The Art of the Deal -

The Art of the Deal

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I remember back in the heyday of consumer confidence where everyone was extremely liberal with their pocketbooks. You would sit down with your client after doing your walkthrough, go over the system options, and just throw out a number, say $50K, for that brand new office build out. You'd cover the presentation system in the boardroom, audio throughout the building, a network backbone that will support the early days of videoconferencing to China, you'd control the whole place and have it done at your scheduling discretion because... yes, you were that busy. Booking eight weeks out was standard, because lets face it, you've already quoted this exact job for four other clients this week. 

And you know what? That customer’s response was usually something like this: "Sounds good, make it happen!" And you'd just smile and hand them a contract to sign.

The good old days... when we didn't have to sit through a project assessment and have the client price checking every product we mention on their laptop AS WE DISCUSS IT! The good ole days where every conversation didn't have multiple iterations of the phrase "So you're gonna give me a good deal right?" after every number we discuss. The good ole' days where the client wasn't looking for a laundry list of every component you were planning to install, because they just wanted it to work.

Nowadays it seems that everyone is searching, maybe even yearning, for a deal. Oh and not just a big-box weekend flyer deal, but a profit-busting, no money to feed your kids, put ya right out of business just to try to appease the customer kind of deal!

Deep breath Matt, deep breath!

Ok, it's possible I'm over exaggerating, but if you’re honest with yourself, I'm actually hitting the nail right on the head. Unless you are working for big corporate (read Fortune 1,000 types), large education, large healthcare, and don't forget Big Government, you know I'm dead on! Today the order of the day seems to be a constant "What can you do for me, then take that number and double it and we might talk!"

Now don't get me wrong, I am not attacking your customers’ budgets, shrinking as they are. I'm perfectly fine with the customer having and wanting to stick to a budget, that's great. If they stay in their budget, they'll most likely pay your bill, because well, it's in the budget. What I can't stand is when people want the DEAL, they want a solution with superior products that aren't anywhere near their budget point. Yet they want you to give them a deal so that they can get this far superior solution at the price they feel they should pay.

What I'm really 'referring' to (I can't say attacking, I'm Canadian remember... we're a non-aggressive people) is clients that really don't care about the products, the solutions, and the service they appear to be most concerned about. They just care about the bottom line and how much you're going to save them and if you'll beat Internet Joe! It's not so much about staying within the budget, although that is important, but their biggest concern is the fact that you've got to get them a good deal.

We've got clients we've been working with for years and you know what, we take care of them, because they've worked with us for years. We have a relationship with them. Why is it that that guy who called your office out of the blue last week feels he deserves the same kind of perks that come with years of working together... if not even more perks. I'm of the opinion that it should be my decision who gets a deal from my company. I dictate those terms; you, as my client, don't. And yet we are always pressured to make those deals because as the mindset goes: if we don't, the guy down the street will make that deal, and you'll be stuck empty handed.

Let me give you an example that's not even from our industry, because we all have more then enough of those. My wife Fiona is a real-estate agent. She was showing a house and trying to get a deal closed for her client to purchase this home. She works on commission, as real-estate agents do. The client's friend is along for the tour and asks my wife if she would cut her commission to help get the client a better deal. Now this is the same thing we're talking about. Why should my wife undercut herself to give this client a deal? Either the client can afford the house or they can't. If you have an agent, you pay the agent. End of story; this is how this works.

Let’s say for sake of discussion that the client was a dentist. Does a dentist allow their rates to fluctuate to suit each and every client? You don't sit down in that chair, lean back, and just as they put that suction tube that always gets stuck to your tongue, say, "Hey Doc, you know how you charge $350 to fill this cavity. Well I want a deal, I'm only gonna give you $150. You're okay with that right?" You're gonna get tossed out of that chair mighty quickly!

When the tables are turned, our customers aren't wanting to give us those killer, profit-busting deals. They still want us to pay full price for anything we would purchase from them. See back in the day, people seemed to understand that everyone needs to make a living and that was okay, but today people seem to only think about themselves and their wallet.

So how do we go about dealing with this? How do we convince these clients that they are going to be extremely satisfied with the service and solutions that we can provide them and that they are getting these solutions and services for a decent price? Let’s be honest, that's what we want to do. We want to provide out customers with a good service and good solution and good price. We want the client to be happy with what we did for them and what we charged them, and more importantly, we want to be happy with what we provided and what we charged them. Bottom line, we want to make the client happy and make a decent profit so that we can continue to make the next customer happy!

So how do we win over the client that just wants a deal? Well, first of all, we've got to change the conversation, get it away from the deal, get away from strictly the dollars and cents of it (or in Canada, the dollars and nickels—we don't have pennies anymore!)

• We need to do a better job of explaining why we use the products we use and how we go about providing the solutions we provide.

• We have to stop making excuses for the price that comes with our knowledge and experience, stop making excuses for our intellectual property. Sidenote: now if you're not charging for your IP, you need to start! (That was a freebie!)

• We need to start utilizing products and suppliers that are more interested in helping us then squeezing profits out of us. Find those products that you CAN make money with and avoid those you can't.

• We need to outline the differences between our business and others. What do you do differently than the other guy who's undercutting you. When other companies are dramatically cheaper then you, they are doing something different: using cheaper, less skilled labor, using inferior products, not providing service or training, etc. There's always a difference! In this business, we all know what everything costs. If they are dramatically cheaper, there's a reason.

• We need to educate our clients on what's involved in their project. Many times they don't truly understand what they're getting into and have no understanding of what things actually cost.

• We need to remember that not every client is our client. This is key! We have to learn who is our customer and who isn't. Many times we need to actually fire a client! If they're going to be that client that is all over you about price, beating you up, chances are they are gonna be the exact same after you’re completed, coming after you for the smallest concern, costing you more money in the long run. Fire that client!

Let's continue to learn how to deal with these deal-requiring customers and learn how to flip that customer from one who only wants a deal to a good customer who is most concerned with the value of our solutions and services. We can do it if we all work together in our industry and change the art of the deal! Let's make it a standard of our industry to keep the value in what we do! Let's remember, if we promote the value in what our companies offer, the conversation changes—and when the conversation changes, we all make more money. Let's be honest... that's a good thing these days!


Matt D. Scott

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