Plenty of people will give you advice on how to close a deal. But what about a really bigdeal? One that represents a significant percentage of your annual or quarterly revenue. The sort of deal in which the CEO and the Board will take particular interest.
The trick is to know that closing a really big deal starts with your very first meeting; because big deals are about so much more than just the price. Here, we will look at some of the principles that need to be part of the planning and execution of such a deal. The critical areas can be broken down into three overlapping workgroups: the customer, the negotiation process and business operations.
It would help if you aimed to do as much as possible for your customer. Doing so will put you increasingly in control of the process. This doesn’t have to involve looking after too many people; as whilst the “deal of your career” will undoubtedly involve more than one person at the customer’s end, be under no illusion: one person is almost certainly the key buyer, influencer and voice to their side of the deal.
Make your customer look smart.
Try to do as much of the thinking for them as possible. Anticipate changes in the law (a good example is a sea-change like GDPR), or changes in the market of the customer’s business (be on top of their trends and challenges), or perhaps highlight something that you know your customer’s Board has been requesting. By making your counterpart look smart, you will be seen as a partner more than a supplier.
Save your customer as much time as you can.
People are busy, and you won’t be the only call on their time. For example, presenting documents in the right format and structure is an easy first step. This approach has many advantages. Providing content in their format of choice enables you to fulfil their information needs in your own words. You will remove opportunities for confusion (e.g. translation errors). But most of all, you will save them time and eliminate the irritation of small jobs like reformatting, copying etc. In a customer’s perception, irritation magnifies into annoyance; whereas helpfulness magnifies into professionalism.
Know who you are dealing with.
All sales training includes making sure you know who can sign a contract, along with those who may have a veto or other interest in the deal. That insight should be a given. Equally important is the personality of each: are they interested in the detail (as procurement or technical people usually are), or only the strategy (as many signatory buyers are)? What information and criteria do they use to make decisions and when are they most likely to be available for a conversation? Knowing this will help you build rapport with the right individuals and provide the right information at the right time.
People are not born negotiators, but like so much in business, it is a skill which can be learned or at least improved and refined. Negotiation skills, when mastered, can help in not only getting a better deal for your business, but also in making the deal better value for your customer. Procurement departments often want to negotiate on price and terms. However, there are many other aspects to a good deal; you should know how important each element of the deal is to you and to your customer – because then you can help them explain their priorities to less enlightened or process-driven procurement specialists. The Schranner Institute offers a simple three-point categorisation of importance:
- Red – things you cannot give away, no matter what. These are reasons to walk away.
- Amber – things that you might remove or include in a deal if you can make progress in a red area. Useful bargaining chips.
- Green – these are the elements of least significance, although that doesn’t mean that they are not important. Giving away a Green category item to secure an Amber or Red would be a good outcome.
Some call it hygiene, others administration, but whatever you call it, failing to take care of the operational detail can scupper the outcome as quickly as poor negotiation technique or not hitting it off with your opposite number. Pay close attention to what’s happening on your side of the fence; above all, you must be the expert across every detail, nuance and rumour.
Don’t hang around.
Big deals hate a vacuum. Emails and calls need a quick response and must be answered effectively. In doing so, you stay close to the decision-making. Letting things fester will cause misunderstandings and lead to miscommunication.
Be close to the deal.
You need to be in charge, and you must see every communication with and from the customer. For big deals, it’s tempting to delegate some of this work, but gaps in understanding and awareness add uncertainty to the outcomes of each stage. Stay in the thick of it!
Be a buffer.
At some point, there will be pressure on either or both sides for an outcome (for example, if quarterly sales figures or an end-of-year reconciliation are due!). If possible, act as a buffer between executives on both sides: your opposite number should also understand that they will need to fulfil this role in their business from time to time. Predicting when this might happen is an important piece of intelligence for both sides of the deal.
Eventually, there is always an argument.
You need to know that no big deal will be complete without a row. It always comes down to a few critical elements. The trick is to make sure that when the row happens, you and the person you are negotiating with are not part of it! Let that happen outside the critical elements of the deal – which you will have already sewn up civilly.
Bring the CEO in only when you need them.
All sorts of people are going to want to know about the state of play. Most don’t need to know: smile and look confident, however bad it may be. There are others who will need briefings early and often. The CEO, CFO and COO are likely to be on this list. It’s very useful to understand what their information needs are. Face-to-face briefings are usually the best; you should also have an answer to the question “How can I help?” If you don’t need help now, point out when and what help you are going to need in the weeks to come. Executives don’t like surprises, so keeping them informed will keep them on your side.
Finance and Control.
There are always rules to ‘follow’. Be aware of them: some internal ones can be bent or broken; external ones can’t be. It may seem the dullest thing in the world, but read as many of your customer’s policies and regulations as possible: there is a good chance your negotiating partner hasn’t, and that will give you an advantage.
In the end, the skills perfected in negotiating a big deal can be a core skill. There are professionals in all walks of business who have made such work the basis of a fulfilling and successful career. It all starts with the ability to negotiate, and that’s a skill that must be learnt, practised and assessed.