Rules of Negotiating

1. Rule of Reciprocity: People have a natural inclination to repay debts.
2. Conditioning: Nothing comes free. Make sure to give and get.
3. Know what to ask and when.
4. Follow good protocols for pre- and postconversations: Nail down a time prior to conversations, and make sure all decision makers are able to join. Be sure to send summaries to follow.
5. Objective health measurement: Stay aware of the health of your accounts so that you know which ones need nurturing and which ones are ready to close.
6. Time management: Know what accounts to focus on first.
7. Common language: Make sure you relate conversation to what you are working with.
8. Story time: Know what stories to share and when it is appropriate to share them.
9. Know when to walk away: Know when a deal has died and to walk away.

True negotiations are all about coming to a mutual agreement on something, in which both parties feel like they are getting something out of the deal. Contrary to popular belief, you don't “win” a negotiation by making the other person lose. Both parties need to give and get along the way. The more equal those “gives and gets” are, the healthier the relationship is and can become.

The problem in sales is that salespeople tend to be “givers.” They give and give and give, and expect one very large prize in the end as their “get” (i.e., a signed contract), and they think they've earned the signed contract because they did everything the other party asked for. However, if salespeople give throughout the process without getting much in return, they condition the client to treat them like a doormat. The client ends up having little respect for them toward the end of the negotiation process, which is why clients either keep asking for things (discounts) or just disappear and don't even have the courtesy to call back. Salespeople need to find a way to create equality in negotiations from the beginning of the relationship.

Creating Equality in Negotiations

To create equality in negotiations, most salespeople focus on a quid pro quo approach to get things in return for giving something away, which is necessary sometimes but tends to lead to a more contentious relationship. There is another approach that can be even more powerful, which is the “Rule of Reciprocity.” This rule effectively states that we (as humans) are all bound, even driven, to repay debts. We don't like owing anyone anything.

If someone asks us for something, that person actually feels obligated to give us something in return. The sooner we ask for something in return, the easier it is for us to get. By understanding all the “gives and gets” along the way and matching them up, we can know exactly what and when to be asking in order to move the deal through the pipeline to closure or to get out before it's too late.

Don't Jump to Discounting

• Often, salespeople jump to discounting to speed up negotiations. Discounting has such a negative impact in so many ways that it's worth pointing out a few things about it in order to gain some perspective.
• The average S&P 1000 company would suffer a 12.8 percent drop in profitability by giving a mere 1 percent discount, assuming no increase in volume.
• Salespeople make price a more important issue than buyers do (salespeople 8.3 vs. buyers 6.9).
• Whoever feels the most pressure will make the most concessions.
• Discounts kill credibility and create a negative perception of you and your solution.
• Discounts set the stage for future discounts.

So, what's the best way to combat discounting? There are some negotiation and objection-handling techniques that can help, but the best one I've come across is quite simple: just have a big pipeline. The more legitimate, healthy deals we have in our pipeline, the less desperate we are to close deals and the more confident we are in handling people who are trying to push us into discounting. We can also work more along the lines of the client's buying cycle than our selling cycle. Too often, we try to force a client into our buying cycle, which typically is driven by the end of the month or the quarter. We all know sales should be about the client and not about us, so we need to do what we can to get the client to buy when he or she is ready to buy, not when we're ready to sell.

This is why prospecting on a regular basis, even at the end of a month or quarter, is so critical. Spend 30 minutes a day prospecting in some way. It can be making cold calls, sending direct e-mails, searching through LinkedIn, asking for referrals, or something else; just do it. If you're tired of using discounts to close all your deals, then prospect every day to have a consistently full pipeline and see what happens to your confidence and abilities to deal with discounting.

Handling Objections

The best sales reps have gone through every possible objection ahead of time and have already planned their answers. That's why they never get caught when a client counters with an objection during negotiations.

Matt Cameron was the global head of corporate sales at Yammer before and after the multibillion dollar acquisition of Yammer by Microsoft. Before moving to Yammer, he worked his way up closing big deals when he was managing Asia/Pacific territories for Salesforce.

Matt compares the objection process to jiu-jitsu, a form of martial arts, and more specifically, to an “arm bar,” which is when someone has your arm locked around theirs and it's extremely difficult to escape. When Matt was asked how one breaks an “arm bar,” his reply was simply, “Don't get in that position in the first place.”

The deal cycle is the same way. If you start by aligning your goals with your client's goals, you won't get stuck with common objections or roadblocks. Set common goals and timelines from the beginning, and do the best you can to hold your champion or lead buyer accountable.

After working 20 years in sales, Matt has found that the most common objections given by clients are caused by only two things:

1. You haven't sold value (to the individual, not the company).
2. Funds are not forthcoming because you haven't sold to the person with the ability to reallocate budgets.

When Matt is reviewing an opportunity with a senior sales professional, he looks for the following key elements:

• Access to, and credibility with, executives who have the ability to reallocate budgets
• A business case that describes quantifiable, time-bound return on investment, with an emphasis on solutions that differentiate your company from the competition
• An articulation of how the solution will contribute to the decision maker's personal agenda

To sum up, the best way to address objections is not to receive them in the first place, but if you do, be forearmed with the antidote.

Matt also suggests using a “push counter,” which tracks how many times and for how long the customer has postponed the deal. Stalling deals is the death of long-cycle sales.

Demos, Proposals, and Collateral

Demo and presentation software is a hot area of development right now, and I, for one, am glad to see it. I don't like demo tools that make you download something, and I won't list them in this book. It's 2016—get it together.

A great demo is more than just what you put together. The software behind the demo gives customers a good user experience that they will remember and appreciate.

Whether you want to increase opportunities to sell and up-sell, improve a customer's user experience, or just engage with online customers on a regular basis, a good demo solution can increase both your chances of success and customer satisfaction.

On a basic level, there are a few things to remember when you are presenting a demo.

• Create a demo that is short and to the point.
• Don't make customers do too much to get started, and be considerate of their time.
• Go slowly, and don't talk too much.
• Ask questions such as, “What are your thoughts on this?,” “Does this make sense to you?,” and “Does this interest you?”
• Take good notes on customers' comments and feedback.
• Always look for ways to get better.

Most salespeople still tend to use GoToMeeting or Join.me, but here are a few other websites that I like, namely, Blue Jeans Network, Glance, ClearSlide, TinderBox, and DocSend.

E-Signature Solutions

Wonderful—you've closed the deal! Now let's get the customer to sign the contract quickly.

A few good integration tools to look for are e-mail client and CRM. These make it easy to get things signed quickly. I use Google Docs integrations with contracts all the time, and they save so much time. Make sure the one you chose is also extremely secure.

Here are a few e-signature companies that work well.

• PandaDoc: Has very accurate tracking capabilities
• Nitro PDF: Has just developed a new e-signature solution
• Adobe eSign: Has robust offerings with mobile, run by Adobe
• DocuSign: Works on any device and integrates well with Google Drive
• HelloSign: Provides a good online user experience