This RR discusses how commission breath impacts the final terms of an agreement. I wrote a previous RR on commission breath and how it affects your ability to sell. For reference, it is reprinted at the end of this rule.
All skilled negotiators know that the best time to ask for a concession is right before signing the contract because they know that we are already spending the commission (commission breath). It puts pressure on us at that make or break moment, and we have to decide if we want to jeopardize the deal by not conceding that final request, which often times is not the final request.
I conduct monthly calls with most of my clients to discuss deals. During one such call we discussed a situation that I have seen many times before and believe that many of you have experienced during your career. The proposal and the presentation went extremely well and the prospect gave all the traditional buying signs. The sales team was confident that they had this deal. It was a huge deal for my client and a game changer for their business. Then, in the 11th hour, the prospect asked for a major concession. What would you have done? My client balked and told the prospect that the request was unreasonable. The prospect said that making the concession would go a long way in helping him make his decision. My client conceded.
What do you think happened next? The prospect said, “Let me think about it.” Does any of this sound familiar? After a few days, the prospect called my client and asked for another concession. Yikes! Now what? Now you are on that slippery slope and all the mouth wash in the world will not get rid of that awful smelling commission breath. What would you do now? I’ll tell you what I advised them to do in a moment. But first, let’s analyze the mistakes that were made that led to this problem.
Mistake #1. – Early in the process, the requested issue, (fixed pricing for the life of the contract) had not been identified. If it had been, the entire financial offer would have been different. This mistake was problematic, but not fatal.
Mistake #2. – Revealing their eagerness (commission breath) to make the deal. Also, not fatal.
Mistake #3. – When the decision was made to concede, it should have been a contingent concession (another RR). You make a contingent concession by saying, “If I can get my company to do this, will you sign the contract?” Better yet, tell the prospect that it would be easier to get the concession they are asking for, if they sign a contract contingent upon the concession. Then you can go back to your organization and show them a signed contract.
Mistake #4. – The request was not isolated. You should always precede any request or objection with the words, “Other than that?” If you don’t, you will find yourself being nibbled on so much that you will resemble Swiss cheese.
What now???? Here is what was decided. Withdraw the offer to increase the perceived value of the offer. The prospect was told that because the economy was in such turmoil that it would be necessary for us to re-visit the financials and that the likelihood of the offer being not as attractive, was very high. They were given a grace period of xx days to accept the offer on the table. Now, the ball is in their court and some semblance of control was regained.
Ray’s Rule, “Commission Breath” below:
Do you have commission breath?
What is commission breath? It is a feeling of desperation or greed? And the customer can smell it. What causes it? Poor sales results, or a callous disregard for the client, are two of the main causes of commission breath. How do you get rid of it? It is easy. Sell more! “Ray, if I could sell more I would already be doing it.” Oh, it is not so easy after all.
When we are in a slump, our results become a self-fulfilling prophesy. We are too eager and the client smells our eagerness. We are pushing when we should be pulling. Think reluctant seller. When you appear reluctant to sell me something, I tend to want it more. When you try too hard, I wonder what is wrong with your product. Also think EBP, Equal Business Partner. The relationship between buyer and seller should be one of mutual respect and mutual benefit.
If you have commission breath because the only thing you care about is the commission, seek another profession. Every great seller I have ever met has walked away from a deal that he/she felt was not a good solution for the client. You are only as good as your reputation. Focus on the client. Understand their needs and criteria. Practice until confident. Have a full pipeline. Seek help from co-workers or your manager. Asking for help is a sign of strength, not weakness.