The Expert Podcast

If you own or run any type of business, even if you are a department manager, you are constantly being pitched sales ideas from all kinds of companies. They may be trying to sell you marketing, services, inventory, or products. The process of dealing with salespeople has three parts: one is deciding whether or not you actually want to buy the item, the second part is negotiating the price, and the third part is agreeing on the terms.

Sometimes, it's important to recognize that the salesperson has a little bit of an advantage over you. They negotiate and sell this product every single day, day in and day out. Even if your role in your company involves sales, you are not selling that particular item. Today, we’re going to talk about how to negotiate and how to close a sales deal to your advantage, so you’re on the same level playing field—or maybe even a little better—than the salesperson trying to close you into a product or service.

We’ll discuss pricing, how to make the decision, and also how to say yes and no—even when you want to buy something. The first thing to recognize is that you will hear a lot of qualifying questions from that salesperson. How soon are you looking to buy? What’s your budget? Are there other decision-makers involved? You’ve probably heard these questions over and over, and they can be annoying. But sometimes, there's a reason they’re asking them. And sometimes, there isn’t. In fact, sometimes, these questions are counterproductive to the salesperson’s cause.

We will also show you how you can turn these questions around to your advantage, to negotiate and leverage with the salesperson. The first thing you want to do is obviously take your time. Don’t rush into anything. You already know this; there’s nothing special about going slow. They might pressure you with a high-pressure sales pitch depending on the service and try to guilt you into making a decision. When that happens, you can respond by asking, “Don’t you want me to make an informed decision?”

If they get exasperated asking you to buy right away or send them more information, you can ask them, “Don’t you care about me making an informed decision as a salesperson?” It’s a trick question. If they say no, they’re a bad salesperson. If they say yes, you can ask, “Well, why don’t you want me to look at this?”

When it comes to qualifying questions, like asking how soon you want to buy, here's how you answer it: Don’t give them a specific answer. Say, “We don’t have anything we need to wait for, but we also have no deadlines. If this is something that’s going to help us, we obviously want to do it right away.” By doing this, you’re tying their need to sell with the idea that it has to be something that benefits your business.

You also want to make them aware that there is no pressure to close by a certain date. If you tell them you have to close the deal within a week, they might drag out some things and not give you all the information you need until right before the deadline. By saying you have no deadline, you remain in control. Your goal is for them to show you how this will help your business—not just how it helps them.

How many times have you heard a salesperson bragging about their company—talking about awards, clients like Amazon, or how long they’ve been in business? Well, who cares? None of that directly shows how it benefits you. You've been in business for years—that's great, but does that make you better than someone who’s been in business for just a few months? If they sell to big companies, that doesn't necessarily help you, especially if you're a small business.

Now, one of the big questions they’ll ask is, “What’s your budget? How much do you want to spend?” While it’s clear they’re trying to qualify you and make sure you can afford the product, it’s also a trick question because the price is what it is. Here’s how you respond: “Let me ask you this: Is my budget going to change the price? If I tell you I have $1,000 to spend, are you going to change the price to $1,000?” If not, then why does it matter?

The other part of the answer is, “We don’t think of anything as a business expense. Everything we spend is an investment for making more money with our business.” This way, you reframe the conversation from “expense” to “investment.” Here’s where you can go a little deeper: Most businesses have a profit margin of about 20%. For example, if a business generates $1,000,000 in sales, they typically keep about $200,000 after all expenses. So, if you spend $100 on something, you would need to make $500 in sales to break even, considering the 20% margin.

Now, in order for an item to make sense, you want to see at least an 8x or 9x return on your money. For example, if something costs $1,000, you would need to see how it could help you make $8,000 to $9,000 in new sales. If the salesperson can’t show you that, then it’s a clear decision. This is a roadmap for how you make your buying decisions.

If a salesperson is offering you something for $1,000 and can’t show you how it will generate at least $8,000 to $9,000 in new sales, don’t buy it. Even if it seems like a nice-to-have product, if it’s not helping your business make money, then it’s not worth your investment.

You might wonder why you need an 8x or 9x return. If you make 5x your sales, that’s just breaking even. At 6x, you might make a little money. But remember, some things you try won’t work, and you won’t know which ones ahead of time. Maybe 10% to 30% of the things you try won’t work, so you need to account for that when making your decision.

This calculation helps you decide what to buy, how much to spend, and how to communicate that decision to the salesperson. If you tell the salesperson, “I need to make 8x or 9x sales to justify the purchase,” you’re putting the onus on them to make it happen. When you tell them “no,” they won’t be able to argue with your logic. They’ll try to overcome the objections, but you’ve set a clear standard they need to meet.

You can't afford it, or you can't make a decision, or you're not the authority figure. This brings me to the third qualifying question: is there anybody else in the decision-making process for you to decide to buy this thing? You can ask them, "Is there anybody else that you need to check in with in order to sell this thing, or do you have the authority to execute this deal by yourself?" Right now, you're putting them in the same position. If they're a salesperson and you say, "Well, if we want to negotiate some of the terms, are you able to make a decision to negotiate those terms yourself without checking in with anybody?" That also eliminates that whole back and forth, which you get a lot of times with salespeople, especially when you go to a car dealership. The car salesman might ask you, "Is there anybody else involved in the decision-making process of buying this car?" I don't know, is there anybody else involved with you negotiating this deal, or are you going to go back and forth with the manager?

Even not in a car dealership, some salespeople in a B2B environment, a business transaction, may have to go back and forth with somebody too. So, you can ask: "Is there anybody on your side? Obviously, when you make a business decision, you're going to check in with resources. I might ask people for advice. I might ask people for information. I might check on things, but that doesn't take away my decision-making process." So, let me turn it around on you and ask, "Why are you asking me that question? Do you not want to talk to me?" You can say this in a way that's a little more diplomatic than that, but if they say, "Well, we don't want to waste our time," what's wasting your time? You might have to explain it twice to me. If you don't think it's worth investing your time in talking to me as a prospect, then maybe I'm talking to the wrong salesperson.

The other part of it is, look at the sales process you went through. How many times have you contacted a business about some service or product, and first you talk to a lead generator, a screener that asks you some questions, basically just qualifying questions? They're not giving you pricing, they're not giving you product information, they're just asking you stuff. Then they say, "Let's set up a call with our senior sales advisory." You know what that person was? That person was just a screener qualifier, a lead generator. If you pass their test, now you go to the real person. So, if they ask you, "Do you need anybody else involved in the decision?" ask them, "Are you the decision maker, or are you just a lead qualifier?" Because if you are, then I don't want to talk to you. I want to only talk to the decision-maker—the head salesperson or the sales manager, whoever it is.

So, always turn around what they're saying to your advantage. And look, you're not trying to be mean to them or make their life miserable; you just don't want to be outplayed with psychological Jedi mind tricks that distract you from the true decision-making process for your business and put you in a position where you're being kind of vague on what the facts of that product or service are.

Now, regardless of how that sales conversation goes, they're going to pitch you on all their stuff. They're going to start by boring things about how long they've been in business, how good they are, and what their owner does, and you know who their other customers are. You can kind of let that info in one ear and out the other, and then they're going to get into the meat and potatoes of the product. Now, remember, of course, they're only going to tell you the good things about their product. They're not going to tell you about the downsides. You may know some of those, and they may avoid telling you the price. They might say, "Do you want to go ahead with it?" Well, how much does it cost? And they might gingerly tiptoe around that. But once you have all the information you think you want from them, ask them this straight question: "Is there anything else you think I should know before I make a decision? Is there anything else I need to know as a potential customer to make an informed decision besides what you already told me?"

They're now trapped again. If they say yes, there is, well, what is it? If they say no, there isn't, okay, that's good.

Go into my decision-making process, and I'll let you know. I may have some other questions. Now, keep it positive. You don't want to slam the door on them, even if you don't think you're going to be buying this item or service. You want to let them know that this seems interesting, this was a good conversation, I enjoyed talking to you, it was a beneficial process, I learned a lot from it. I may think of some other questions that come up. I can't think of any right now. Is it okay if I ask you some questions later today or tomorrow about the product or service? How can they say no to that? Again, you're asking them for permission. Is it okay if I ask you some more questions later today or tomorrow about what we talked about?

Now, what are they going to do? They know you're giving them the brush-off. They know you're not going to be signing on the dotted line right then, but they also now don't have a reasonable way of countering that by saying, "Come on, buy it right now." They might say, "What questions do you have?" Well, I don't know. I may have some that come up after I consider it. If they start getting into timing and pressure of making a decision right then, take whatever the dollar amount of that transaction is. If it's a $1,000 thing, a $50,000 thing, a $100,000 thing, I would ask them: "Do you think it's a good idea to make a $5,000 decision in 22 minutes? Would you advise that? Would you advise one of your relatives to make a decision on 20 or 30 or $40,000 with a 22-minute decision-making process?"

Again, you're turning it around on them. Obviously, they can't say yes because that's obviously irresponsible and misleading and hypocritical. If they say, "Yeah, you're right, you should think about it," say, "Look, I'm serious about doing this. Obviously, I wouldn't have contacted you. I want to spend money." The other thing, going back to the budget item, if the person asks you, "What's your budget?" another thing you can do that will really flip them out is take some very large number. Let's say you're talking to a company about marketing and advertising, let's say it's a TV station that you want to do commercials on, and you expect that they might hit you up for $15,000 or $20,000 in advertising. Tell them, "We are looking to spend a million dollars on new advertising this year. We're trying to find ways to spend money. Obviously, the money has to fit into our rule of 8 or 9X. But we're looking to spend a million dollars on 8 or 9X."

Well, if I told you, or asked you, "If you could make an 8-times return on your money spending a million dollars, could you probably come up with a million dollars to spend if you could be guaranteed to get 8 times your money back?" Probably would, right? But that's the thing about making a decision; it's the guarantee, and nobody's going to really have a guarantee. So, throw them into the mix of saying, "Look, we're looking to spend money this year, whatever amount you want to tell them. Maybe not a million, it's fine. You can tell them $100,000 or $50,000 or $10,000. We're looking to spend money on stuff this year to grow our business. We're looking to spend money. We have extra money to spend. We have a budget to spend. We're trying to find places to spend money. We just need to find places that make sense, that give us an 8 or 9X. Are you one of those? Show us."

Take control of the conversation now. At the end of that initial conversation, like I said, "Is it okay if I ask you some more questions later today or tomorrow about the service that maybe didn't come up right now?" Yep? Okay, good. Then, a few days later, see if they check back in. Don't call them back. Even if you have questions, wait to see if they call back, if they email back, if they follow up. Because here's the thing: the company that you deal with, at some point, you're not going to be dealing with the sales department anymore. You're going to be dealing with the customer service department or the production department or the operations department—whoever fulfills the order that you paid for. You give them money, and they fulfill it.

Their sales department should be the one that's most responsive. That's the one that's collecting the money. That's the one that's getting the money, right? If they don't follow up in 3 or 4 days or 5 days or a week, what does that tell you about the importance of follow-up and customer attention in that company? If their sales department's not doing it, what about their service department or their operations department?

And if at some point you're in a conversation about objections or concerns or questions, you can ask them, "Look, you said when we talked that if I have any problems with the product or service, I can call somebody, and they'll get back to me very quickly, or I can get answers. Or if I have difficulty with delivery, I can get answers. It took you 5 days to call me back on the sales side, and sales should be more responsive than operations because that's obviously more important. Would I have been able to talk to a live human right away? No. It took me several days to even get any information about my problem."

What does that tell you about that company? Do you want to give them your business after that? Does that make sense?