Editor’s Note: This post originally appeared on Chris Provines’ blog. For more information on Chris, please visit his website.
“Loose Lips Sink Ships” is a phrase that originated on propaganda posters during World War II. According to Wikipedia, the phrase was created by the War Advertising Council. It was used during a general campaign to educate citizens and soldiers about the need to avoid careless talk about secure information. During that time, careless talk about secure information could, indeed, result in the sinking of a ship.
Although the situation is obviously less dire compared to wartime, the consequences of loose talk during the sales and negotiation process can be impactful. It can result in the sinking of your margins. This is especially true when negotiating with professional buyers. These buyers are trained to extract and use information to their advantage during negotiations. Remember, information and knowledge are points of leverage and provide power during negotiations.
As professional buyers play a more important role in the buying process, it’s important to be disciplined about how you engage with them. During the sales process, most salespeople naturally use small talk to build rapport and find common ground. Smart buyers know this and will be searching for information. If you are in sales and are engaging professional buyers, be careful about disclosing seemingly unimportant information.
As an example, buyers may not come out directly and ask, but some buyers may try to find out how the salesperson is paid. Smart buyers know that if the salesperson is paid based on revenue only as opposed to profits, the salesperson may be willing to go lower in price. Using this knowledge, the buyer will try to get the salesperson to be an advocate for lower pricing.
Another simple point of leverage is current sales performance. The salesperson’s current sales performance or company performance is another key piece of information. Buyers know that if the salesperson or their company are behind plan, they will generally be more desperate and willing to be flexible on price.
Company quality and performance issues are another area of leverage. The buyer may fish for information. If you’ve had a quality or service issue with the buyer’s business, you need to be honest about it. However, if you haven’t and the buyer seems to be fishing for information, be careful. The buyer may simply be looking for information to use as leverage against you during the negotiations. In this case, they will use the service or quality issue as a rationale for why they should pay less.
These are just some common examples of information smart buyers will try to extract from you. There are many other types of information that can be used as leverage. Just remember, knowledge is power during negotiations and loose lips can sink your margins
To learn more about value-selling, watch the on-demand version of Chris Provines’ latest webinar “Winning with the New Healthcare Buyer: Selling Strategies to Defend Your Value.”