Stomach knots, table banging and other good signs August 5, 2010Posted by Bernard Lunn in Enterprise Sales.
If you sell the big-ticket deals, you don’t need that many to make your numbers. These deals also take a long time to get to closure, almost never less than 3 months and often 12 months or more. By the time you get into the “closing zone” you and your teammates have expended lots of time and energy, your company is relying upon you to close the deal and you are starting to think about what you will do with the commission.
This is an exhilarating, scary and dangerous time. Exhilarating because you are close to a big “high five” success. Scary because if you lose at this point when you can almost taste the success, it will be a bitter disappointment. Dangerous because a smart buyer can easily exploit your intense need to close the deal and thus win major concessions.
Donald Trump (the real estate developer) in the Art of the Deal, talks about getting the other side to the stage where they really want the deal and think it is in the bag. Then he backs off and demands major concessions. Smart buyers everywhere have learnt some variation on these tactics.
So this is when you get a knot in the stomach and you might start to witness table banging and hear raised voices. All this unpleasant stuff is good news. Experienced deal closers recognize these as signs that a deal is closing. The absence of these signs is actually a cause for concern!
One consistent thread in all negotiations is that you must see some sign of real pain from the buyer in order to be confident that you are not leaving too much money on the table. Of course the buyer knows you will be looking for this and will be sending the signals that you have reached the limit. The skill comes in differentiating between fake pain as in “this is well above our budget and my boss will kill me if I agree” with the real thing. The buyer is also looking for the same signs from you.
Losing your temper is usually not good. It implies a lack of control and usually signals fear and weakness rather than strength. However sometimes it can be very effective. It worked for me once at a critical point in the middle of a complex contract negotiation. The buyer was a large bank, we were a small vendor and our competition was the obvious “you never got fired for buying XXX” in this market. Our sponsor got board approval to negotiate with us but only if he used a very tough lawyer, who had just published a booking on negotiating software contracts, to tie us up in knots and ensure no risk to the bank. After days of intense sessions arguing about tortuous legalese I had finally had enough. Without thinking I stood up, banged the table, raised my voice and made it clear I was pretty pissed. I am fairly big guy and at it’s most elemental this was physical intimidation. Things got a lot easier after that!
Negotiators use many tactics to simulate the table banging without killing the deal. You can use good cop/bad cop, or the “my intransigent boss will never agree” or you can use a stalking horse to lay down a negotiating line.
The tactics will depend upon the specifics of the sale, but the common thread is that when the stomach knot gets tight, you are probably in the closing zone and that is good. We were engineered for fight or flight for a reason!