Ask the Right Questions to Negotiate
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I had the pleasure to join Kison Patel, CEO and Founder of M&A Science, as his guest on the M&A Science podcast earlier this summer, as you may recall from part one of this series, Gaining and Maintaining Positive Leverage. In an episode titled How to Negotiate Like a Pro, Kison and I spent almost an hour discussing negotiating techniques and tactics.
The ideas and methods we covered may be very beneficial to you and your team, so have a listen and share with your coworkers.
The Risk Reward and Action Matrix is a tool that we utilize in our work. Essentially, the goal is to clearly define the factors that influence a customer's choice to act.
This tool compares the rewards (benefits) your prospect will get if they take the recommended action (e.g., buying your product) against the dangers they will face if they don't. And this is just one of many instances when asking the proper questions is more essential than giving a sales presentation.
In fact, asking the appropriate questions provides comfort to the potential client, and their responses should become an important part of your compelling sales presentation.
Because many business and sales professionals (like myself) are type-A personalities, their capacity to ask questions is often limited. As a result, we like to get right to the point, speed the process forward, and complete the transaction as quickly as possible.
However, one thing I've learned over the years is that patience and listening are two qualities we need to acquire in order to build the portfolio of data needed for proper risk-reward analysis and scenario planning.
We've all been told that we have two ears and one mouth, and that we should listen twice as much as we speak. While there is much insight here, no matter how well-intentioned, individuals may lose their capacity to listen as effectively as they should when they are engaged in their own negotiations and under pressure to make things happen.
Situational awareness and professional negotiating training may be very useful in this scenario.
A superpower is the ability to ask the right questions
You have the ability to listen at any moment, especially if you take the time to ask thoughtful questions. Curiosity is the starting point for effective inquiries in the negotiating environment.
I'll discuss how empathy is a business accelerator in a future post, but it's important to remember that empathy starts with curiosity, which is the fuel for asking excellent questions.
Asking the proper questions is a goal you set for yourself long before you meet with your counterparts. It all starts with a thorough investigation of their company.
You want to know as much as possible about what's going on in their sector, and, more crucially, the drivers that their firm and the people you're working with are dealing with - what are the roadblocks, competitive pressures, opportunities, and so on. This research, which you can do a lot of online, gives you the background you need to make sure your questions are current and relevant.
If you're working with top executives, there's a wealth of material available online to assist you understand their personal motives, which are frequently just as essential as, if not more important than, organizational imperatives. Perhaps the executive recently took over someone else's position or was part of a company reorganization.
If that's the case, what was the issue and why were they hired? Basically, I'm curious in two things: first, what motivates them?
This is the "why" question, which is actually about where we are now. Second, I'm curious in the other side of the why coin: their goals and anticipated future state.
The importance of identifying goals
The implication is that you want to know how to assist your negotiating opponents in achieving their most significant personal goals while also serving the organization's and business objectives. If we're going to make a bargain, it needs to be about assisting them in achieving their desired future condition.
Whether you're selling a product or service, completing an M&A transaction, or recruiting a new employee, this is true.
When it comes to hiring, I frequently make more decisions based on the questions that prospective colleagues ask than than the answers that they provide. I'd want to know whether they've done thorough research about me and my business and if they have the appropriate levels of curiosity and empathy.
I'm also checking to see whether the applicant can translate his or her interest and empathy into a coherent and organized series of questions. It's especially essential if you're recruiting salesmen to show these abilities.
One key thing to remember is that, although preparing and asking excellent questions is important, so is the capacity to sit back, listen intently, and resist the temptation to respond. Every pause isn't a chance to demonstrate your genius, and interjections will often halt the flow of information you need to close the sale.
While it's important to ask the correct questions, it's equally critical to avoid asking the wrong ones. In general, we should avoid asking questions that can be answered quickly with fundamental research. "What were your revenues last year?" or "How many employees do you have?" are two examples.
These kinds of questions, unless asked in a meaningful context (such as to validate a broader assumption), may come off as trite and can jeopardize your credibility.
It's also a no-no to ask canned inquiries that seem like they came from a sales training class. "What keeps you up at night" is my least favorite of this type.
You'll quickly learn what your prospect values most and what it takes to move the transaction and your relationship ahead if you ask the proper questions.