem, meet its operational needs or maybe deliver a new system. I can’t treat it like selling a house because the relationship does matter. A lot. We are going to be working together for a few years so we need to build our relationship. I can’t treat it as if the issues are non-material, like a vacation. The client has legitimate needs and concerns and so do I. 

In the end, the deal has to meet the client’s interests or else the effort is wasted; and I need to push for my interests so the deal is successful for me, my team and my firm. Being “strong” or “tough” won’t get me to a mutually beneficial outcome. The ability to assess, adjust and execute enables us to succeed.

No Cinderellas in Sales

This weekend the men’s NCAA basketball championships semi-finals will feature an improbably entry, much to the delight of millions of fans: a Cinderella story. For the first time in history, a team initially seeded at 11, Loyola University of Chicago, has made it to the Final Four.

What I enjoy most about March Madness are the upsets. Seeing “underdogs” with passion and drive upset the established seeding and throw everyone’s brackets out of whack. The concepts of teaming, practice, focus and achieving a singular goal (closing the deal) are all relatable to sales people.

But there are no Cinderellas in sales.

Despite how badly a sales team may want the business, how passionate they are about bringing their service or product to the client to solve a problem, big deals are won by the top seeds.

I have been the “bottom seed” a few times and if desire was the winning element, I’d get the deal every time. Here are three lessons I learned from being at the bottom:

• Clients buy risk reduction. Unlike other disciplines, the technology services industry is not a place where businesses say, “Hey, let’s take a chance on these new guys” when the deal involves heavy lifting. No one wants to get fired for making a bad choice.
• Get famous somewhere else. If you don’t have the credentials for this deal, figure out how to get them. Either focus on a vertical (retail) and make your name there, or focus on the sweet spot of your business (data analytics) and build market awareness of your expertise. Those become your springboard to other verticals, other services and bigger deals.
• Focus on service. In the end it’s references that can swing a decision in your favor. Even if you have had a few hiccups on delivery, good customer service (integrity and communication) will save the reference. In fact, having a reference acknowledge to a potential client that there were problems (and there are always problems) but you made everything right is a powerful reputation to have. You’ll become known as the top seed.

That said, I am cheering for Loyola, the Cinderella, even though I have Kansas to win. Maybe it’s my Jesuit education; maybe it’s the charm of Sr. Jean, their 98-year-old chaplain. I really think it’s wanting to be further inspired by a group of young men who have worked so hard to accomplish something they were never expected to do.

A Bad Marriage

I can’t remember the first time I heard someone say it, but I have heard it dozens of times since then: a bad deal is like a bad marriage.

The comparison is a convenient though imprecise one. Given this is Valentine’s Day, I thought an article that connects sales and romance would be appropriate.

How is a deal like a marriage?

·         Emotion plays a large role in the decision to make a commitment.

·         Once the deal is done, there is a “honeymoon” period.

·         The relationship can last for years if each party is willing to work at it.

·         A fruitful relationship will produce offspring/follow-on deals.

·         Money is often the most difficult topic to address.

·         Good listening skills will always improve the relationship.

·         Termination of the relationship can be expensive and emotionally draining.

How is a deal not like a marriage?

·         A successful deal has multiple relationships of executives on both sides. Multiple relationships are generally not a good thing in a marriage!

·         The balance of “power” is not the same. In a deal, one side is typically “serving” the other’s needs. A marriage should strive to be a relationship of “equals” who treat each other with love.

·         In a successful deal, each party understands its “responsibilities” and service levels are clearly defined. In a marriage, roles and performance are often a topic of discussion!

·         A successful deal is typically negotiated with an end or outcome in mind. A successful marriage is “'til death do us part.”

·         In a deal, the service provider is always aware that the competition is “just outside the door.” In a marriage, that is called a “stalker.”

So, though not exactly alike, what are some of the shared characteristics of a bad deal and a bad marriage and what can we do to improve both?

·         Frustration with the other party’s behavior: Communicate. In a deal this is called “good governance.”

·         Failure to meet expectations, whether realistic or not: Be flexible and understanding. Maybe the other side oversold, but it doesn’t mean the relationship won’t flourish.

·         Seemingly “irrational” reactions: Ask and listen. Often one party’s reactions are driven by our own behavior and we don’t recognize or can’t admit we are the source of the issue.

·         A desire to terminate the relationship: Seek help and problem solve. If the parties believe there is merit in the relationship, bring an objective party into the conversation to offer options on how to improve it.

Happy Valentine’s Day and good luck with all your relationships!

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I'm Allergic to Nuts!

One of the advantages of owning an Italian restaurant is that just about everyone who comes in wants Italian food. It would be an odd thing for a customer to sit down in an Italian restaurant, look at the menu and say, “I don’t like anything I see. Can you make General Tso’s Chicken?” Customers choose the type of restaurant they want to go to, so it’s much easier to sell to them.

Sales people don’t have that advantage. When talking with a potential client, the first task is to understand what the client wants and what the client needs. (Those two things are not always the same, by the way.)

Before I start selling innovation, I need to understand if the goal is to bring technology advancements into business operations. Maybe the goal is to drive efficiency. Maybe to improve performance.

Many salespeople will guess what the client wants most, and they conclude (often mistakenly) that it is price. So they lead with a discussion on price, sometimes offering discounts right out of the box! Why would anyone begin by discounting price without even knowing if price is the key buyer value? It’s like throwing a plate of pistachio-encrusted tuna at the customer and say, “Eat this! This is delicious!” You may get an angry response, such as: “You idiot, I’m allergic to nuts!”

Here’s a simple way to test if you understand what is driving your client’s appetite: ask questions. And then ask more questions. And listen. A good opening question that can generate a lot of valuable insights if you listen to the answer is: “If this were to go exactly as you want it to, what would success look like?” The client might say:

·         Success would be all of our legacy data is successfully migrated to the new platform. We’ve tried twice and failed.

·         Success would be greater efficiency in our operations so we can sunset applications.

·         Success would be ease of scalability and flexibility in the solution because we anticipate rapid growth in the next five years.

Sure, they want it at the best price possible. No one wants to overpay. But once you dig in more to these goals of dependability, efficiency and flexibility, price becomes secondary. To lead with a pricing discussion without understanding the buyer values would be… nuts.

Here Comes Santa Claus...

Yes, it’s that time of year 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.”

“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 time. 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.

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.