I regularly close business deals especially in the real-estate market sector. I like to think of myself simply as a Connector and in the last 8 years I’ve closed a wide variety of business deals from long-term leases to multi-million dollar joint venture development property deals.
So of course I make a decent living out of doing these deals but more importantly, I love sitting on the negotiating table and watching the subtle nuances and power-plays that goes on in every business transaction as it unfolds. It’s like a game of poker, every move signifies something. That’s if you know what moves to look out for.
A well-told story which has been shared countless times is of a company that had a problem with one of its equipment and the in-house maintenance crew couldn’t seem to fix it. So they called in an old retired work man to have an assessment.
The guy comes in with a spanner and an invoice. He looks at the machinery, taps a part of it with a spanner and it roars back to life. It is working perfectly.
The old man writes an invoice for £100 and hands it over to the manager. The manager asked incredulously, “What?? A hundred pounds just to tap the boiler with your spanner?”
The old workman calmly replied, “Tapping with spanner is £5. Knowing where to tap is £95.”
I find that there are 3 key aspects to deal-making or negotiating:
Information is key. You need to know something the person on the other side of the table doesn’t and needs. Now you trade on that information and make it appear as valuable as you can. Value is largely subjective, so as I’ve now discovered, the less you know about a subject, the more you are prepared to pay for it knowledge gap.
Many women I know will pay a higher price on a car purchase and on car repairs than many men would. The car salesman and mechanics assume that women are less knowledgeable than their male counterparts on spare part prices and mechanical problems. And so they charge accordingly.
It also helps to understand the buyers motive. Buyers buy for their own reason, not yours. So asking the right questions to decipher what’s most important to your client is key to understanding how best to influence him better and motivate him to take affirmative action.
Knowing why she wants to buy a certain house is important. If she wants luxury or she’s looking for comfort. Another angle is to check if she’s more interested in an increase in capital gain over time and therefore sees the purchase as nothing more than a long-term investment against inflation or does she desire a quick return on investment from the rental income alone. You then know which houses to propose to her for inspections as possible options.
So understanding a buyers motive or being intelligent enough to offer her a number of motives which can spur her to action can give you some leverage on her. Motives for buyers range from a need for love, security, self-preservation, sexuality, freedom, contribution, legacy, fame, power and revenge. You need to know how to weave in these motives as you speak to your intending prospect about her purchase.
Then there’s the issue of Time. People who are desperate and running out of time are generally easier to persuade to yield than those who have plenty of time. If you buy a wedding ring on the morning of your wedding, you’ll pay 30% higher than if you did bargain a month ago. Also speed printing, express dry cleaning or even overnight loans costs more when speed and necessity are both in high demand. For that reason, it is unwise for an impatient person to negotiate. They cave in to demands too quickly and easily.
Same reason why very sick patients who sign up for private care often pay through their noses but the same persons were reluctant to shelve out a few thousands for a comprehensive health insurance policy a couple of months ago. I’ve also discovered that buying a house in order to stash away stolen funds always makes a shady buyer willing to pay far more than the true market value. Time isn’t on their side.
Then we have Leverage. Leverage can be gained in a deal through either possessing more knowledge than the person on the other side, knowing how badly the other party desires a particular purchase, being able to create a scarcity of your service or product, creating a feeling of a transaction having a deadline or having keen interest from the competition. A good sales person or deal broker must understand the Pleasure-Pain principle when it comes to any transaction. You must figure out the affliction or aspiration of a buyer and find a way to leverage on it.
You saw the long queues at the banks when people thought that their accounts would be frozen or shut-down if they missed the Bank Verification Number (BVN) registration deadline? That’s leverage on Pain. When it was announced that the date was shifted to October, notice how nonchalant everyone became?
Once you know all 3 factors presented above you can successfully broker and close any deal just long as you have a pleasant personality, show some imagination and of course take the initiative to ensure its a win-win for all parties concerned.
More tips on selling especially how to sell a motive and influence a deal will be discussed next time. Stay tuned.
P/S: Some of you may notice that I used the feminine noun for a change in writing, just to balance the narrative most authors (including me) usually make by always using “him”, “his”, “he” when writing. So yes, feel free to nominate the name Ebuka Anichebe for the next Minister of Women Affairs. Free Brazilian hair for everyone 🙂