|Montgomery speaking at the 2014 ASCA Executive Summit.|
national recognition and praise for his informative, practical and stimulating programs that reflect his basic philosophy: “Preparation and practice are the keys to sales success.”
Montgomery began his career with one of the nation’s largest jewelry chains and worked his way up to the director of sales position. It was here that he began refining his approach to training. In total he has trained more than 1,200 associates in 95 stores during his time with the organization. Since that time, he has assisted hundreds of organizations to meet or exceed their sales goals using his training programs.
So we were thrilled when Marvin was featured speaker during our recent Executive Summit in Miami. We sat down with him afterwards to pick his brain about the negotiation process and how not only to close the deal, but to get contracts signed.
Selling snow and ice management services is only part of the equation, and often the real work comes when negotiating the service contract. How much is this negotiation is a part of business, how much is art and how much is just a game?
It starts way before you get to the negotiation. People buy services from people who they know, like and trust. Hopefully you’ve established this early on in the relationship when you first established the need and you’re now in the process of providing a solution. I try to get people to understand that you’re not providing a contract. You’re providing a solution. Use the word “solution” and “relationship” and “partnership” – these are the words that let the client know this isn’t a one-sided situation. [Clients] often aren’t used to this, and when they enter this process the only thing they can go on is what they know from the past, and usually previous experiences aren’t all that great. So a lot of this goes back to addressing these concerns early on during the assessment. If you ask the right questions – for example, “Share with me the processes you’ve used when you’ve worked with contractors in the past like myself.” “What’s important to you?” “What are the non-negotiables.” – it’ll be easier to enter the negotiation process.
Sometimes we don’t do this until it is way too late. Get these potential obstacles out of the way early on.
How long should the due diligence process should take? Do you find that business owners rush this process and not have gone deep enough?
There’s a couple of things. I try to get people to use the word “agreement” instead of “contract.” It’s amazing how one word can make all of the difference.
Why is that?
“Agreement” is less threatening. “Contract” says you’re going to need to send this to your attorney for review. Some of the best contractors I’ve seen out there don’t bring in a six or seven page contract. The longer and more convoluted you make this process, the longer it’s going to take. One of my favorite expressions, which is true, is that “time kills a deal.” That’s where the deal dies, sometimes. The decision is made to go with your business, then they see the 10-page contract.
One of my favorites is when a client is told “We don’t have the contract ready yet.” What’s there to get ready? Why does it take so long to get the document prepared? It should be an easy template that just needs the numbers plugged in. If you don’t have the contract ready to go, you’re just slowing down this entire process. I understand that each property is different, but the services are the same.
The other thing I see is that the sense of urgency is not the same throughout the organization. The sales person wants to get this all buttoned up. He brings this urgency back to the office, but there is no urgency there because whoever handles this process next doesn’t see a new client, they just see a pile of paperwork that they need to complete. We need to get people to understand that this isn’t just numbers, but an opportunity and a person on the other end who’s waiting.
The common belief is that conflict between the salesperson and the client will kill a deal. But from what you’re saying, these deals can get tripped up from within the snow and ice management operation.
A lot of it is internal. Sometimes the best company doesn’t win because they’ve taken too long to get back to the client and close the deal. Sometimes the worst company wins because they were able to maneuver quickly and had their document ready.
So how do you stay in it and not lose out to the details? How do you speed up this process?
If I’m sitting down with you and we have a verbal agreement, and now all we need to do is dot the I’s and cross the T’s, then I’m going to establish a date and time when we’re going to meet again.
Believe it or not, a lot of companies don’t do this. Often the meeting concludes with the sales guy saying something to the effect of “I’ll get back to you as soon as I can have [the contract] ready.” And he’s off to his next sales meeting. You haven’t given the client any expectations… it’s as if there is no commitment on your part as to what the next step is. Don’t leave that meeting without a commitment as to when, where and how the next meeting will take place. Is it in-person or over the phone? Am I emailing you the agreement, and if so when will we meet to go over it together?
This industry is still doing a lot of “quote and hope” – you quote it and you email it out. So not only am I going to establish a date and time, I’m going to bring it back personally so you can’t blow me off. Again, are you selling a contract, or are you providing a solution? If you’re providing a solution, then you need to sit down together. If you’re just selling a contract, then yes, just email it out and don’t be surprised if you have a 10 percent close rate.
You can double your close rate overnight, all you have to do is schedule a date and time to come back and go over the proposal and finish the deal.
It also creates a sense of urgency at your own organization because now you have a date and time you’re committed to [to the potential client] and you need the paperwork ready for that follow-up meeting.
How does a contractor get what he wants? Often the sticking point in a contract isn’t necessarily about money. Instead, it’s about certain service specifics, liability issues, or who will make what decisions during a snow event. How does a contractor overcome those impasses to close the deal?
During the planning stage you need to know what the negotiable and non-negotiable items are. Some things you know you won’t negotiate and you need to be confident up front about that when you go in. You also need to know the things that you will budge on. Now, when I’m speaking to the client, I can speak with some confidence and you have to explain the benefits of keeping that item in the contract language. However, you’re also confident about what you’re willing to budge on. It’s like buying a car and getting the floor mats for free – can’t budge on the sticker price, but they’ll throw those winter floor mats in for free.
The problem is a lot of contractors don’t know what is negotiable. Sometimes you do have to bend, but a lot of that can be determined up front. Remember, if you ask and listen, they’ll tell you how they want to be sold. You need to be asking the right questions early on to determine what you’re willing to bend on. Don’t hope what you leave in or take out will be a win-win in the end.
You also need to ask your own people whether or not you’re making it easy to do business with clients. How much language really needs to be in an agreement and how much is really just … stuff, but could potentially trip up a deal?
In this industry contractors want to use their contracts, but often the property owner or manager wants the contractor to use their template agreement. How do you overcome this? Or, is there a way to use the property manager’s contract and not come out on the short end?
I tell people to use ACS – Acknowledge. Concern. Suggest.
So this is how that conversation could go: “Hey, I understand why you want to use the contract you’re using for your property. I’m concerned, though, that if we use that contract it’s not going to contain all of the language that we need to do what needs to be done. Let me make a suggestion: Send me your contract and I’ll match it against ours and I’ll make sure we include anything that’s absent from ours. How does that sound?”
If it’s a deal breaker, then maybe it’s the complete opposite -- I incorporate my contact into the property manager’s agreement.
Let’s focus on another area – contracts that pertain to purchasing equipment and materials. When it’s flipped – now they’re being sold to -- does the business owner often lose perspective?
They’ll do the same thing to their service providers that’s being done to them by property managers and owners. You have to be conscious of this because what’ll happen is that people won’t want to do business with you.
Mike Zawacki is Snow Magazine’s editor.