Tag Archives: New business development

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.

You May Be Your Best New Business Salesperson.

So let’s say you have a relatively new business that’s no more than 1-2 years old. Things are progressing nicely and you’re making a decent amount of money. Maybe you aren’t quite yet jumping into a pool of it like Scrooge McDuck, but you’re doing OK for yourself.

Still, the challenge of filling the pipeline becomes a regular thing in your mind. The conversation with your team becomes, “Maybe we should hire a New Business Salesperson.”

Hey, that sounds intriguing. Someone who can get out there and sell for you, huh? You can focus on the work you’re doing and another person can head out there to make it rain.

It’s a great idea in theory. And it’s not to say it’s impossible. But here’s the two choices you’re most often faced with:

Ronnie Rainmaker 
What’s that? Yeah sure, you bet I can bring in the big bucks. I worked in tons of industries and had a lot of success. Maybe not this one exactly, but I know what I’m doing. I don’t think I have to know a ton about your business. I get it. You’re what, an ad guy, a social media guy who does a lot of this, uh, Facebook updating for people, right? Sure, fine, whatever. You just do your thing and I’ll do mine. Since I’m so awesome, you need to pony up the big bucks for me but you’ll be glad you did.

Two problems with Ronnie:

1) The extraordinary amount of money he costs until he proves he can deliver the goods

2) He could find you a bunch of clients and think he’s doing incredible when in reality, the ones he’s finding are not the greatest fits for who you want to reach.

In his defense on the second point, that’s your fault, not his. You have to define precisely who you want to attract, who you don’t and how you’re going to reward him for more of the cream of the crop. This is as much a branding exercise as it is a sales issue. If you don’t know how to position yourself in terms of who you definitively want to work with – and it’s not that “everybody who needs my services” bullcrap –  you will be leading Ronnie on a wild goose chase and financing every mile for him.

Commission Carl
You don’t have to pay me much of a draw or even any draw. All you have to do is pay me a handsome commission for what I bring in. Isn’t that a great deal? Nothing out of pocket for you other than what I bring in! What’s that you say? Experience? Well, I sold flat screen TV’s at Best Buy so I’m really good at moving product and connecting with people. That’s what it’s all about and I’ve been doing it for decades. So what do you say?

At first glance, it sounds attractive for an entrepreneur. Not much risk there, right? Nothing lost, nothing gained. Except for one thing – again, if you want to improve Carl’s chances of success, you have to guide him on what your brand is all about. He has to understand the brand forwards and backwards for every prospect challenge. He has to understand your audience and what methods play well with them. If you’re in the business of Internet marketing, you probably don’t need him to knock on doors at his country club. This is so much easier said than done, it’s not even funny.

There’s just got to be someone who really gets you, gets your brand, gets who you want to speak with more often and knows precisely where you want to go.

I’ve got just the person. Grab a mirror and look at it.

What we often don’t realize about New Business is that we don’t give ourselves enough credit or see the potential we already have within ourselves. You see, there’s nothing more authentic or rewarding than knowing that you are delivering your message in a way that feels right and to the right person. This isn’t egotistical to say. If you truly have a command of your own message, who could be more powerful of an advocate than you are?

“But I don’t have enough time to do New Business. I’ve got other things that need to get done.”

Sure, I understand that. But do you think you can just give most salespeople a little instruction in a “set it and forget it” kind of way? I don’t buy that. They require guidance, collaborative planning and accountability measurement from you on a regular basis so that as a team, everyone can be on the same page consistently. That takes an investment of time too.

The middle ground can often come from better coaching and training.

This is where the rubber often meets the road. I’m certainly not immune to this challenge, which is why working with a sales coach like Steve Fretzin of Sales Results, Inc. can help ensure you’re disciplined in your activities and meeting with the right people rather than just tire kickers.

Are you with me so far? Think you have it in you to change at least a habit or two? What about as many as seven bad habits?

I think you can be committed enough to spend just two hours and a hair over $20 to find out.

If you’re in that camp, read on and join us on Wednesday, June 12th from 8am – 10am at 180 N. LaSalle as Steve and I present:

SELLING IS FOR LOSERS:
Seven Reasons to Change Bad Habits

Forget all the outdated “sales-ish” methodologies. Forget sounding like a used car huckster. Selling can be easier and even, yes, fun. Here are a few of the negative questions, assumptions and frustrations we will be solving in our interactive workshop:

· Why the traditional model of sales has failed
· Why social media “doesn’t work fast enough”
· Why you may be measuring social media success improperly
· Why your prospects are only buying on price
· Why you’re perceived the same as everyone else in your field

It’s a limited seating event, so if you’re committed to finding out just what kind of sales you can obtain on your own before blowing a large amount on Ronnie Rainmaker or hoping for the best with Commission Carl, this is the event you don’t want to miss. Mark your calendar for the morning of Wednesday, June 12th from 8am-10am at 180 N. LaSalle, Suite 3700.

Follow this link to register:
http://www.eventbrite.com/event/6528124797