One of my First Negotiations
I’ve said before that a master negotiator makes sure his counterpart walks away from the table feeling like a winner.
All savvy buyers are players, and they love negotiating, which they treat like a game. They enjoy it, and when they play with another trained player, it’s fun for them.
It may not be fun for the seller. In fact, I know from experience that playing the game will make a salesperson sweat, so I thought I’d share a story of one of my earliest negotiations.
A guy called me from New York and he said, “Steve, you trained me some years back when I was working at a company out in California. Now I’m in New York as the sales VP of another company, and we’re trying to turn the place around. I’d like to bring you in and implement a selling system.”
I was all in, but after a couple months of negotiation, we still hadn’t managed to get the deal done. He told me, Our CFO says he’s not going to pay what he calls your ‘silly Silicon Valley rates.’”
I realized the one who’d approached me didn’t have the authority to make a decision. I made a polite pitch to go over his head, “Look, I don’t know if you’ll be willing to let me do this, but is there any chance I could just handle the heat myself? Could I talk directly to the CFO, and see if I can allay his misgivings?”
He said, “Sure. I’ll set up a three-way call.”
Recognizing a player
The CFO opened up with, “You know, Steve, this is all fine and good. I understand Rob wants to work with you, but there’s no way we’re going to pay your silly Silicon Valley prices.”
He squeezed, and with a hint of outrage. He wanted to prove himself a tough guy.
But I had prepared well for this negotiation. I’d written my mobile defense plan down on a piece of paper.
I said to him, “This presents a problem for us.”
“What’s the problem?” he asked.
I said, “I don’t know if discounting by your salespeople is something you can see as the CFO. But as I see it, we have two choices. I could hold firm on my price, disappoint you in the moment, and then teach all your salespeople how to hold firm on price. Or, I could give you a big discount, and then you’ll be pretty well assured that I’ll pass that disease on to your sales force. Which do you prefer?”
This was my very first time negotiating with a genuine player. And it was exhilarating. Afterwards. In the moment, I was a little uncomfortable; scared, if I’m totally honest.
But the CFO laughed. He had opened with the angry flinch because it works on 95% of salespeople. But when I didn’t roll over like a puppy, he had to acknowledge that I was a player, too. “That’s pretty smooth,” was the way he put it. Now our interactions were player-to-player interactions. Game recognizes game.
Though I had gained a measure of respect with the CFO, he was just getting started on his game.
It was right then in my brief moment of exultation that he executed the perfect ambush. He said to me, “Steve, all well and good. But Rob had trouble finding you. He ended up talking to one of your colleagues here in New York. He says he’s got the same material you do—for a lot less.”
This was unexpected. I owned a franchise at the time and franchisees tried not to undercut each other. I asked, “Does he know you’re talking to me?” He said, “Oh yeah. He knows.” He said it with some pleasure in his voice. I didn’t like it. I didn’t think it was supposed to be happening this way. But there we were. That’s what was happening. I had to deal with it.
I asked, “How much is a lot less?”
He said, “Steve, he is one fourth your price! And no travel expenses!”
Now that he’d ambushed me, my planned script wasn’t going to work. No plan survives first contact with the enemy. But I knew I had to threaten to walk away.
I said, “You know what? I know you probably don’t believe this, but even with my silly Silicon Valley rates, my calendar is full. So unfortunately, as much as I would love to support Rob, I can’t put days on my calendar at less. But it does help me—and you—solve a problem. Because clearly you’re going to work with that guy, I’ll call you after the program, and if you feel he was good, I’ll help fill his calendar.”
The CFO was counting on the intuitive response. He expected me to say, “Where do I need to be to earn your business?” Or to split the difference. When he squeezed that second time, he really expected some sort of a drip.
But, I was sticking with my mobile defense plan. He squeezed me like a rag. I did not drip. Twice. The seller must never drip the first or the second time. And in the response to the second squeeze the seller must make it quite clear that he’s perfectly willing to walk away.
Be confident in your solution
Yes, the CFO was making me sweat, but I didn’t actually believe he was going with the other guy. I knew that if he intended to go with the other guy he would have already done it. He wouldn’t have been wasting his time talking to me. The threat of going with a competitor was intended to break my resistance and get me to come down a bit in price.
I stood firm, and boom! The deal closed, no discount.
What savvy sellers need to understand is that it’s not about the money. It is about the buyer’s willingness to pay. If they are willing, they will find a way to become able.
If you are ready to take your own game to the next level, consider negotiation training.