How to Ensure You are Ready to Close a Deal
Have you heard, “Close early, close often, and always be closing?” The phrase might generate some questions:
- What does that really mean?
- When should you start preparing for closing negotiations?
- Do you remember the questions that you should ask yourself?
Well, we have answers. There are five questions to ask yourself to help you decide if now is a good time to start your final negotiation preparation.
- Does your buyer have the power to buy?
Remember – a basic concept of selling is that you can’t sell to someone who can’t buy. Before you go any further, you should make sure that there is a buyer with decision making power, out of the people you have previously met, who will be involved in the negotiation. They should have a final say on the outcome and be supportive of your solution. If you don’t have anyone in mind, you need to find someone and win them over before closing.
- Is payback agreed to?
Before you move towards closing the opportunity with final negotiations, the buyer with decision making power may use your price to negotiate you down. This is tough to resist if you have not established a comparable value for the price. It’s important that the decision maker agrees to some form of value justification and estimated ROI for the project.
- Do you have the legal, technical, and administrative approvals you need in order to close?
Most organizations have procedures and processes that must be adhered to as a part of any purchase decision. Make sure to be aware and that you have all the necessary approvals.
- Are the key evaluations completed?
You must ensure that all of the activities that were jointly agreed upon with the buyer decision maker have been completed and communicated. Normally, these activities are captured as part of a collaboration or evaluation plan, making it relatively simple for you to check its completion.
- How long has the buyer known the deal cost?
In many organizations, buyers – even the decision makers – have to build support for a purchase decision. If the buyer doesn’t know the total cost for the project or hasn’t known it for a very long time, moving towards closing is risky. Unknown costs significantly increase buyer risk, which leads to larger concessions at best, or a loss to no decision, at worst.
If any of your answers to these five questions are negative, do not move to the close. Go back and take action, addressing the negatives first.