Who’s The Sucker?

Today was the big day. Our presentation for a new, important client from Europe was ready to go. It was the biggest deal we had ever pitched but we were confident and prepared, ready to put on our best and most compelling presentation.

But, it was not to be.

Yes, we had heard the rumor that this particular company had a reputation for being tough but fair in the negotiations, but we were sure they would be fair once they heard our presentation.

In hindsight our visions of a new big account in our future and enormous success for our prospective client blinded us to what should have been obvious.

Being tough but fair just meant tough. It was a euphemistic cover-up for being ruthless negotiators who took no prisoners.

We got sucker-punched before we even got in the game. It was as embarrassing as it was painful because we ended up being “the sucker at the table.And we didn’t find out it until it was too late.

There is a saying in the game of poker, “If after the first twenty minutes, you don’t know who the sucker is, chances are it’s you.”

In business negotiations this old adage translates to, “Whenever you don’t know who the loser is in a transaction, then the loser is you.”

This means that most negotiations can be won or lost before they are begun

Caveat: “Most con games are organized to make the victim think that someone else is a sucker. So if you think you know who the sucker is, you’re most likely being conned.” – The Poker Face of Wall Street By Aaron Brown

In any case, on review, it was clear that our sales negotiation team was on the losing side because of three big mistakes.

I’ll explain.

At the beginning of the meeting, they wanted to give a general presentation on their company. They said that it would help us understand how the internal processes worked for securing outside services with their company presumably to help us close the deal.

The truth is, they insisted.

First Mistake: We agreed somewhat reluctantly, but we couldn’t really refuse, or could we?

They proceeded to spend an hour on a very well-rehearsed, convincing monologue which laid out their purchasing procedure and why they were firmly limited to only a certain size budget for the type of program we were suggesting. They were very polite and nice about it, but stood rigidly firm on their pricing. Their reputation of being tough but fair was coming back to haunt us.

You could almost hear the wind rushing out of our sails as our hopes of a big deal were summarily crushed. Their final budget was less than 50% of what we estimated and knew they needed to accomplish all they wanted.

Second Mistake: Putting our disappointment aside, we decided to go through with our presentation.

We dutifully went through the motions – but it was clear that our hearts were not in it. At the end of the day, out of desperation, we capitulated and ended up cutting our budget by over 30% right off the bat, in a vain attempt to appease them.

We thought it was worth it because they seemed so excited about doing business with us, and future business might forthcoming, if we could just get past this one last hurdle and cut a little more out of our price.

Third Mistake: Very reluctantly, we swallowed what pride we had left and grudgingly agreed to go along with this further insult.

In the end, we closed a deal that they were very happy with. But, we got skunked.

They out-negotiated us, big time. I’m certain their sales process was a template, one that they had rehearsed and drilled many times before meeting with us. We got hustled, clear and simple.

In fact, much later, I was involved with another presentation with this same company. They pulled the exact same thing as the first time I caught their act, I’m sure all the while thinking, “It works, why change it?”

And they were right.

Any negotiation tends to go to the side that is better prepared, practiced, and who has a definite playbook to follow.

They had plans and backup plans and even more contingency plans to cope with anything we came up with. We simply got outplayed by a vastly more experienced and trained group of negotiators and without knowing it, we ended up being the suckers at the table.

The experience was painful and expensive, but we did learn some important lessons.

1. Expect the unexpected.

Never go into any negotiation or closing situation unprepared for everything that could come up. Positive thinking is wonderful, but the side that has done their homework, is organized and has a focused plan with the exact outcome they want, most often comes away the winner.

2. Time and information are your most powerful tools.

Conduct a thorough research on the company before the meeting. Find out everything you can about them. Why did they contact your company? What are their time constraints? Who is doing the presentation? What do you know about them? Any information will give you a small edge; all the information will give you an enormous advantage.

3. Don’t assume anything.

If you must assume something, then assume something unexpected will happen. That’s pretty safe bet. If you assume that anything that could go wrong will go wrong, and prepare accordingly, you have a chance of staying in the game, and even closing the deal. That for which you are unprepared, inevitably does happen.

4. They want your services as much as you need their business.

Ignore anything they say to the opposite. They wouldn’t be there if they weren’t serious about doing business with your company. It’s likely they want you more than you need them. Don’t feel weak just because they are pretending to be stronger. Your position is just as strong as theirs, or stronger.

5. If you can’t spot the sucker at the table, you’re it!

Remember it’s a tough, cutthroat game when it gets down to the fine print with big money in play. If you look around the negotiating table and realize that you’re the most inexperienced one there, watch out, you’re being set up. Learning too late, that you’re the sucker at the table, can be a painfully expensive lesson.

6. Develop walk-away power.

When you have walk-away power, you are negotiating from a position of strength. When you just have to have the deal, you’re on the weak side of the negotiations. Develop walk-away power and use it.

This last point is the most important. You may lose the deal but at least you’ll retain your integrity and then you’ll get the reputation as being tough but fair.

And that’s a lot better than being known as the sucker at the table, isn’t it?

daniel w. jacobs
(c) 2009-2030, all rights reserved

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