Last week I crashed a Battery Ventures hosted cocktail party at the VMWorld conference. Situated on the 4th floor of the St. Regis Hotel on the Yerba Buena Terrace, a gaggle of smart, sophisticated people from micro-business to mega-corporations engaged in hobnobbing and networking. It was a terrific event and I made some great contacts.
I met a guy who told me a great sales story that I wanted to share with you. It reminded me that no matter how hard we work or how much the client wants to buy, there is always something or in this case, someone who can come in at the last and screw everything up.
There is a point in every sales cycle where it might make sense for either party to "walk away". That's one of the reasons why I advocate a ruthless qualification and discovery process. If the deal is not a fit for you or your customer, figure it out early on! In any case, as a business person, it is important for you to think about possible points of separation. Price, delivery and exclusivity are good examples of possible "show-stopper" issues.
Mike Cardinal, GM of ThinLaunch Software, used to sell software development services. He was prime on selling a project to create an IT asset management system for a global bank. He and his team executed better than their competition, demonstrating their understanding of the requirements and their ability to deliver above and beyond. Mike was aligned with the executive decision maker, who gave him verbal acceptance on the $500,000 proposal and escorted him to Purchasing to "wrap everything up".
The gentleman in Purchasing had other ideas. After going through the contracts with a fine-tooth comb, the guy looks over and says, "last thing...we have a budget gap and we need you to come in at $450,000." While it was a surprise ask, Mike had a good response in his bag. Why not discount 10% to get the deal? "It was a matter of principal...and we had executive buy-in on our solution", says Mike. So what did he do when the purchasing agent gave him the "take it or leave it" offer? He picked up his stuff and told the Purchasing guy, respectfully, that the terms were unacceptable and he would be able via phone on his way to the airport if anything changed.
Would you have the guts to push the eject button like Mike did? It goes to show how important it is to be inside your customer's head! Buyers today get more formal training than we salespeople. They are often compensated based upon the % of savings they can drive through contract negotiations. So just be prepared for hard-core tactics throughout the process and especially for "nibbles" at the end.
When Mike's plane landed, he checked his voice mail. There was a message from the executive VP apologizing for the tactics and confirming that a purchase order for the full amount had been faxed to his office. Mike's story is as inspirational as it is educational - thanks again for sharing with us!
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