THE WALK AWAY POINT IN SMART NEGOTIATING

Never fear to negotiate but never negotiate out of fear 

President John F Kennedy

 If you are too anxious to close a sale, you lose your ability to say NO to unreasonable buyer demands. Don't place yourself in a position where you accept a less than satisfactory outcome, just to close a deal.

Your willingness to walk away can help you to close a sale. Here's how:

Walking away may force the buyer to soften its position.

Did you have a customer ring you up in the office and telling you "... last week we met could we reduce the price by just 10% and you can have the order..." You are excited and want to say yes but you keep up your guts. You counter "... I will reduce the price by 10% only if you double the order..."  And wow presto he agrees. You have lot of pluck you say"... could you send me the email today so I can get the sanction from the boss before he leave for tour for a week..." (all in your imagination) And lo and behold the email arrives!!!

Seems highly optimistic and ideal... but what if you said YES to the first "generous" offer from his end. This would be THE END 

Your willingness to walk away demonstrates your commitment.

Savvy negotiators are always testing you to see how committed you are to your position. In order to convince them, you may have to resort to strong measures – including walking out. Otherwise, the buyer may continue to believe that you will offer more concessions. When the buyer sees that you are totally committed to your position, he will back down and you will close a profitable sale.

This lesson was lasered onto my consciousness during my sales career, when one of my prospective clients reneged on a promise to sign our contract. Without saying a word, I packed up my briefcase and walked out of his office.

"Where are you going?" he called after me.

"I'm leaving," I said. "You lied to me and I don't want to do business with you."

He chased me all the way to the elevator bank and begged me to return. He knew he had pushed me as far as I would go, and he agreed to sign the contract.

Afterwards, he asked me, "Ed, if I hadn't followed you, would you have come back?"

"I guess you'll never know," I told him.

Walking away can help the buyer sell your position to their boss.

Buyers may have to justify their concessions to someone higher up on the food chain. Now they can tell the boss, "See, we had to make those concessions or the seller would have walked away from the deal."I am not saying that you should always walk away from a sale. But if you don't even consider the option of walking away from the negotiation, you may be inclined to cave in to the buyer's demands simply to make a deal.

You must be prepared to say "Next!" or your customers will sense your uncertainty. The willingness to walk away from a sale comes from having other potential sales in the lineup. When you know that your sales career doesn't hinge on this one deal, you can exude confidence. If you are not desperate – if you recognize that you have other options – the buyer will sense your inner strength. Your willingness to walk away is one of the greatest bargaining chips you have.

 

Negotiation Walk away is the alternative that a negotiator will act on if they are not successful in a negotiation. A walk away may be an alternative supplier or buyer, to manufacture the product or deliver the service in-house, to wait or simply do nothing i.e. to go without. The walk away answers the negotiation question: “What will you do if you don’t agree this deal?”

 

Some good Reasons to Walk Away from a 

Negotiation

 Reason 1 You only have one contact in the account and this person won’t let you speak to anyone else.

You’ve ended up being trapped by the gatekeeper. This is usually a person with the responsibility for procuring a product or service on behalf of others within the organization but they don’t actually own the business problem themselves. This makes it hard if not impossible to sell on the basis of value. Their job is usually to get the best possible price for a solution that meets a minimum specification. He or she doesn’t want you to talk directly to line of business managers as that would allow you to position the strengths and advantages of what you offer, and why it’s worth paying more. If you can’t find a way to speak to at least one person who actually experiences the pain or would see the gain from addressing the issue in question, then walk away.

Reason 2 A competitor has obviously written (or helped to write) the RRP / specification.

There are always tell-tale signs when one of your competitors has helped write the specification. You’ll find requirements written in a way that makes it very hard for most vendors to meet – with the exception of the competitor of course! If the buyer is this far along their buying cycle, you’ve missed the opportunity to influence their thinking, and winning the deal is going to be a long shot. Many software and hi tech equipment manufacturers have a no bid policy for ‘blue bird’ RFIs and RFPs (i.e. the opportunities that sales people only find out about when the RFI / RFP arrives in the mail).

Reason 3 A customer already has a product or service similar to yours and you can’t identify a compelling reason for them to change.

You’ll come across some people in business who will engage and talk and talk for hours and hours – because they have a particular interest in a given area or they want to find out what’s available in the market. As sales people, we like talking to people who like talking to us! Unfortunately, this type of ‘buyer’ can be a huge time sponge. The key here is to get them to identify a clear and compelling reason to change to your solution from what they have now. Then you have to get them to sponsor you to another decision maker or senior influencer to test this reason out with them. If you can’t do both these things you have to politely disengage.

Reason 4 There’s no budget allocated for the project and you haven’t been able to identify a business challenge your solution addresses, with sufficient upside.

Just because there’s no budget currently allocated doesn’t mean you walk away from the opportunity. Some of the most profitable sales come from situations where initially the customer hasn’t fully recognized and quantified the business challenge they face and don’t yet have a budget allocated for a solution. You have to get to the senior people in the organization who own the business issue and work with them to put a number on what it would mean to solve the problem or take advantage of the opportunity. However, if that number turns out to be too small to make the business case, then there is no opportunity for you.

Reason 5 The opportunity is too small to warrant the sales effort.

As sales people we are hard-wired to go after any opportunity where it looks like there’s an easy deal to be done. We forget there are only 16 working hours in a day (only joking) and we have to focus on the deals that are big enough to get us to quota and beyond. No matter how low hanging the fruit appears to be, all sales that require a sales person to close them will take time to take through the sales process – especially when it’s a new account. You have to ask yourself, is the margin on the deal worth the time and effort?

Reason 6 Your product or solution is a poor fit for the customer’s requirements and will require extensive customization or development effort just for this account.

We’ve all heard stories of the sales person who used PowerPoint to add a new field or button to a screen grab of a software product, to indicate that a certain feature is available! Usually, of course, the promise to develop new functionality to win a large deal is made with the full knowledge and support of senior management. As sales people, we could take the view that if we can persuade management to go along with this then we’ll get the deal done and the commission in our bank account! However, projects sold on the basis of huge one-off development work are rarely delivered successfully and often turn into a financial black hole. If we’re interested in building profitable, long-term customer relationships that deliver ongoing commission for us, we have to resist the temptation to sell what we don’t yet have! We can either persuade the customer that what we offer is so valuable they can do without the feature we don’t have, or we can walk away from the deal.

CONCLUDING

 We’ve been looking at negotiation skills that set extraordinary salespeople apart from average ones. Nobody wants to walk away, but you must be comfortable in doing so at any point during the negotiating phase. More importantly, the other party must know you’re comfortable walking away.

Yes, the next step is negotiating with the other person, but that does not necessarily mean you should. Before you enter into any negotiation, you must know what your walk away point is and be comfortable at doing just that – walk away should the need arise.

Far too many negotiations are not completed well, due to the salesperson giving away too much. Keep in mind that sometimes the most profitable deals you’ll ever negotiate are the ones you don’t complete. By this I mean that it is best to not attempt to negotiate a deal where the outcome is simply not going to be beneficial.

The point at which you will walk away is something for you to merely keep in the back of your mind. You have to be careful to not simply default to a level slightly above your walk away point. In fact, you want to reach an agreement that is nowhere close to your walk-away point.

I can’t emphasize enough why you need to hold firm to your walk-away point.If the customer gets any sense that you will not actually walk away when you start to end the discussion, they will simply push aggressively to get you to give them a better deal.Your goal is to never have to walk away, but at the same time, should it be necessary, you must be able to do it confidently.