Avoid Last-Minute Deal Making
By Steven E. Sacks, CPA, CGMA, ABC
Professional service providers, like salespeople, believe the most crucial part negotiating to close a deal happens at the final stage of talks. But in order to have a satisfactory conclusion, you must set the tone at the beginning stage with an honest and forthcoming discussion based on mutual benefit — with an underpinning of respect and trust.
Take the time to evaluate your negotiation aptitude, which starts with the first conversation and lasts through the final touches of a signed and sealed agreement. Think about this as a process with key milestones. This gives you the chance to make modifications along the way and to avoid the last-minute pressures of bargaining that can remove the advantages you have created. Adhering to a game plan will reduce the chances of objections from the other party, or even worse, the backing out of an arrangement that you considered to be a “lock.”
While eleventh-hour negotiations cannot be avoided at times, consider the process you have undertaken that include clear, comprehensive and precise communication and collaboration, resulting in a series of agreements. When you collaborate, you reduce your need to depend on the grand. sweeping traditional closing and the skills needed to manage objections. You will have avoided issues of a financial impact and understand the value associated with each solution you provide; this is because you and your counterpart have reached an agreement on each element along the way.
Financial Impact of the Problem
All clients want to know what will be the financial impact of a problem and the solution offered. If you cannot help the client measure the financial impact your services will address, then it stands to reason that the client will be unable to measure the value of your solution (also known as the “cost of the problem.”) The result? The client will not be interested in buying your solution, even if you adjust your fee.
If there is agreement on the cost of the problem, it will be natural for the client to consider if the problem is severe enough to act. Remember, your problem is not the only problem the client has; he or she will measure it against the costs of other problems or the opportunity cost of other investments. It will become clearer once priorities are identified.
Going through this process and reaching mutual agreements along the way, you will have negotiated away a number of objections.
Solution to Decision to Results
One of the missteps service providers make is giving the client an engagement proposal before the actual business problem is identified. Clients want to cut to the chase to understand the solution(s). Think about how many times a proposal has been given to a client who had no idea how much the problem was costing his or her business. Further, there are situations where a proposal is given to a client, who had not considered its importance — among other priorities.
When there appears to be a meeting of the minds concerning the financial impact, possible solutions and priorities, the next step is to create a framework for the solution. While not a complete list, here are some questions to consider before deciding:
- What does the client envision the improvement to be after the solution is implemented?
- What are the expected results if time and effort are expended to address the problem?
- What will be, if any, the reduction of the financial impact through the chosen solution?
- What measurements will be used to determine if the solution is appropriate?
- Are there any alternative actions to take to achieve the desired results?
The questions are interrelated and build on one another. This approach will help to eliminate the possibility of last-minute objections because the service provider and the client can manage their expectations and mutual interests.
This is not novel thinking. It de-emphasizes the must-close-at-all-costs approach to selling. The goal is to be in alignment at each stage of the relationship.
As with any client engagement, the theory is a quid pro quo; the desire is a win-win result. You can achieve this by creating a process that allows for sound decision making and reduces the chances for last-minute changes that can negatively impact the desired outcome.
Steven Sacks is the CEO of Solutions to Results, LLC, a consultancy that specializes in helping individuals, firms and organizations meet the challenges of communicating with clarity and purpose. Visit his website at www.solutions2results.com.