Deadly Negotiation Strategies – The Bob Chronicles Part 8

Bob is Back in the news!

It’s hard for me to believe, but I haven’t written about Bob in more than two years.  If you want to catch up on the Bob Chronicles, you can find the previous eight installments here.

Bob was more excited than I had ever heard him.  He shared that he sent out a proposal for well over $1 million and was prepared to begin negotiations.  I hate negotiations because most negotiations can be avoided if the salesperson simply conducts thorough qualification and discussion of terms up front, prior to ever sending a proposal.  I asked Bob why he thought negotiations would be required and he told me that his prospect said they didn’t want to spend more than $50,000.  You read that right.  He knew they didn’t want to spend more than $50,000 and he proposed a solution for more than $1,000,000!

Bob’s prospect might have been bluffing, lying, testing, hoping, or making a first offer.  It’s also possible that there weren’t any compelling reasons to buy (after all, this is Bob we’re talking about) and there was probably a lack of urgency.  There is also a chance – albeit a slim one – that they couldn’t spend more than $50,000, but billion dollar companies usually have the money to get whatever they want.  Did they really want it?

Bob is not the only salesperson to fall victim to Senseless Negotiation.  In this scenario, not only must Bob negotiate something that could have been dealt with up front, he’s also giving his prospect all the power.  Consider the difference between:

• Having an upfront discussion about fees and terms, where the salesperson still has leverage because they have not yet provided a proposal to the prospect
• Proposing over a million dollars when the prospect’s stated budget was fifty thousand, giving the prospect 100% of  the leverage

Why wouldn’t Bob have this upfront discussion with his prospect?  There are a number of possibilities:

• Bob is uncomfortable discussing money, as are around half of all salespeople.  But Bob ranks in the bottom 50% of all salespeople, where only 21% are comfortable discussing money, precluding any chance of discussing monetary requirements up front.
• Bob believes that $1,000,000 is a lot of money – he has low money tolerance, as do around half of all salespeople. Worse, only 24% of the bottom half of all salespeople have high money tolerance.
• Bob is not able to build/sell value because he himself doesn’t buy value, similar to 25% of all salespeople.  But from among the bottom half of salespeople, 50% lack the “able to sell value” attribute as a strength.
• Bob needs to be liked, as do 61% of all salespeople, preventing them from asking qualifying questions that they think would annoy or upset their prospects.  And 92% of the bottom half of salespeople need to be liked.

So we know what Bob failed to do, and we know some of the possible reasons why Bob was unable to do what he should have done.  That leaves the question, what can Bob do now?

Most sales experts would provide guidance on how to conduct this negotiation but since I’m an anti-negotiation guy, I told Bob to have the following conversation with his prospect:

I told him to say something along the lines of, “I know that you are expecting to negotiate terms and fees on our proposal since we are so far apart. The market value justifies our proposed fee and you’ve shared that you won’t invest more than $50,000. If our solution isn’t important enough to you, I recommend that we both walk away.”

I’ll skip the resulting back and forth that ensued and skip to the end when Bob learned that since his company was the only one who could provide this solution, and the prospect desperately needed this solution, they agreed to pay $995,000.

There are two useful ways to negotiate terms and fees and they both involve not negotiating in the first place.

I mentioned four possible reasons why Bob avoided the upfront discussion.  The three that revolve around money occur in  two of the 21 Sales Core Competencies and Bob’s need to be liked is a third competency.  You can see all 21 Sales Core Competencies here.

I recommend looking under the hood by having your sales team evaluated, discovering your sales team’s baseline in 21 Sales Core Competencies (250 sales attributes/skills), and providing targeted sales training and coaching.  You should also use the legendary and highly predictive Sales Candidate Assessment to identify the sales candidates who will succeed in the roles for which you are hiring.  You can get samples of these evaluations and assessments here.

Stop negotiating!

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