Chapter 28 - What Guarantees Can You Give Me?
Selling is the business of making promises to people that they will receive benefits at some point in the future. From the perspective of the salesman, a sale is a success when the prospect pays the bill. For the prospect, it is a success when their needs are met.
When making a decision to enter into a contract with a company, a prospect must consider not only the degree to which the outcome would benefit him, but also the probability that the product or service will actually deliver the benefit promised, as well as the probability that the product or service will be delivered at all.
In product selling, it's generally understood that the buyer is getting a physical item - the thing in the box, and by giving them ownership of the thing, the seller has completed his obligation. (EN: a bit of an exaggeration, as customers can return products, and a bit short-sighted, as customers who done the item to be unsatisfactory will not likely buy a second time.)
In services selling, the service is not as simple as a thing-in-a-box but is a written description, in the contract, of activities to be performed and outcomes to be achieved by the service provider. As a legal document, the contract obligates the seller to provide a service, and the buyer is obligated to pay when the terms of the contract are met.
Contract language is often written by attorneys, whose interest is in crafting language that very specifically defines what is to be done, such that it is legally defensible. They detest ambiguity, but at the same time their attempt to be specific often leads to a document that is entirely incomprehensible to the layman.
And while there are instances in which the verbiage of a contract is crafted to the advantage of one party over another, using convoluted verbiage to disguise the fact that they aren't going to do what may have been verbally indicated, the general intent is to be clear - but that takes a great deal of effort to ensure that both parties get what they expect of one another.
Consider the difficulty in getting two people to agree on the precise state of an office that has been "cleaned" and the disagreement that can arise over whether the job has been done properly, particularly with a fastidious client who will refuse to pay until the work is done to his satisfaction - hence the amount of description that is necessary for both parties to feel happy with the agreement.
(EN: I have the sense that the need for granularity is often overblown and entirely unnecessary. In B2B sales, likely so, though I've been in situations where the time spent negotiating a contract cost more than the value of the contract itself. It's likely the author's experience dealing with customers and selling a service that's only vaguely connected with its benefit have made him a bit sensitive to this issue.)
Problems in Negotiating Guarantees
A common problem in making guarantees is that clients expect ironclad guarantees of service in an uncertain future. (EN: in fairness, both sides seem to do this - they want the other side to make firm commitments to do something, but to have flexibility in the commitments they must make in return. It's particularly ironic, but not at all uncommon, when there are dependencies - such as a client who insists paychecks must be delivered at 8 am on Tuesday but will not commit to providing the employee timesheets on which those paychecks must be based by noon on Monday.)
The author writes a fictional dialogue in which a customer is demanding that a Web site be completed by a give date without telling the seller what it must contain, and the seller waffles because she genuinely cannot give an answer without further information.
The essential problem is that a salesman who wants to make sure they can keep the promises they make will end up avoiding making any promises whatsoever - as such it's a difficult balance.
Guidelines for Negotiating Guarantees
The author meanwhile waffles in providing advice about avoiding waffling. "Don't overcommit ... [but] don't undercommit" is immensely uninformative. He also suggests qualifying promises with phrases such as "it should be possible to ... [promise] ... if we don't run into any unexpected issues" until such time as you can work out the details.
The contract can spell out specific terms and, so long as it does not differ significantly from the spirit of a verbal agreement, clients will not feel they have been misled. (EN: A caveat is that sometimes seemingly minor details are critical to the customer - a day later is sometimes a deal breaker.)
The author rewrites his previous dialogue, such that the salesman pulls a few tricks to give the appearance of making a commitment without actually committing:
- The salesman makes reference to the amount of time it takes "in our general experience" to do work of similar scale (EN: which is true, but dodges the question of when the client can expect their work to be done)
- She states "I can't make an absolute commitment ... but we can aim for" a date (EN: Another phrase that sounds like a commitment, but "aim for" indicates nothing.)
- She offers to write milestones in the contract that will enable them to "check that we're on track" (EN: The milestones are checkpoints, but there is no indication they will actually be met)
- She names a date as a "stretch goal" for a contract (EN: This phrase is tantamount to saying it would be a minor miracle if the date was actually met)
- She suggests adding a "rush fee" to the contract so her people will have incentive to make an ambitious date (EN: That is a very greasy trick - her firm do the work at the regular price at a later date and "lose" a bonus they never intended to earn. This can also be used as a way to get extra revenue by pretending a date is difficult to make when it is not. Caveat emtor, every time.)
- She stresses that she has to clear the agreement with others in her organization before it can be considered a formal commitment. (EN: This is not necessarily bad - it's sometimes a trick to be able to back out of an agreement, like a salesman who must run a deal by a "manager" to whom the customer is not permitted to speak, but in the best of cases a salesman can speak in loose terms and make estimates subject to validation.)
The author describes the revised conversation as "win-win" (EN: but it's clear that the salesman has won the business and the only thing that the customer has come away with is false expectations based on noncommittal statements.)