Have you ever experienced a time when you thought you had closed a deal with a new or existing client only to find it falling flat, or worse, being given to a business rival? It is rumoured that around 62% of deals fail at the closing stage.
To be successful every small business owner needs to master the skill of closing the deal. How do you stack the odds in your favour to guarantee that much-coveted contract is placed firmly in the bag and stays there? The following are suggestions that might help you ensure your hard work doesn’t go unrewarded:
62% of deals fail at the closing stage
Preparation is paramount: as soon as the deal is on the table you have to be able to act fast. In most instances you will have a narrow window of opportunity in which to close the deal and you won’t want to find yourself being squeezed into a corner. That is when you might end up making mistakes and agreeing to a negotiation that on reflection does not serve you well. Consider the following questions to help think through your approach:
- What is the lowest price you will go to? What does a good price look like? Know the deal you want to create.
- Ask yourself, where are you prepared to compromise? Always leave room to manoeuvre.
- What are the non-negotiables?
- When do you walk away?
Consider any challenges, fears or uncertainties the client might have and prepare your best response. If you are asked a question you haven’t anticipated take a moment to think; don’t blurt out the first thing that comes into your head. Don’t be afraid of the silence; your client will respect you for giving a considered answer, not one that is a knee jerk reaction. All the time you need to ensure you put your best foot forward.
It is important to develop multiple contacts within the client organisation. Everyone involved in the decision-making process needs to be on your radar; you need to be seen as a valuable resource, a problem-solver.
There is a school of thought that maintains that clients will already have decided whose bid to accept well before the final-pitch stage. When all things are equal, people will buy from people they like: creating and nurturing those relationships is fundamental.
Also don’t forget about the people on the periphery. Just because they are not in the meeting negotiating the fees doesn’t mean they can’t affect the decision-making process and influence the outcome. Employees who have worked in the business for a number of years and are seen as trustworthy often come up with persuasive viewpoints. They can identify potential pitfalls that the key stakeholders in the business may not have considered.
Listen to your client
One of the most common reasons contracts are lost is because sellers fail to respond to clients’ questions. Rather than being hell-bent on getting your point across, give your potential clients what they want – answers.
The client isn’t necessarily an expert in your field so once you’ve established their level of knowledge, keep the conversation straightforward and to-the-point. If the client understands what you can do for them they are far more likely to hire you.
Don’t make the mistake of failing to speak effectively about your offer: make sure you have a succinct elevator pitch. The client needs to know the benefits of working with you and how your service or product is going to help that client reach their goals.
It is important that you go into your meeting confident that you have a ‘win win’ proposition. If one side benefits disproportionately it will damage the relationship. Both of you need to work together to forge an arrangement that moves your respective agendas forward. These are the building blocks of strong customer relationships.
Don’t let it get personal
Once you’re clear on the deal you’d like to broker and you know where you’ve got wiggle room, sit down with the other party and talk about the issues. As you negotiate, do not allow the client to dictate the terms: that’s a recipe for a win-lose outcome, with you on the losing end.
Whenever you take a position, be sure you can buttress it with appropriate rationales. Be specific about your facts and remain detached and objective to ensure that the negotiation process doesn’t become overheated.
Asking for the work
Asking for the business can be a daunting issue even for the best of sales people, who can find this difficult. However, there comes a point in every negotiation when you have to ask for the work.
I have known companies lose contracts simply because they didn’t ask for the business!
It’s important to spell it out without sounding desperate; don’t take it for granted that the client will realise that you want the work more than one of your competitors. You need to find the best way to deliver the ultimate question, for example, “is this something you would like to move forward on and would you be willing to sign a contract today?”
If you are not practised at asking for the work, try this on some of your fellow Moxie Club members. See what their reaction is when you deliver that crucial question.
If last-minute demands crop up, hold fast! Sometimes they are simply a test to ensure that the negotiated deal is the best possible agreement. The person with the money doesn’t hold all the power; remember this is about creating a business partnership. In almost every case, the other party will be visibly relieved that you have refused to capitulate and will take the demands off the table.
Is it that simple?
Yes, it is.
Invariably, what the client has been testing, albeit inadvertently, has been your honesty, legitimacy, and integrity and you have proved that you have all of these qualities in abundance and that you have both witnessed the birth of a successful business relationship.
Carole Bozkurt – The Blueprint Practice