Negotiation skills 101 - say no more often
The Nuclear Option in sales negotiation
What the hell does that mean?
The cold war right - Soviet Union vs Uncle Sam. They never directly went to war with each, there was no hot war and the red army didn’t park its tanks on the White House lawn.
They couldn’t do this because Uncle Sam would have launched many, many nuclear weapons at Uncle Joe. The same applied the other way round because both of them had nukes and both of them believed the other side would use them if needed - they both had credibility.
So how does that relate to negotiating a sale?
Your nuclear option is to walk away. You can’t get screwed over unless you agree to being screwed over!
Imagine if you could never say no and everyone knew this. How terrible would your life be? I don’t even need to describe the horrors - you can come up with a thousand brutal scenarios.
When you don’t walk away this is what you’ll do
They’ll be able to smell your weakness, and they’ll keep pushing and you’ll make concessions.
Whether it’s a discount or you take on greater risk or whatever it is you’re the one swallowing the bitter pill.
It won’t stop there either because you think it’s just a one off but it really isn’t. Whenever you negotiate with these guys again, guess what?
They won’t see those concessions as this one time thing - no that’s our starting point. They won’t stop pushing until you stop them.
Plus people talk and if word gets around that you’re an easy mark guess who you’re going to attract as customers - the kind that love taking advantage of easy marks like you.
So don’t be an easy mark!
Saying no and being able to walk away and have that taken seriously is power. It’s the foundation stone of your negotiation credibility and strategy.
I get it, it’s scary to say no. The fear of missing out is strong but look if you’ve got a solid product and you work hard you’ll create more chances in the future.
So the next logical question is when the hell should I walk away?
Well first of all you have to define what it is you want out of the deal. You probably want a long lasting profitable relationship. Both sides want to benefit that can’t happen if you’re screwing the other side over but also if you’re being screwed over.
You want to be out ahead but leave enough benefit for the other side to maintain the relationship.
Therefore figure out what is the minimum benefit you want to derive before any relationship with the other side isn’t worth it and then don’t ever walk away from that line.
Once you surrender that line to the other side you surrender your credibility and you’re going to get a bad deal.
If you know the point where you’re willing to walk away is you will avoid getting into that situation in the first place.
When we didn’t walk away
Back in the very early days of RealtimeCRM we had this huge potential deal with this really big outfit.
They were going to add a ton of users and it was our first whale of a customer.
We were so happy.
But! They really wanted this one tiny feature that would be super awesome and make RealtimeCRM just perfect for them and you know it would help others too because it’s a super awesome feature.
We didn’t want to do it, it wasn’t in our product roadmap. It was bringing in complexity that we didn’t think was applicable to our user base and who we thought we were for.
The negotiations continued and they kept bringing this up and again and again. We got really uncomfortable and were sweating buckets because they were huge and we really wanted them onboard. We had to keep the lights on.
I’m not going to draw it out - we caved!
So we dropped everything and built product bundles into RealtimeCRM.
You want to know what happened?
NO ONE USED IT!
It had been rolled out and on the system for months.
That’s not even the worst part - The guys that requested it didn’t use it either.
I remember it well because we were in a meeting when we verified and acknowledged this.
Those weeks spent building it - wasted. The code debt which was added by product bundles and that we had to maintain - almost pointless.
So we informed our friends “Hey, you’re not using this, what gives?”
And they responded with some weak sauce reason.
It turned out that we covered their core needs but this product bundles idea was a “nice to have” that we allowed to become a big thing because someone thought they knew what they wanted but they didn’t really (we’ll come back to how to deal with this problem later on).
Anyway, we told them point blank we’re removing product bundles and we did. They didn’t leave.
In fact they made another request down the road that didn’t fit in with our product roadmap and we said no. They’re still with us to this day as a customer.
Had we stuck to our guns and said no, had we been willing to walk away and throw the ball back in their court we would have still won them over as a customer and we wouldn’t have wasted time and money on a feature that we knew made no sense.
Have your red lines and enforce them. Often times if a prospect is pushing for something that you know is not good for you then they’re likely not a right fit for you anyway or they’re throwing objections at you to get you to retreat.
There are people out there who when they negotiate they want to get wins but if you’re the adult in the room and you enforce your non-negotiables they’ll toe the line. They’re trying it on.
Just don’t be like we were and let fear dictate your actions even when you know they’re wrong.
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