Navigating the Siren's Call: Ensuring You Get The Volume for Your Discount
How to Manage the Allure of Increased Volume without Compromising Your Value and Ensuring Enforcement of Terms
The Weekly Walkaway highlights negotiation in its ‘good’, ‘bad’ and sometimes ‘downright ugly’ forms. Issue No. 79 (23rd May 2024).
We know Walkawayers like to be anonymous. We understand.
We also see that only 1% pay in but weekly 40% are enjoying the reading.
If you can’t love our work (❤️) and affect the AI then please do consider paying in. It is less than a price of a coffee a month and you get stuff like free coaching and access to our tools.
Thank you. Go on, you know you want to..
Thought of The Week
Navigating the Siren's Call: Ensuring You Get The Volume for Your Discount
I was coaching this week with a valued client, let's call them Jane.
Jane is a human capital sales consultant, managing multiple large accounts. I’ve worked with Jane before and can say she is a great negotiator. I say this because I’ve used some of her story to bring a learning point out which is not a true reflection of our coaching session, for obvious reasons… wink wink. In fact Jane might not even be a Jane.
She had been approached by one of her clients who, like many others right now, was looking to cut costs and was offering a promise of increased volume.
Sound familiar Walkawayers?
I thought so. I’m seeing more and more of these ‘requests and promises’.
But before we jump into the ocean, drawn in by the Sirens call, here is the conclusion for those who are hard pressed on time:
![My Jolly Sailor Bold [Mermaid Song] - Pirates of the Caribbean: On Stranger Tides [Good Quality] on Make a GIF](https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb310317f-e252-4875-bb77-0192fac1068e_320x139.gif "My Jolly Sailor Bold [Mermaid Song] - Pirates of the Caribbean: On Stranger Tides [Good Quality] on Make a GIF")
Conclusion
Remember Walkawayers; negotiation is an exchange that involves ensuring value for value. Never give anything away for free, always get something of equal or greater value in return.
By employing conditional trading, you make sure that your negotiations are not just agreements where value is exchanged for value but also where what you give is safeguarded against potential non-compliance of ‘them’ not giving in return.
But, importantly, negotiation doesn't end at the hand shake. The handshake just starts the next negotiation phase; contracting and implementation.
Whether you are a consultant, a sales professional, or just someone looking to make a deal, always aim to structure your agreements in such a way that the obligations of all parties are clear and enforceable throughout.
They add in penalties to protect themselves so why don’t you!
This approach will help you secure appropriate value exchanges in your professional and personal life.
Consider how you can ensure your builder delivers projects on time. Or how you can tie incentives to your Estate Agent. The same as you should to tie in that volume for the discount you’ve given…
But more importantly Walkawayers, in these changing economic times don’t be drawn to the Sirens call. Don’t just chase the sales! Don’t let external pressures make you too eager to agree terms that in the end will negativity impact your revenue, margin and EBITDA! Negotiate!
Navigating the Siren's Call: Ensuring You Get The Volume for Your Discount
Buyers have been doing it forever…
Like everyone in the world of talent the promise of more volume is alluring.. as a bright lure is to a fish.
The scent of volume to a salesperson is as powerful as a Siren's song to a sailor.
Of course, why wouldn’t it?
It represents not only the promise of increased revenue but also the potential for greater commissions and prestige. Everything that motivates salespeople.
But, just as the Siren's call is irresistible yet potentially lethal, the pull of more sales volume can tempt you to make concessions or agree to terms that might not be in your best interest without the proper safeguards.
The difficulty is that you are being pulled and pushed by:
internal factors;
shareholder needs and;
external circumstances.
It is basic economics and unfortunately these pressures are forcing ‘eager selling’ behaviours rather than good negotiation practices.
You see, Jane, being overly eager to please her managers and shareholder needs, had been too keen to secure the contract and the promise of triple volume.
Initially, on the face of it, the deal seemed great
Jane had offered a substantial discount on her standard pricing in exchange for the increased volume.
Again, who wouldn't?
Buyers and Sellers around the world are doing it all the time; we leverage Price over Volume.
However, Jane, like many of you, had made a critical error!
Like Jane, you’re not negotiating any form of protection into your agreements.
You are not adding a layer of enforcement to ensure the promised volume will be delivered on.
Those who do, request a policing policy but are pushed back by the buyer and in fact most, too eager to ring that bell and achieve prestige, do not assert their rights and their company’s needs.
The deal doesn't finish at the handshake. The deal is done when the contract is signed and implemented.
Jane had been dealing with a particularly arrogant and tough buyer who had clearly stated ‘no’ to any policing terms so the contract merely stated the discounted price, with the volume increase mentioned as an expectation rather than a firm commitment.
Of course the expected volume never materialised, it shrank!
The Buyer had exploited Jane. The Buyer had used Jane and her good values, her sense of fairness and her need to ease the pressure on her to increase revenues.
Jane was having to provide services at a massively discounted rate and the account is at risk of falling into negative revenue.
This is an issue for all of you! BEWARE!
If you, under pressure, chase sales you will be sucked into the Whirlpool of diminishing returns, lower margins and falling EBITDA!
You will give away stuff for free!
The key point of note here is that negotiation, unlike sales, has this one golden philosophy:
‘Never give anything away for free, always get something of equal or greater in return’.
This key negotiation philosophy not only preserves your value but also enforces respect and the law of reciprocity, which as you Walkwayers will know is fundamental to successful negotiation.
It is not about being selfish or greedy, it's about ensuring sustainability and protection. It’s about protecting your business stream, your targets, your prestige and yes, ultimately your share holders value.
One of the essential skills you need is the ability to trade conditionally and then enforce the conditions.
‘If You… Then I…’
In conditional trading, using "If you, then I" language is crucial as it clearly sets the terms of the exchange, ensuring each party understands their obligations and rewards.
This is known as "pain before gain,"
Physiologically it helps in creating a sequence in the human mind of commitment and reward.
It ensures your agreements are reciprocal and also binding.
This technique involves making moves or offers dependent upon receiving something specific in return.
It’s just common sense.
Done right, conditional trading not only protects your interests but also fosters a cooperative environment by aligning both of your needs.
Use what they want or need as a lure, as an incentive, to pull them in. Your condition is the barbed hook to keep them on.
It's about saying, "I can do this for you, if you can do that for me," thereby creating a reciprocal relationship.
The power of conditional trading can only be realised when you make these conditional commitments enforceable
If you don't then turn the ‘proposed promises’ into concrete agreements, with clearly defined obligations, you will surely be exploited!
Why.. because it's in their interest to do so, fool.
Example is of course a buyer gaining a massive volume discount for nothing…
So, using conditional proposals gets you to agreement and protects your value in the negotiation but without a layer of implementation-enforcement your agreement is not worth the paper it's written on!
Conditional trading builds trust and cooperation as you exchange value but they are just words. Actions create real trust. You need to be reliable and reliability can only be credible through real actions and so trust and value can be lost in an instant if you don't add actions to police the deal.
We know Walkawayers like to be anonymous. We understand.
We also see that only 1% pay in but weekly 40% are enjoying the reading.
If you can’t love our work (❤️) and affect the AI then please do consider paying in. It is less than a price of coffee a month and you get stuff like free coaching and access to our tools.
Thank you. Go on, you know you want to..
And if your counterpart is not willing to agree to your policing measures then think very very carefully… Why wouldn't they agree? Are they a Siren!? Are they looking to exploit you?
Jane's experience highlights a critical misstep: not negotiating with protections or policing mechanisms to enforce the agreed conditions. Don’t be caught out.