As you may remember from part one of this series, Gaining and Maintaining Positive Leverage, I had the opportunity to join Kison Patel, CEO, and Founder of M&A Science, as his guest on the M&A Science podcast earlier this summer. Kison and I spent over an hour talking about negotiation strategies and tactics in an episode titled, How to Negotiate Like a Pro. You and your team may gain great value from the strategies and tactics we discussed so have a listen and share with your colleagues.
In our practice, we use a tool called the Risk Reward and Action Matrix. Basically, the purpose is to clearly identify the drivers and inhibitors to a customer’s decision to act. This tool outlines the rewards (benefits) your prospect will receive by taking the suggested action (e.g. purchasing your solution) versus the risks incurred by not acting. And this is one of many areas where it is more important to ask the right questions than delivering a sales pitch. In fact, asking the right questions gives the prospective customer comfort and their answers should become a key part of your persuasive sales pitch.
The ability to ask questions is sometimes constrained by the fact that many business and sales professionals (including me) are type-A personalities. As such, our tendency is to get to the point, move the process forward and close the deal without undue delay. However, one thing I learned over the years is that patience and listening are two skills we must nurture in order to develop the portfolio of information that allows for accurate risk-reward analysis, as well as effective scenario planning.
We’ve all heard the admonition that we have two ears and one mouth because we are supposed to listen twice as much as we talk. While there is much wisdom here, no matter how well intentioned, when people are immersed in their own deals and facing pressure to make something happen, they can lose the ability to listen as well as they should. This is where situational awareness and professional negotiation training can be a strong asset.
Asking the Right Questions is a Superpower
You always have the opportunity to listen, particularly if you take the time to ask good questions. In the negotiation context, good questions start with curiosity. I’ll talk in a future article about how empathy is a business accelerator, but it helps to understand that empathy begins with curiosity, which is the fuel for asking great questions.
Your objective in asking the right questions starts well before you meet with your counterparts. It begins with research into their organization. You want to know as much as possible about what is going on in their industry, and more importantly, the drivers their company and the individuals you are dealing with are facing – what are the hurdles, what are the competitive pressures, what are the opportunities, etc. This research – much of which you can accomplish online – provides the context to make sure your questions are timely and relevant.
If you happen to be dealing with senior executives you can find plenty of online information to help understand individual motivations, which are often as important, or more so, than organizational imperatives. Perhaps the executive has taken over someone else’s job recently, or been part of a corporate shakeup. If so, what was the problem and why were they hired? Basically, I want to know two important things – first, what’s motivating them? This is the “why” question that is really about the current state. Second, I want to know the flip side of the why coin – their objectives and the desired future state?
The Importance of Discovering Objectives
The subtext here is that you want to understand how to help your negotiation counterparts achieve their most important personal objectives while serving the needs of the organization and their business objectives. If we are going to do a deal, it has to be related to enabling them to achieve that future state. This is true whether you are selling a product or service, doing an M&A deal, or hiring a new employee.
Relative to hiring, when I interview potential teammates, I often make more judgements based on the questions they ask than I do on the answers they give. I want to know whether they have conducted quality research about me and my company and possess the necessary levels of curiosity and empathy. I am also validating whether the candidate is able to convert this curiosity and empathy into a logical and structured set of questions. If you are hiring salespeople, it is particularly important that they demonstrate these skills.
One important point is that, while formulating and asking great questions is important, so is the ability to sit back, listen carefully, and overcome the urge to jump in with an answer. Every pause is not an opportunity to show your brilliance and interjections will often stop the flow of information you need to move the deal forward.
While it is important to ask the right questions, refraining from asking the wrong questions is also crucial. Generally, we should not ask questions that we could answer easily through basic research. For example: “What were your revenues last year?”, or “How many employees do you have?” Questions like these, unless placed in a thoughtful context (such as validation of a larger premise) will seem trite and can damage your credibility.
Canned questions that sound like they came from a sales training seminar are also a no-no. My least favorite of this genre is “What keeps you up at night”?
If you ask the right questions, you’ll find out soon enough what your prospect values most, and what it takes to move the deal and your relationship forward.