Closing Larger, More Profitable Deals
“Taking the easy way out.” “Cutting corners.” “Avoiding “the dirty work.” Carrying out a “half-baked plan.” Everyday English is full of idioms that have to do with performing duties in a less than thorough way. Unsurprisingly, nearly all of them have a negative connotation—and for good reason.
As most of us know, doing a slapdash job in any enterprise ultimately won’t do us (or anyone else in our orbit) any favors. That principle translates to just about any context in life, whether you’re talking about a home improvement project, a friendship or relationship, or—in our professional sphere—if you’re simply looking to maximize the size and profitability of your deals.
In the latter context, it’s no secret that many salespeople struggle with the often challenging, tension-filled negotiations they need to work through to close deals that capture and protect value throughout the sales cycle. Like so many tasks in life, taking the easy way out during these difficult negotiations will likely come back to haunt you. In the best of scenarios, you’ll end up closing the types of margin-eroded deals that won’t help you reach or exceed your quota.
Here are some tips to avoid cutting corners—and losing your value—in your most difficult sales negotiations.
- Don’t flee the tension—embrace it! Our intuition tells us that it’s emotionally agreeable to try and minimize the inevitable friction that arises between two people who want different outcomes. In the sales world, that natural instinct manifests itself through discounting or giving things away for free for the sake of moving the deal forward. When tension and pricing pressure mount, the counterintuitive response of embracing the tension is the more productive one. Research has shown that maintaining a positive attitude toward conversational tension leads to larger deal sizes and more constructive negotiations.
- Negotiate throughout the buying cycle, not just at the end. Many salespeople don’t realize that long before the deal reaches the purchasing stage, they are in fact negotiating. That means that every time a salesperson gives something away—a demo, a trial run, a meeting, early price concessions—they’re essentially bypassing an opportunity to secure more value. This can yield bad results. By not embracing opportunities to negotiate value throughout the buying cycle, you risk falling into the trap of negotiating only about price at the end of it—and having to resort to last ditch, Hail Mary efforts to retrieve or protect your pricing.
- Execute pivotal agreements. Rather than giving away value or resorting to discounting, focus on identifying and executing “pivotal agreements”—basically, milestones you reach throughout the buying that you can then use as leverage for exchanging value instead of giving it away. You can also use these agreements to steer your conversations toward a series of provocative questions, designed to uncover your prospect’s “unconsidered needs.” That helps you break parity with competitors on more than just price, differentiate in a more resonant way, and enlarge the size of your deals.
Your sales negotiations don’t have to be shoddy. By making a concerted effort to capture and maintain value throughout the entire sales cycle—not just at the end—you’ll help close more profitable deals by avoiding the “value leaks” that otherwise erode your margins.