Yes, the channel’s idiosyncrasies affects the way you craft your message, but the truth that continually gets forgotten is that when all is said and done, you’re still trying to influence flesh and blood human beings. A prospect will buy a washing machine for the same reasons, regardless of whether they saw the product in a store, on a TV ad or in an online shop. Their motivations don’t change.

The internet promised to revolutionise how comprehensively we could sell products and services, but somewhere along the line we once again forgot that the endgame is to convince a human being that their life will be better after purchase.

The simplest way I can explain this issue is to pose the following question: If you visited a whitegoods store searching for a washing machine, and the salesperson came up to you and said “You should buy this one, it’s white” how many of you would be persuaded? If you desperately needed a washing machine you’d probably still buy, but the salesperson would have had nothing to do with the decision. The issue is that ‘hot’ buyers are a fraction of the total number of prospects. The majority of people looking for a washing machine fall into the warm category (looking but not yet ready to commit) or cold (don’t think they need a washing machine – though cold can change to warm pretty swiftly, sometimes as the result of learning something they previously didn’t know). History tells us “It’s white” isn’t going to be nearly enough to sway warm or cold prospects.

My point is that the majority of websites are a digital version of the “It’s white” sales pitch. They put the product in front of the prospect, but not much else. They’re not particularly persuasive or educational. They’re really just ‘phoning it in’ and haven’t done what all good marketers should – which is to put yourself in the shoes of the buyer.

This is where the idea of ‘romancing the buyer’ comes from. You need to think of the sale not as a transactional, quick exercise, but rather as the development of a relationship. We all know that buyers move through various stages on the way to commitment – so why do we expect we can get them to leap over several stages in a heartbeat and whip out their credit card. It seldom happens, and certainly almost never happens for the vast majority of businesses that are selling more complex or expensive products, or are selling services that are long term and not easily discounted or condensed into a simply ‘50% off sale’ type promotion.

You need to think about how many different ways you can engage the buyer. What can you offer that will give them a taste of what you do? How can you demonstrate your ethics and reliability? How can you demonstrate how you’re different to the competition and guarantee the outcome you promise? Think hard on how you can ‘romance’ the prospect over several stages/interactions. A good sale isn’t a speedy transaction. In fact most fast transactions lead to lower margin work. The best sales are the ones that take some time. Where the prospect is wooed and brought to a level of interest where price is no longer the biggest factor. Take this approach and your strike rate will improve, as will the quality of the work you win. Every business needs a different formula, so you’ll need to experiment, but a good starting place is understanding that a good sale takes time, and you need to hold the prospect’s hand every step of the way.

I’ve spent much of my career discussing sales management and advising organisations on the best way to train and manage sales staff. A significant component of this management is the commission structure. This is because the commission is designed to motivate salespeople and ‘manage’ their effort and actions when they’re out in the field. Salespeople are autonomous – it’s the nature of their job. You can’t treat them like factory workers and have a manager hovering over them all the time. You need to tell them what’s required, give them targets to meet, train them in the best practices to achieve those targets and then let them do their thing. Fail to do this and you shouldn’t be surprised if they’re not high performers.

So how do you build a good commission structure? Well let’s start with the name – I don’t like the term commission, and I really hate the word bonus. What you’re trying to build is a system for motivating your staff. If you don’t incentivise behaviour all you’ve done is come up with a creative way to unnecessarily spend money.

Of course I’m not saying that calling it commission instead of incentive guarantees it’ll be a lousy system, but it doesn’t help. When you call it an incentive structure, it’s difficult to forget the purpose of the exercise. When you call it a bonus, it’s not only easy to forget the necessity to incentivise, it’s common. Most of the commission structures I see have little if any chance of successfully motivating the salesperson consistently over the course of a year (or whatever time period you’re working to).

Please note I’m also not saying that bonus structures don’t have their place. Kingfisher uses one, but we’re not naively thinking it’ll motivate our staff, and that’s not its purpose. We pay bonuses because we want to share the success of the business with the people who work in the business. It’s a financial thank you for the good work they’ve done over the previous year. Where bonus structures are problematic is when they’re confused with incentive schemes.

So let’s look at where the rubber meets the road. It’s easy to call it an incentive program instead of bonus program, but once that’s done how do you make it work? Here are some of the things you’ll want to think about:

Everyone is different: Not all people are motivated by the same things, so get to know your staff. This is obviously a lot easier in a small office than a large one, but if you’re serious about motivating people you’ll want to craft an incentive structure that is accurately-matched to the individual you hope to motivate.

Keep it short: Long-term/annual programs are useless. Short-term goals work much better. Expecting a salesperson to be highly motivated in August about a carrot they won’t get until next July is ridiculous. There’s no issue having a section of the bonus tied to annual performance, but if we’re serious about motivating the salesperson the ‘carrot’ must be easily viewed (ie; right in front of their face). Place it miles off into the distance and it will be unlikely to motivate the salesperson until late in the year when it looms into view, but by then it’s too.

Don’t be lazy: Too often commission structures are just plain lazy. “Here’s your target and here’s what we’ll give you if you hit it.” This simply isn’t sophisticated enough to get the result you want. You don’t want a commission structure to be complicated, quite the opposite. But simplifying something that is inherently complicated takes time and thought. You need an aspect of the structure that is short-term so that it keeps the salesperson motivated each day they come into work. You need the rewards tied directly to effort. You need various elements of performance to be highlighted (because in most cases it’s not just one thing that you want to motivate your staff to achieve). For instance you might want particular types of sales to be prioritised, or you might want after-sales paperwork to be a focus. You also need levers within the structure to provide you with the ability to deal with changes that might happen throughout the year. For instance what happens if they have a good start to the year and are well up on budget? How do you add to the structure to ensure they don’t coast for the second half of the year?

Don’t underestimate the value of surprise: You can’t put a price on ‘Wow’. Any time you have the opportunity to make staff (or clients) go Wow it’s priceless. The same applies to commission structures and motivation. Once you map out the commission structure everybody knows the rules, so spontaneity is pretty much dead. However the value of rewarding staff when they don’t expect it is huge, so be sure to retain an aspect of this in the incentive structure. I used to keep a drawer full of iTunes vouchers so that whenever someone went above and beyond the call of duty I could make an example of them and reward them accordingly. This is great motivation for the staff member concerned, but also highlights to all staff the type of behaviour the business prioritises/rewards and motivates others to act similarly.

Plan for the unintended win: I’ve seen so many situations where a poor commission structure didn’t plan for the unintended win. When a salesperson has a big opportunity land in their lap this creates problems. The sales manager typically responds in one of two ways: (1) Does nothing (as they have few options), the salesperson gets a big payday and the motivation to work hard for the rest of the year is extinguished, or (2) they try to put the salespersons target up, which sows resentment and demotivates the salesperson. So plan for this scenario and have contingencies in place for it (most of the time it’s about building an incentive scheme that has tight parameters on what’s included/rewarded and what’s not so that an unexpected win doesn’t upset the apple cart and make the incentive scheme irrelevant/ineffective).

Baby steps: Setting targets is critical. Small increases are fine, but if you chase big increases and give the salesperson nothing unless they hit it, you’ll demotivate them. Which means you’ve spent a lot of time developing a system that encourages the salesperson to do less. Not an ideal outcome. If you’re chasing big wins, simply have a tiered approach whereby the salesperson gets a little for improving a little, and a lot for improving a lot. You also need to articulate to the salesperson why the targets are so high. Perhaps you’re in a high growth area and the amount of organic growth is significant. Whatever the reason, you need to justify it to the salesperson otherwise they’ll simply see it as unjustified greed and act accordingly.

Some sales managers are probably reading this and saying “I don’t have to justify my targets to my salespeople”. Sorry, but I’m afraid you do. If you want to motivate your foot soldiers to storm the castle whilst getting pelted with arrows you better have a good reason for them to do it. Otherwise don’t be surprised when they all desert the cause and leave you to fight the battle on your own.

Focus on actions, not outcomes: An incentive scheme at its most basic is going to be “Hit this $number and get this financial incentive” but you need to avoid the mistake of not outlining the actions you’re rewarding. The sales target is an outcome that is delivered by working hard at a range of particular actions (making phone calls, calling on clients, chasing referrals, following up leads, marketing, networking etc). So incentivise the actions, don’t just focus on the outcome. Your incentive structure should by its very nature encourage good sales behaviours. Drill down on the actions you want to see from your sales people and include that in the incentive structure. For instance ‘Make at least 40 calls a month to irregular clients, top 20% of clients must receive a visit or call each month, must make contact with 10 new targets on LinkedIn each month etc). This way the incentive structure also works to shape the behaviours of your staff, and sets out a path for them to reach the targets you’re setting.

Don’t forget your strawberry patch: One danger of a hard focus on sales is that the salespeople will go where the money is and forget to tend their original strawberry patch (existing clients). So a good incentive structure will take this into account and have an element that monitors underlying sales performance to existing clients. This ensures that any hard fought wins won’t be washed away by churn (existing clients going elsewhere).

Hold focus: Once you have the commission structure in place be sure to have a process for constant monitoring. You should be talking to staff every week about the team’s performance, celebrating wins and the people having them, and watching for potential dips and addressing them before they become gaping chasms.

We’ve only touched on the tip of the iceberg today, but if nothing else I hope I’ve illustrated some of the pitfalls with incentive structures, and a few of the boxes that need to be ticked in order to develop a system that will motivate your staff over the long-term. If you have any questions or would like to discuss your commission structure, sales staff training or management, drop me a line on rohan@kingfishercreative.com.au

So when I say that the competition can be a source of power, what am I actually referring to? I mentioned a couple of reasons the client may not want to use the competition in my last article. Here’s a few more…

Results: If the client has used you before and achieved good results this will weigh heavily on their mind and make them reluctant to try the opposition. Likewise, if they’ve used the opposition before and found it underwhelming, they’ll be unlikely to want to go back. Not that the client will tell you any of this… it’s a game remember.

Preferences: For all you know maybe the buyer, or the buyer’s boss, thinks your product/service/brand is better? If this is the case they’ll be reluctant to buy elsewhere.

History: If the buyer has had problems with the competition in the past (ie: personality conflicts/arguments etc) this is a source of power for you. Likewise if they’ve been with you for a long time, this history/experience will make them reluctant to leave (though please don’t take this as an indication that you should mistreat long-term customers).

Finance: Perhaps your companies finance terms are more lenient than the competition? This can be a source of power (ie: they want payment up-front but you offer 30 day accounts?)

Position: If your company is seen as the #1 provider of your product or service, this is a source of power.

Hunger: Just wanting the business more than the competition is a source of power. There is no doubt that many clients respect hard work and want to reward it. If you work harder and want the deal more than the opposition, this can be the difference

Geography: If your office is in a more geographically-friendly location than the opposition, or if your company is stronger in a particular area than the opposition, this can be a source of power.

Errors: If the opposition makes more mistakes than you, this is a source of power. That said, research shows that people exhibit more brand loyalty to companies where they’ve had a problem fixed quickly and painlessly, than they do to companies where they’ve never had a problem at all. So problems are opportunities – if your client has one, move Heaven and Earth to fix it. This goodwill can pay dividends for years.

Service: If you service the account more regularly, or add more value, this can be a source of power.

Whatever the situation, you need to understand that as a seller, you too have power. It’s not all one-way traffic – the client may pretend that they have you over a barrel, but in most cases it’s just not true. That said, if you fail to negotiate in an effective manner, pretty soon the client will have all the power because you gave it to them! The way you act trains the client in how to work with you. If you act like a doormat, don’t be surprised when people walk all over you. You have to start respecting your product, yourself and your company, as well as the client, otherwise it’s all downhill.

I get the objections, really I do. But you’re not going to win every sale. And frankly, you shouldn’t want to as some of those sales are so anaemic and poorly put together that they’re more trouble than they’re worth. 

I get that there’s pressure. But it’s that pressure that makes you bad at your job. If you negotiate for a living and do so from a place of fear, you’ll never be any good. A fearful seller is the just about the biggest power a buyer can have. The more pressure on the seller the easier it is for the buyer to request unreasonable concessions. The very strongest bargaining position is to be a seller who doesn’t need the sale. It’s unlikely that this is the truth of the matter, so this is definitely one of those times in your like where you need to fake it until you make it. I’ve said over and over that negotiating is a game. This is just one more example of that, and is no less a part of negotiating than a buyer pretending they don’t want what you’re selling. That’s not the truth – just the part they’re playing to try and get a better deal.

Competition can be an asset.
We all have competition. Marketplaces are getting more crowded, not less. But everyone has to deal with it. The issue isn’t the competition, it’s how we view it. If you’re fearful of it, you’ll get less. However if you have a good product, and you’re a good salesperson, why should you be fearful? They should be scared of you, not the other way around. After all people buy from people they like, and no matter what the competition does, they can’t match you. That’s right, you’re a significant asset to the company you work for – one that the opposition can’t duplicate. So stop worrying so much about the opposition and focus on your own game. I guarantee you it’ll lead to better outcomes.

One of my favourite stories about turning a negative into a position is about the barber from a small mid-western American town. He was the only barber in town and ran a good business cutting hair for $25. One day a competitor sets up shop two doors down from the barber and promptly put a sign in the window that says ‘$15 haircuts’.

When most people hear this story they think that the barber will drop his price to match the newcomer. The natural human instinct is that to be competitive you must match price. But it’s not true – price isn’t everything (in some situations it doesn’t even rate in the buyers top 5).

Just to make this point our small town barber proceeded to put a sign in his shop window that said “we fix $15 haircuts”. The barber had cleverly ‘differentiated’ his service from that of the newcomers and enjoyed continued success for many years to come.

The moral of this story is ‘price isn’t everything’. I mentioned in a previous post that one of my favourite comebacks when someone says the opposition is cheaper, is “That’s because they should be”. The sign that the barber put up was saying just that. “I know other barbers are cheaper, but that’s because they should be”. It also illustrates that despite buyers continually saying price is critical, it seldom is.  

Your powers
As per above, the competition can actually be a source of power when negotiating. Here’s just a few of the common ways this plays out.
They’re not you. There’s no doubt that one of the biggest factors determining where a client spends their money is how much they like the rep. For all you know, the buyer might hate the opposition rep. 
They don’t have your concept/product/service. Not all products/concepts/services are the same. The buyer might try to fool you into thinking they are, but it’s just not true. Unless you stick to your guns, you’ll never find out just how different.
They’re uninformed. Salespeople often moan about training, but the reality is that if you’re  better informed/trained than the opposition it’s a significant strength. And this isn’t just ‘how to sell’ training. It’s training on industry trends, interpersonal skills, technical skills etc etc.

The bottom line is that competition is everywhere, but not all things are created equal. Buyers will try and convince you that you’re like everyone else, or run you down to make you think you’re worth less than you are. But those are just buyer tactics – don’t believe them. Yes, listening is a critical sales skill – but ‘listening’ doesn’t mean you blindly accept every premise the buyer throws at you.  

All you need to remember is this one thing: If a client goes to the trouble of telling you about the competition’s strengths, they probably want to buy from you. After all why else would they bother? If they wanted to buy from the opposition, they would just do it (especially if they’re so cheap and accommodating). They wouldn’t bother waxing lyrical to you about how good they are, they’d just tell you ‘No’ and move on. The reason they go to this trouble is to make you feel worse about your own product. This encourages you to discount/sweeten the deal, which is what they’re really after. 

I’ve said it before, buyers want the best product from the best company at the price of the worst product from the worst company. So if they’re spending time with you, you’re likely the former, and the buyer knows this.

Equals:
Buyers will also want to see all competitors as equal. If they can lump you all into the same category it gives them an excuse to simplify their decision and make it just about price. But not all providers are the same – in fact they are vastly different and we must force the client to address this. There are many factors in the buyer’s decision, we can’t let them fool themselves into thinking price is the only differentiator. 

Responding:
People say sport is 90% from the neck up. In negotiating, it’s 100%. If you start off by not understanding the game or what the rules are, you’ll cop a belting every time (unless you’re incredibly lucky and the person on the other side of the table is similarly ignorant). 

Also the degree of luck you have will diminish as the value of the deal goes up. So if you sell things that are valuable, you can pretty much guarantee the person on the other side of the table is at least competent, so you’d better be too.

When a buyer starts talking up the opposition, a good negotiator will understand what’s happening and respond accordingly. A bad negotiator will try to Wow the buyer with stories and statistics of how great their product is. This is pointless. The buyer’s bluster and deceit is designed for one purpose – to get you to discount. It’s not because they think your product is lousy – as outlined above, they’re likely only talking up the opposition BECAUSE your product is good. So pumping up the tyres of your product won’t achieve anything, other than boring the buyer out of their brain (and many deals have been lost due to this misstep alone).

One of my favourites:
When a buyer starts gushing about the opposition, and tells me how cheap they are, one of my favourite responses is “Yep, that’s because they should be”. How you deliver this line will vary widely depending on your relationship with the buyer, but I never like a buyer to get away with telling me how cheap something is without addressing why it’s cheap. There’s a reason the word ‘nasty’ is consistently used immediately after the word cheap. 

People aren’t stupid. They know you get what you pay for. When price goes down, so does quality. So why should we drop our price? Porsche salesmen don’t drop their prices because a buyer tells them they can buy a Hyundai for less (no offence to Hyundai dealerships). These two products simply aren’t equal. In fact sticking to your guns on price is one of the best ways to justify your price. Dropping the price tells the buyer that you’re not worth what you’re asking. Which is why regularly discounting is a slippery pole. Good luck getting the buyer to pay full price at any point in the future…

I’ll talk a bit more about how the competition impacts our negotiating approach next time. Meanwhile feel free to drop me a line at rohan@kingfishercreative.com.au if you’d like to know more about this subject or any of the previous articles I’ve written. If you’re in business and would like to discuss any aspect of marketing or sales please get in touch.

This natural negativity is demonstrated differently in buyers and sellers. In sellers you will see an attitude of ‘it’s better to get less than lose the sale’. The salesperson will settle, discount, pitch low and backdown in order to get the sale. Sellers who live in a state of ‘damage control’ usually aren’t very good at what they do.

The buyer who lives in a state of damage control will buy less and constantly wind up disappointed in what they’ve purchased. They will also put off making decisions until they absolutely have to. Their natural fears will be heightened by any negative financial news. They may be wary of suffering embarrassment after acting with haste and/or making a mistake.

If you can overcome a buyer’s natural fears you will have a good chance of closing the deal. This is the art of ‘risk reduction’ and it nearly always translates into dollars. Any time you can remove or reduce the amount of danger perceived by a risk-averse client you will improve your negotiating position.

Potential ways to reduce the client’s level of anxiety are:
Research: The more positive data you can give the client about the merits of your product, the more their mind will be put at ease. What, if any, compelling data do you about your product? Do you have it on you at all times?

Testimonials: Positive reinforcement from other clients is a great way to reassure your client. Do you always have testimonials at your fingertips that can be provided to nervous buyers?

Strategy/evidence: The more effectively you outline the logic behind your strategy, the more at-ease the buyer will be. Do you have relevant case studies at the ready whenever you negotiate?

Way out: Give the buyer an ‘out’. For instance letting them know they can cancel at any time will help put them at ease (depends on the product you’re selling, but if it’s results-based, the buyer should be able to quit if it’s not working – locking people into agreements that are routinely failing to deliver is a morally blinkered approach that doesn’t build long-term success).

As with all negotiating there are powers at play that you need to recognise. The naturally risk-averse viewpoint adopted by the majority of our species is yet another of these powers. Good negotiators will be aware of this, and adjust their approach accordingly.

Drop me a line at rohan@kingfishercreative.com.au if you’d like to know more about this subject or any of the previous articles I’ve written. If you’re in business and would like to discuss any aspect of marketing or sales please get in touch.

There’s no reward without risk. The strongest position to negotiate from is one where you don’t care if you get the deal or not. This gives the person on the other side of the table little or no power over you. Unfortunately most of us can’t afford to be this cavalier as the deal is nearly always important, if not vital, to us. As such the art of gambling can be difficult to master, but it’s still a powerful tool for any good negotiator.

There are many moments in a negotiation where a calculated risk is advisable. Here are just a few:

1 Stick to your guns. Bad negotiators constantly fail at this point in the process and it inevitably leads to them getting less. Any good buyer will push for a better deal. Even the village idiot knows how to make a counter-offer. It’s imperative that you stick to your guns and justify your position at least once. Doing this gives you valuable intel about how badly the other person wants what they’ve asked for. It also shows them that you’re serious about what you’ve pitched, and that it’s hard for you to reduce your price / offering. It’s amazing how often this one simple act of gambling leads to the deal getting done. Many buyers will push once, then fold.

2 Pitch hard. Always ask for more than you think you’ll get. Negotiating is a game. Admittedly some games are more serious than others depending on what’s being negotiated, but don’t fool yourself into thinking that both parties aren’t using tactics to try and get what they want. One of the biggest mistakes rookie negotiators make is to take what the other person is saying as God’s own truth. For starters there’s rarely such a thing as truth, only perspective. Even the most amateur negotiator will fudge the truth in order to get what they want. When a buyer walks into a car dealership with $20,000 in their pocket and the salesperson asks what their budget is, they’ll always say $15,000 (or thereabouts). This is hard wired into our brains. For some reason even the most honest person will lowball this number when asked. It’s just how the game is played. If you don’t see it as a game, and fail to recognise the tactics being employed by the other person, you’ll lose your shirt. So if we know the buyer is going to push for the lowest price, it makes sense that our first offer needs to be strong, otherwise any ‘wriggle room’ you may have possessed is gone before you even start (before everyone piles on and accuses me of advocating price gouging, that isn’t what I’m saying. My advice is that you should pitch hard, or put another way, present the best product/package/offering you can as your first salvo. You don’t put your prices up. You don’t offer them something they don’t need. You simply pitch the best thing for their particular set of circumstances, as opposed to offering the cheapest, nastiest, but most easily digestible thing on the menu). 

3 Walk away. Sometimes it’s necessary to walk away from a sale (for a time). If the client is making unrealistic demands sometimes you need to show that you’re serious by downing tools and giving the client time to think everything through. Negotiating is emotional, especially if you’re not getting what you want. So sometimes a break to take the heat out of things isn’t a bad idea. Walking away is one of the most dramatic forms of gambling and not something I’d suggest for a rookie, but sometimes it’s the best option. Regardless it is important that all sellers have a clear understanding of what is and isn’t acceptable. Regularly closing bad deals is a slippery pole that leads to bankruptcy / unemployment. In addition to that, some clients are just bad news. Imagine how much work you could get done, and good new clients you could woo, if you weren’t constantly in a state of damage control with that one client that pays you peanuts and monopolises your resources?

4. Ask for something in return. This is a negotiating tactic that must be employed every time the buyer asks for something. Asking for something in return lets you know how serious the buyer is about what they’ve asked for, and improves the deal for both of you (win/win). So if they want a discount, ask for payment up-front. If they want leather seats ask them to sign on the dotted line then and there. If they want a longer settlement period ask them for a bigger deposit. Whatever the situation, asking for something in return should be your default position. It’s gambling, but fairly low impact and the risk is usually small, yet the rewards can be significant. The simple act of asking for something in return regularly provides you with valuable intel, or leads to a significant step forward in the negotiation.

Good negotiators are good gamblers. They understand that negotiating is a game, and that (in most cases) lives aren’t on the line. They also understand that to be in a game, yet not understand that it is a game (or what any of the rules are) is a great way to get fleeced. 

Next time we’ll continue talking about negotiating tactics and how to improve your outcomes. In the meantime drop me a line at rohan@kingfishercreative.com.au if you’d like to know more about this subject or any of the previous articles I’ve written. If you’re in business and would like to discuss any aspect of marketing or sales please get in touch.

This ‘power’ is probably more relevant and important nowadays than ever before. How often have you heard people remark about the speed of life nowadays? With everyone in such a rush it’s very easy to find yourself trying to tie up one deal so you can get to the next one. Over my career it has been a constant challenge to get salespeople to stop rushing. To focus on the sale in front of them, not the phone ringing in the background. It’s critical that you do the very best you can with the buyer in front of you. Then when that’s done and dusted, you move onto the next. They’ll leave a message – it’s fine. Making the new prospect wait 10 minutes for a call back won’t hurt your bottom line – but I guarantee rushing through the negotiation you’re currently working on will.

You see negotiating takes time. It’s a tug of war and there are numerous steps you need to go through. If you’re in a hurry, you’ll concede ground too easily and give up concessions you shouldn’t. Not to mention that a skilled negotiator will identify that you’re in a hurry and push for more. Just acting like you’re in a hurry gives power to the person on the other side of the table. It tells them so much about your state of mind, the pressures you’re experiencing etc. The strongest position from which to negotiate is always that of the helpful, interested seller who can wait all day.

You see time is a killer for both parties. Good negotiators know this. Even if their life depends on getting the deal done by the end of the day, they won’t let on. 

Think back to your own negotiating experiences. How many times have you, or the person on the other side of the table, let information slip about the pressure of time? Perhaps you’re buying a house and you tell the agent you have to find something soon because your lease is running out? Perhaps you’re selling cars and the buyer tells you they need something urgently in order to get to work? Or maybe it’s a job interview and the employer let’s slip that they desperately need someone on board before June 30? 
None of these pieces of information guarantee you’ll get the sale/job, but they tell you a lot about the other person’s circumstances. As per my article a few weeks back, knowledge is the greatest power in negotiating, and in all the instances above, one party is handing the other a piece of information that they shouldn’t. And when that information details time pressures that the other party is experiencing, it tells you a lot.

How you act on the information you’ve received is up to you. Sometimes you’ll just stand your ground with more confidence knowing that the other party is likely to cave because they’re in a rush. Other times you’ll offer something that helps the buyer manage their time pressure in return for finalising the deal. Or maybe you’ll increase the offer on the table to include additional items that help the buyer deal with their time pressure (if you’re selling real estate, this could be a shorter settlement in return for finalising the sale at the price you are offering, rather than the lower price the buyer is asking for). However you react, the point is that the information about time pressure is valuable and a skilled negotiator will act on it, whereas a poor negotiator will ignore it.

If you have any questions about the information contained in this week’s article, feel free to email me at rohan@kingfishercreative.com.au. If you’d like to know more about Kingfisher’s services visit www.kingfishercreative.com.au. We have a special offer at present for anyone interested in digital marketing.

One way to avoid these hackneyed approaches is to put it in writing. When buyers are presented with documents they take them seriously (a bit like the way people used to take electronic media with a grain of salt but believe everything they read in the paper – if only we could skip back to that era). If previous buyers have experienced the same thing, get a testimonial. If your statistics are legit, put them on paper. If your product is better than the oppositions, lay it all out in a comparison chart showing what you offer and what they don’t. 

Putting it in writing is powerful. Buyers take documents seriously because they understand that they’re binding, for them and the seller. Just ask Frank Abagnale, the man upon whom the book and movie ‘Catch me if you can’ is based. Abagnale was a gifted young conman who led the FBI on a merry dance in the 1970s. Abagnale knew the power of written documents. He forged Pan Am letterhead by steaming the logo off a kids toy plane. Pretty low tech you might say, but it convinced Pan Am to let him run a fake flight attendant school and travel all over Europe passing rubber cheques. 

Abagnale consistently demonstrated his brilliance for spotting weaknesses in systems. At one point he bought a cheap security guard outfit, doctored a sign that said ‘Safe is broken, please give your daily takings to the guard’, went to the airport, hung the sign over the safe and proceeded to wait as all of the businesses happily gave him their takings. He strolled out into the carpark, dumped the cash and cheques into his rental car and drove off. Once again, the power of the printed document is demonstrated. None of the business owners questioned the sign on the safe, they just did what the sign told them to.

So avoid the verbal promises and claims of excellence and, if possible, put it in writing. 

On the same subject, document everything. It’s amazing how useful it is when a buyer tries to rewrite history to have a log of every communication in your project management system. Dates, times etc are all incredibly hard to argue against. I know that every time I deal with a certain Telco I note the name of the person I talk to and the exact time I spoke to them. The amount of times I’ve had that same Telco call up and try to tell me a new version of history is frankly unreal. Having documented notes of what actually transpired has served me really well.

It’s easy to give a product away cheaply. It’s a lot harder to achieve a good price for a good product, especially in today’s environment where a cheap competitor enters your market every other week.

Sometimes your number is up. It wouldn’t matter how good a negotiator you were if you had a telegraph business in the early 20th century. Progress and technology killed your business – there was nothing you could do (other than evolve). But this is not the case in most instances. Many businesses that fail could have made it work, or at least work better, if they’d started out on a different path and had a different approach to sales and marketing.

So over the next few weeks I’m going to outline some of the fundamental negotiating skills that have served me well over the journey. I hope you find them as useful as I have.

Tug of war.

Negotiating is a tug of war. In real life, the strongest team usually wins a tug of war, but in negotiation, the smartest team does. This is because knowledge is a fundamental and critical power in negotiating.

The more you know about the buyer’s situation the better you’ll fare. The more you know about how human beings act/react in a sale the better you’ll fare.

Most salespeople tend to think of themselves as being in an inferior position to the buyer. This is a really bad place to start as it encourages you to think that the only power you have is discounting. Dropping the price is a slippery pole that leads to bankruptcy. Any idiot can give the product away. It takes a skilled negotiator to finalise a deal where both parties win, and where the buyer receives a good product at a reasonable price. 

Knowledge as a power.

The more you know about the buyer, the better. The less they know about you, the better. This doesn’t mean you have to use ‘cloak and dagger’ techniques and give nothing of yourself away. You’re not James Bond – and anyway you need to build trust with the client and that’ll never happen if you’re constantly being cagey. That said, building rapport and blabbing mindlessly are two different things.

People do tend to run at the mouth when they’re nervous (and negotiating makes most people nervous). This leads to them divulging information that they shouldn’t and by providing the client with this information, you are strengthening their bargaining position (and weakening yours).

Knowledge blunders.

Deadlines are a good example of information you should keep to yourself. If you’re under pressure due to a deadline, and you tell the buyer this, you’ve strengthened their position and given them a bat to beat you with.  

Pricing is another. Any comments by you regarding flexibility with pricing will weaken your position. Your goal is to get a good price for a good product. If you tell the buyer the price is flexible, you can be sure they’ll immediately start asking for the cheapest price

It goes both ways.

Clients will also offer more information than they should. When a client says “my boss is in a real hurry over this” they are telling you that your bargaining position is strong. A fundamental rule in negotiating is ‘if you rush you’ll get less’.

Comments about performance can also strengthen your position. When a buyer says “my boss is giving me a hard time about the lack of sales this month” this puts you in a stronger position. You know the buyer is under pressure to perform and that your product is an effective way of turning this around (hence why the buyer is speaking with you).

If you become aware of pressures on the buyer, whether it be time pressure or a need to perform, of if you become aware of anything that points to them having a higher level of appreciation for your product, this tells you that your negotiating position is stronger than you thought. 

Listening is critical.

You will have heard me say again and again that listening is a critical sales skill (quite possibly the most important one). I’ve seen so many salespeople ignore key information like the points outlined above, and each and every time this diminishes their performance/outcome. Salespeople who don’t listen don’t learn, and gathering intel is a crucial part of any negotiation.

So tune in to everything the buyer says. Things you previously thought were throwaway lines could be the keys to unlock your improved negotiating outcomes.