Hold, Fold, Walk Away or Run?
I’ve recently been negotiating a deal with an organisation that needs help and the skills that I can provide. It’s been a good review of how I go about assessing client needs, how I react to stimuli and finally, on how far to go to accommodate people.
This client clearly had a need that I knew I could satisfy and had approached me (not the other way round). My method when negotiating with a client follows this pattern:
- Get the client to describe their problem or need;
- Understand what the client’s problem really is (I may have to re-state it);
- Get the client to articulate what they think is the solution;
- Understand why they think that is the solution - I may agree, otherwise I…
- Guide the client to what they really need based on careful analysis;
- Agree the specifics or deliverables with them;
- Agree price.
If I don’t find out the problem, what they think the solution is, what the solution actually is and any constraints, I won’t be able to quote a price that works for the client and me. In other words, the “Win-Win” situation remains elusive.
As we negotiated over the course of the month (the “hold” part), despite agreeing on the solution, the client kept introducing new problems and changing the deliverables, leaving me unable to finalise price. In the end, it turned out that the to whom person I was talking didn't have the authority and was reporting to a committee who kept changing their minds, and therefore the deliverables that they needed.
In short, we couldn't nail down specifics, so I couldn't quote a firm price. They kept asking for lower pricing, which made me start wondering whether the solution was the issue or price. I started wondering how serious they were. This was the point at which I started thinking it might be time to “fold”. Warning sign: client starting to “nickel and dime” means they may not be focused on the solution.
Luckily, I found out what their budget was, so I was able to propose a solution that worked out at slightly below budget. I sent them a revised specification with a week in which to respond.
The client missed the deadline and then came back with a further significant change. I sent out what I could agree to and the cost of follow-up that would apply. This deal was now taking time, but resulting in no progress. I could have been spending that time more profitably selling to others. It was at this point that I decided that it was time to draw a line and that I had to “walk away”.
When negotiating with others, we often focus on getting the business at any cost, without really considering what it means for us. My time in customer service and relationship management showed me time and time again that, when the warning signs appear, it might be time to walk away. Who knows, when the opposite party sees you're prepared to do this, they may realise what they’re missing.
Successful organisations have clear guidelines on what counts (for them) as “good” business. It may be as simple as “We must make at least a 20% margin”. This experience certainly made me reconsider my own “guidelines”.
I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world running different operations and lending businesses, I started my own Consultancy to offer solutions for improving performance, productivity and risk management. I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services. For strategic questions that you should be asking yourself, follow me at @wkm610.
Labels: Financial, Selling, Strategy
posted by William Martin @ 13:17
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