- 10 Tips for Landing a Product Licensing Deal - November 23, 2021
- 10 Negotiation Techniques to Make You a Better Entrepreneur - September 27, 2021
- 12 Keys to Family Business Success - September 21, 2021
A deal usually has several parts: the hatching of the idea by one party, its conceptual embrace by the other side and finally the closing. In most cases, the first two phases of a transaction or sales cycle are much easier than closing a sales deal.
Sealing a deal (because of the prospect that it might fall apart before you get to that point) can put a lump in the throat of any small business owner.
Yet, there are ways to make yourself a better “closer” even if you’re not the natural schmoozing type and aren’t up on the latest sales techniques. You don’t even have to have ice water running through your veins.
Ideas for closing sales deals
Get beyond yes: Time is your enemy. Once you’ve gotten your target to agree in principle that you’re going to make this deal, move them as quickly as possible toward getting it into writing. That’s because common sales problems like second thoughts, competition and unforeseen events can creep into the narrow opening between “yes” and signing on the dotted line. If you get a verbal expression of interest, move resolutely toward a verbal commitment, then as quickly as possible to a written agreement that hopefully closes out the sales cycle.
Create a sense of urgency: Sometimes the person on the other end of the deal will be happy to close it, when they can get around to it. Timing may be much more important to you. If necessary, you want to create a sense of urgency to get their commitment, and that may require some final concessions to refocus their attention. This may involve offering a 2 percent greater discount, net-30 terms instead of net-10 requirements, or offering a two-year service agreement instead of one-year coverage. You’ll know what it takes.
Use the threat of competition: Unfortunately, in order to get the other side to close, sometimes an entrepreneur will have to state that if they don’t do the deal with you, you’ll do the deal with someone else. Sometimes this involves bluffing, sometimes enhancing the appeal of what you’re offering. But if you can convince the target of your deal making that you’re doing something that’s going to become powerful, everybody wants a piece of that.
Generate late-breaking news: Throughout the relationship-building and negotiating process and beyond, always funnel helpful, new information to the other party. This might be a press release about a new product, a copy of a story about your business that you’ve managed to land in the local newspaper, the result of a new independent test of your service, or that one last testimonial from an existing customer that you’re keeping in your back pocket.
Be prepared to not close: The reality is that most deals don’t close, if you measure by the number of potential relationships and transactions that your company pursues. Something happens, there isn’t a fit or the timing isn’t right. You must disdain losing any deal and fight hard to land every last one. But you also need to be sober about the percentages so you can raise them.
Related: Tips for Closing More Sales
Closing must be organic
Of course, every deal worth its salt must not be lopsided – it should stem either from mutual compromise or a true “win-win” scenario. And empathy goes a long way.
Here’s how Raymond Gunn, managing partner of entrepreneurial consultant Wingspan Partners, in Shelby, Mich., and a veteran closer, views these issues:
- “The deal is actually closed before the deal happens. Courting and building relationships over time are the only guarantees of succeeding in closing a deal. And that can take years.”
- “Be the best listener you can. Hear the other guy’s pain; what can you do to solve it? And if there’s pleasure you can add to his equation, focus on that.”
- “Tricks aren’t good: If you need them, you’re not in position to close anyway. Create true value. That’s what will help you sell faster at the price you want.”
Our bottom line
The last thing you want to have happen is to see your hard work throughout the sales cycle come to naught, so learning the sales techniques you need to become a more effective sales closer is vital. Closing is like eating your spinach. It’s something you may hate to do, but doing it well can be the strength of your business-development efforts.