S: How to close the sale?
T: Closing is the most difficult moment of the sale. Closing happens when three factors are in place: the buyer’s interest in purchasing the goods, his acceptance of the proposed terms and his preparedness to make a decision. His consent is based on the fact that the answers to all his concerns were received and he is satisfied with these answers, i.e. the real ways were found to avoid the threats that he feared.
Why are so many sellers so afraid of closing a deal? Firstly, because until the last moment they are not confident in the buyer’s interest in buying the goods. Secondly, because they are not confident in how much they managed to fool the buyer while handling his objections. And thirdly, they are simply afraid, after all the work done, to hear, “No.”
There is another reason why sellers are so reluctant to push the buyer to close the deal. From their point of view, pushing the buyer to closing means applying pressure on him or showing how desperately the seller wants to sell his product. If the main task of the seller is to gain the buyer’s trust and establish good relations with him, then pressure inevitably leads to the opposite result. A demonstration of a desperate desire to sell a product provokes the buyer to break the seller. People do not trust those who put pressure on them or desperately want to sell. In general, it is for good reason. Usually, those who exert pressure do this for some selfish purpose and to the detriment of those whom they are pressing. Those who are desperate to sell usually do not believe that the buyer needs their product. But if you do not close the deal, all your work goes down the drain. Again, a hopeless situation.
How can a shift to win-win sales make a difference? With win-win sales, the closing is a natural continuation of handling the buyer’s concerns.
The last question in handling the buyer’s concerns is, “Is this solution enough to eliminate the threat so that you can decide and buy our product?” If the buyer answers, “Yes,” the solution should be included in the contract. After that, nothing more prevents the buyer from closing the deal. That’s all that could be said about closing a win-win sale.
Dealing with debts
S: What kind of debts are you talking about?
T: “Debts” occur as a result of the seller’s concession. The buyer says that according to company policy deliveries are paid 30, 60, or even 90 days after the goods are delivered. Well, if payment is not made on time, then one could receive his money only through a court or arbitration. Debt collection, as well as payment delays, adversely affect the seller’s business. By making such a concession, he actually allows the buyer to pull money from his pocket. There is no other way to describe such a concession.
S: But deferred payment is a generally accepted business practice!
T: What usually causes such “payment terms”? Does it take so long for delivery documents to be processed by the relevant departments in the company then by the bank? It is hard to believe.
There is, of course, such an excuse. The buyer might say, “Our accountant signs all invoices once a month, writes checks and mails them on the same day. And the rest of the days he is busy with other important things.” Should you believe in this fairy tale? Sure, you may. But for some reason, this blah-blah-blah works only one way. After all, when someone should pay their company, checks must be sent to the bank on the same day, and no one expects a “treasured day” to put a check on the company’s account. The answer to this excuse is simple, “Please, tell me when your accountant signs the invoices and writes checks, and I will deliver the goods to you that day to get my check right away.” Prepare popcorn ahead of time and watch how the buyer tries to get out of it. I guarantee you a funny show.
Imagine the following situation. A company supplies a product to a cafeteria. The cafeteria agrees to purchase this product “Net-30.” However, when the same seller comes to the cafeteria for a cup of coffee, he should pay immediately, without any delay. If he offers the cafe owner, “Let me pay you in a week, when it becomes clear that I haven’t poisoned myself in the cafe,” the owner would look at such a visitor like at an idiot. But for some reason he does not consider himself an idiot while telling about “Net-30”!
S: And what is that bad in delaying? Everybody is doing that!
T: Deferral of payments is an interest-free loan to the buyer from the seller, as well as a way to transfer risks from the buyer to the seller. From this point of view, deferral of payments is a concession that the seller makes to the buyer in exchange for the buyer agreeing to purchase the goods from the seller.
In addition, the seller assumes the risk of not receiving money from the buyer at all if the buyer does not like something or if he “accidentally” forgets or even does not want to pay.
If the payment is deferred, the seller’s company loses working capital for some time. But the value of money depends a lot on the time factor. Money available or missing on time sometimes becomes the decisive factor in the survival of the seller’s business.
S: But what is the relationship between them? People say, “time is money,” but that’s just a saying, isn’t it?
T: Time and money are related very closely. Both the seller and the buyer need money to run and grow their businesses. Those who have money now can grow, and those who are waiting for their money are waiting to grow. Therefore, during the bidding, the delay and price are often exchanged for each other. For example, timely payment or even prepayment is exchanged for a price reduction. Of course, this is followed by a typical scam: later, the seller is forced to switch to the deferred payment, but the previously made discount remains intact. Alas, that’s life. If you concede in something, you are doomed to concede more and more.
It means that if you are dealing with debts it is a direct consequence of the concession you’ve made while bidding. If you don’t make any concessions, you shouldn’t have to beg the buyer to pay his debts later, you shouldn’t have to take on and pay for the risks of the buyer. If you do not want to pay out of your pocket for other people’s problems, do not make concessions, learn to negotiate mutually beneficial terms, do not beg for a deal, do not beg for a purchase. Otherwise, all the trouble is yours.
What did the prisoners say? Don’t trust, don’t be afraid, don’t ask. Don’t trust the buyer who wants to do good toward you rather than toward himself. Don’t be afraid that this is your last deal, that if it does not take place, the sky will collapse. Don’t ask the buyer to buy your product.
S: But what is wrong with a concession, a compromise? After all, the main goal is to sell the goods. If the buyer, in gratitude for the concession on the part of the seller, agrees to buy the goods, it’s wonderful, both sides are satisfied!
T: It seems to be so. But why am I so persistently campaigning against concessions?
It is very simple. Concession is good when it is mutual. Of course, even in this case, not always. But when concession is one-sided, one should definitely answer the question, “Who will pay for that?” Free cheese is only in a mousetrap. Everything that seems free is paid by someone, either voluntarily or forcibly.
Who pays for the seller’s concessions to the buyer? Oddly enough, only one side pays for all concessions: the company represented by the seller. Who receives this payment? The company represented by the buyer. What does the seller’s company pay for? For the buyer’s consent to buy the goods offered by the seller.
So, the seller pays the buyer for the buyer’s consent to buy the goods from the seller. How is it called? Bribe. Blackmail. Or a concession. The first is illegal, the second is socially unacceptable, the third is a social norm. The difference is not in the nature of the phenomenon, but in its name. In society, it is customary for a seller to be inferior to buyers. But this does not mean that this state of affairs “has always been this way and will be such forever.”
Oh, by the way, what is this bribe paid for? For the buyer’s consent to buy the goods that his company needs. It’s strange to bribe for that, isn’t it?
Why do sellers agree to bribe, to yield to blackmail? Because it is very important to them to sell the product, and they are not sure whether the buyer’s company needs this product. So, they pay out of the pocket of their company for their own insecurity, lack of confidence. They incur the direct damage to their companies.
However, the buyer’s company really needs this product, otherwise they would not have bought it. Naturally, the buyer diligently hides from the seller that the goods are quite suitable to him and his company. He tries to create an illusion whereby the goods are not really what he needs, he can do without them. The typical act of manipulation and the blackmail! The seller, in his turn, for some reason naively believes this illusion and plays along with the buyer. He is afraid to get up and leave. What if the buyer would not run after him shouting, “Come back, I will buy everything!”? Hence the willingness to make concessions, although the buyer could buy without them.
S: But not every buyer is ready to buy any product offered to him!
T: That’s right. Do not sell to the one who is not going to buy your product, who does not need it, especially if this is not a one-time sale.
I am campaigning against such meaningless bribery and concessions to blackmailers. You do not need to sell to those who do not want to buy. Those who want to buy can buy without your concessions.
If you do not want to deal with debts, do not provoke the buyers. Firmly stand your ground. Money upfront.