While at the negotiating table, sometimes the rush to provide a client with whatever he or she has requested without discussing the value of the request is a study in blown opportunities. This is illustrated by a recent discussion we had with a client regarding the case scenario below.
Our client was in negotiations with a customer about adding some content to an existing contract. The sales team wanted to close it by end of May. The customer’s procurement organization was involved. In the first week of May, the procurement director stated: "We might be interested in closing before the end of the month." The sales person responded: "That sounds good. What will it take to get that done?"
Is this a good response? Not in our view. It automatically puts the sales person in a compromising and defensive position and devalues the customer’s request. Even if the customer isn’t fishing for a discount, you almost guaranteed that they will be unhappy to close without getting one.
A slightly better answer is "Yes, we can do that." Even that devalues the customer request. While the client could be "fishing" for a discount, it is also possible that there is a value to them by closing early. By telling them that you can close early without inquiry, you miss an opportunity to understand that value. Then, if you do close early, you will not get the benefit of providing value to the client. It becomes the equivalent of an unprincipled concession – giving something away for nothing.
The best answer is to ask the client why they are interested in closing early. If the customer has reasons that are valuable to them, you will get credit for providing that value by closing early. And no concessions will be required! If the client is indeed "fishing," it puts them in the awkward position of trying to justify the request. Even if they are bold and say, "Because we would expect a discount from you for closing early," you could then have a principled discussion of what closing early means to you and the client. You will gain an opportunity to establish value in the process. And the customer will know that any requests in the future will need to be justified and will not be dealt with in an arbitrary manner.
There are at least three lessons here:
Lesson 1. Think inquisitively about the question before you answer. Why are they asking? Simply asking this question can begin establishing value. Responding yes or no usually doesn’t do that. A no sets up unnecessary contention and yes foregoes the opportunity to establish value for a client request.
Lesson 2. Think about the client first. In the first response, you may be thinking: "What do I have to do to get them to close early?" In the second, we may be thinking: "Great, both of us want to close early." Only in the last are we definitely thinking about the customer first, by asking why they want to close early. And this is where we actually avoid having to make unprincipled concessions.
Lesson 3. There are few opportunities to get the client to ask for what you want or can easily provide. Asking "why" puts the customer in a position to justify their request based on some value to them. In that case they are less likely to ask for a concession to make it happen. And the double win is – it’s of value to you.
Lesson 4. Let the customer earn your concession. Asking "why" makes sense even if the client is offering to close early because they are fishing for a discount. By asking why and discussing the merits of any "compromises," you establish that you will not discount or concede without some business justification. Now you must find that business justification related to value. Remember: principled concessions are concessions made for good business reasons usually related to value to one side or the other!