Finding Your Negotiating Point Of No Return – And Your Soul.

Sometimes in one of the networking groups I help lead, we have 15-20 minutes for an engaging topic of discussion relevant to entrepreneurs. This week, one raised an important question:

“Is anybody else tired of haggling to death over pricing? If we’re small businesses and the lifeblood of our economy, why are we beating ourselves up?”

It’s a very fair question. Rather than bemoan the problems and challenges that come with haggling over price, let’s do something about it. See, if you know who you want to deal with and who you don’t as well as if you know what your value is, then negotiating doesn’t have to be the experience you might regularly dread.

It’s your choice whether or not to play. And for how long.

Get a pad of paper out. List the 10 best clients you ever had. What do they have in common?

Then do the same for the 10 worst clients you ever had. What united them? What did they say? How did they act during the time you were putting a deal together?

Knowing that you’d obviously prefer to deal with the qualities conveyed in the 10 best, what does that say about somebody who displays little to none of those qualities?

These are decisions you are allowed to make and should make in advance of negotiation. Unfortunately, it’s always assumed in this “tell me what you’re going to do for me” world that you want to work with a total stranger you meet at a networking event. No, Chief. Why don’t you tell me a little more about you so we can learn if we’re even possibly a fit first. I have a stable of clients that have to meet a certain criteria and I want to know how much of that criteria you match. Pompous? No. It’s called valuing my own brand and my own time – and believe it or not, it’s about valuing yours too.

So ask yourself some very important strategic questions:

Are they really the kind of client you WANT?
Seriously. Do you know who you do not want as a client? Sometimes when people talk about the criteria of a good client, they chuckle and say, “Anybody with money.” Ha. Stop. No, seriously. STOP. You don’t take anybody with money. You take people with money who help get you where you want to go as a firm. As an agency, do you think they will add to the creativity of your portfolio? Will they refer business to you? Do you think they will enjoyable to work with and not condescending jerks? If you’re working primarily with large industrial clients, why are you taking on the florist down the street that doesn’t have two nickels to rub together?

How many clients do you actually NEED?
If you don’t know, that’s a problem. You haven’t defined what type of client you need to be happy and how many of them if they’re paying your true worth. If you say “I can never have enough,” that’s a way of saying, in other words, that you have no idea. And more importantly, you’re positioning yourself to sound like you’ll take anything that breathes. That’s where big issues and ulcers occur.

What’s your walk away point?
It’s not just about a particular price point but how the prospect is making you feel. If you feel like you are sacrificing part of what makes you great and what people value about you just to make a deal work for the other person, you know it. There’s a tingling sensation in your mind or your gut or your heart or some other region. You just…know it. And yet, you are making deals with yourself internally to make the logic work.

And that’s your walk away point.

Get up from the table, extend your hand and thank them for their time.

Those people won’t be helping because they’ll have line after line to push you over the edge and “sweeten” the deal. Beware.

For example, if I hear “I know a lot of people I can introduce you to if you can cut me a break,” I know I’m likely dealing with a pretender or cheapskate.

In my youth, I was wooed by this kind of talk. Ooh. Aah. You know people. Whatever.

They can pay at least a deposit up front, right now or they can’t. Plain and simple. Put up or shut up.

Create your parameters and standards for the kind of deal you just won’t do.
Everybody’s different on these specifically, but I like to think everybody also has a soul. The deals of “what could be” can’t outweigh what’s in front of you right now in terms of attractiveness. Rather, you should feel like, “Wow, this is a very rewarding mutually beneficial relationship as is. And hey, on top of it, we might even receive (bonus here).” You should NOT feel like, “Wow, this deal really sucks for us right now as we have to take a lot less than we typically do. But oh, if it works out, we’ll be neighbors to Richard Branson on his island with all the money we’ll make.”

Yeah…good luck with that latter scenario. Really. I hope it works out. I just wouldn’t expect it to at all.

This is why I don’t make “scratch-my-back-first” deals that involve me working for pennies for people who use the phrase “skin in the game” or “sweat equity.”
I don’t deal with people who try and barter rather than use dollars – the math doesn’t work cleanly.
I don’t deal with people who try to make back-end-percentages sound alluring when they mean zero dollars now. That’s playing in Fantasyland.

These are all nice ways of saying they have no money or not nearly enough.

It’s not just a financial standpoint. It’s a moral and ethical one for me. It’s who I am and what I believe in. It reflects the people I’ve had good experiences with and the not-so-good experiences.

Similarly, what have your experiences taught you about the situations you’ll never, ever re-enter?

You have to use your own BS Detector for these red flags to have some respect for yourself. The more you choose to engage round after round, the more you choose to be beaten up beyond what you deserve. REMEMBER: It’s your choice to negotiate and haggle. There are two parties that are necessary for that to occur in the first place.

When you decide the point of where enough is enough, you are taking back control of the process.

This is a part of what your brand stands for vs. those who will take anyone that moves and subsequently charge less than you to make that happen. They have no brand. They are just faceless, ordinary vendors providing a service like anyone else at that point, merely blending in with the rest. They will argue that they’ll get the business, but when it’s that ridiculous of a discount, they’ll have to work that much harder for that much less profit, over and over again until it’s a debilitating cycle. Does that sound like winning to you?

If that’s not what you want to be, it’s time to know when you talk the talk and when you have to walk the walk. For your brand. For your financial success. For your balance.

Keep this in mind and live by it with confidence. I’ll consider you a winner before negotiation even starts.

Prospecting: Separating The Believers From The Non-Believers

This scene from Mad Men sums up an important point for me about prospect relationship building.

There are Believers and there are Non-Believers. The difference is easier to spot than we make it.

As Don Draper says when explaining an ad campaign, “You either have it in your heart or you don’t.”

Let’s apply this to new business relationships. As we know, prospecting for the complex sale can be sophisticated, time-consuming and take many “touches” before an actual invitation occurs to be face-to-face with someone. Getting through that door isn’t often a one-time effort unless you’re in the right place at the right time.

But now you finally get that first meeting – it may come from your initiative or them finding you. They invite you in to learn more.

Here’s where you separate The Believers from the Non-Believers.

By the end of your first meeting, after you’ve discovered enough about the challenge before you do an even deeper dive and they’ve learned a solid amount about you, you should have a good sense of whether the person wants to have a relationship with you. They believe in you or they don’t. If they don’t want to move forward, so be it, but at least you know. If they do want to move forward, are we talking the details of a relationship in our second meeting or are we shooting the breeze?

This isn’t decided by logical factors. This isn’t a tally sheet of points on an RFP (Oh really? You’re going to tell me I just missed out because I scored a 94 and my competitor scored a 97? Riiiiight.).

For all the laundry lists of virtue that agencies throw out there (experience, creativity, number of employees/locations, awards), these have value – but none of them are exclusively own-able.

Relationships are emotional decisions. They go with you because they like you. And if they like you, they believe in you. And if they believe in you long enough, they refer you.

That last one is important. If they’re not referring, they like you but don’t like you enough.

Let’s take a look at the typical pattern: You meet. You greet. Both parties get to know each other. If it makes sense to do so, you present / quote.

Then what happens?

Sometimes it’s a “We’ll get back to you.” “We’re still thinking about it.” “So and so is on vacation.” “We’ve got a fire to put out in the next few weeks but we’ll get to this.”

We’ve all encountered a response like this in some fashion or another. It’s not that we’re necessarily bad presenters or that it’s all on us. It just might be that they’re not equipped to make change. The key word is “make.” Some companies don’t want to make change. They just love the IDEA of change. Because that’s safe and even romantic to think about. There’s no risk with an idea or merely talking about what could be. So they talk and talk and talk and want to meet with you over and over and over again. You keep getting lured in (“Oh wow! They’re bringing us back in for the fifth time! They must be really close to making a decision!”).

And that can’t happen. Because you go from being potentially paid consultant/agency to free therapist.

People who want therapy are not serious prospects. They are Non-Believers. If they are stuck and you have presented what could be a smart, strategic way out of being stuck, they should not be comfortable with where they presently are. You are taking them to a place outside of that Comfort Zone, yes. But even in their slight discomfort, The Believer knows that this is a vital and important thing for the company, not something to be feared.

It should take no more than one meeting for a person to not only believe change is necessary but that it has to happen now. It should take no more than two meetings for that person to believe that you are the right person to enact that change.

Beyond this, you need to ask yourself if you’re dealing with a serious prospect or a tire kicker.

I’m not proud to admit it, but on more than one occasion, I’ve had a prospect I’d met and spoken with several times before keep me on the phone for an hour talking about their problems. That was stupid. There comes a point where you must say, “You know, I’d love to continue this chat but I typically bill people beyond the ___ minute. Is that something you’re comfortable with?”

You have it in your heart or you don’t.

Think about your favorite brands – what do they have in common about their customers? They’re more than customers. They’re giant fans. They’ll defend that brand to no end. They’ll come back again and again. They’ll tell others how wonderful that brand is.

They Believe in that brand. There is no middle ground. No Semi-Believers.

This doesn’t stop when they become clients.
Are we wrong to want to strive for Believers in our agency in a collection of clientele? I don’t think so. Imagine your agency with 100% Believers. Every one of them loves you. Trusts you. Refers you business and/or might very well be open to doing more business in the right circumstance. Can’t say enough good things.

What’s that? Some clients don’t do that? Which ones? Why? How can that be improved upon from here?

Of course this doesn’t mean they’re going to blindly agree to everything you say and do. Of course they’ll question or suggest changes. That’s normal. There’s a difference between sharing opinion and dictating, “This is what I want the ad to specifically say.” The former is still belief. The latter is not.

Believers want to be led, guided and educated. They are inspired to act now. They don’t want to just talk about it over and over and over. They don’t pretend to know everything or better than their own customer. And they see you as the expert that you are rather than being dragged kicking and screaming into new ideas or new technologies.

Look, some people just aren’t ready to go forward when the time comes. I can respect that, but you also have to have respect for yourself. The first and incredibly important step of liking someone isn’t something you have to think about over a period of several meetings and months. You just know it the first time. And you know what the concrete next steps are as a result.

You either have it in your heart or you don’t.

Is There A “Chicago Style” of Business Development?

Note from Dan: Today’s Chicago Brander post is from guest blogger Steve Congdon of Thunderclap Consulting Group. Drawing on the experience of over 200 pitches, Thunderclap helps marketing communications agencies and other professional service firms win more new business. I’ve had the pleasure of meeting Steve and find his blog a must-read for anyone seeking a better way to get into more pitches and improve their close ratio. Call him at 773.637.5203. You’ll thank me after a conversation with Steve.

Steve Congdon, Thunderclap Consulting Group

When you think Chicago and personalities, what comes to mind?
A what-you-see-is-what-you-get kind of mentality? Da Bears? An Everyman quality? 
Is there a Chicago style of prospecting and salesmanship?
And, if there is, how might be it applied?

Here are three quick thoughts:

Get belly-to-belly.
No matter what is being sold, conversations lead to understanding, which can lead to sales. In my world, ad agency new business development, going belly to belly could mean exchanging a phone call with an in-person meeting. Or, adding a social event to the pitch process that augments your understanding of “your prospect.” The more you know you know about these people, the more you can understand if you want them as a client and how to make that happen.

Work a bit harder.
For brand stewards, this can mean offering up something free.  For business development professionals, it could suggest doing something unexpected, but helpful for your prospect. Like, for instance, writing up an analysis on some competitive activity. Or sending an email past 9p with a relevant link to a cool online story.

Be real.
Another Midwestern trait. For now, let’s define this as being yourself. Can you imagine George Wendt making a stiff, formal presentation – using huge words that tie him up, making both him and his audience uncomfortable?! Nah. It’s just not his brand.

While I honestly think there may be some positive qualities that prospects might be willing to apply to you when you associate yourself with a “Midwest” or Chicago label, these are more likely to affect business success early in the sales game. By that, I mean the label creates perceptions before you even meet someone. Not a bad thing. Certainly nothing “second” about it, (he wrote proudly).

And, of course, you don’t have to be from these here parts to try any of the above. I happen to know people from both coasts who are very nice, despite wanting ketchup on their hot dog.

So what do you think? Is there a “Chicago Style” of business development? And if so, what are those traits?