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The trick to measuring real progress on your deal
Dear Remora - I’m in the early stages of negotiating a partnership that would be nothing short of incredible for our early stage company. Unfortunately, our CEO is way too excited. If he over-hypes this deal to our board and it falls apart then I’m afraid I will get fired.
How can I set realistic expectations with my CEO?
Dear Ellis - when dating, I’m sure you look (or looked) for the signs. I did. Everyone does.
Did they reach out to me or simply reply when I texted? Did they suggest we meet again? Did they introduce me to the important people in their life?
The same signs exist in partnerships. And reading these signs accurately is how you set realistic expectations - for yourself and for others, including your CEO.
You do this by letting your partner’s actions do the talking. This is called bargaining to advance.
I first learned about bargaining to advance years ago from Jeff Hoffman, one of the world’s great sales trainers. Jeff has trained thousands of sellers, advised deal teams at many tech companies and lectured on deal-making at HBS and MIT Sloan.
Here’s how you bargain to advance …
First, ask yourself what your key deal milestones?
In any partnership, there are key stages and milestones in the lead up to an agreement. These milestones act as gateways to the next stage of the deal …
The key question for you: are you pushing your partner forward through these stages and ignoring the signs that they just nodding along with you but not truly committed?
It can be hard to tell.
Here’s how you measure your progress …
Craft your deal scorecard
Bargaining to advance starts by making two lists and prioritizing them. These two lists serve as your deal scorecard:
Your ranked wish list - make a list of all the things that you want from your partner. This list should include everything from an org chart, NDA, legal redlines, introduction to your contact’s boss, etc. Then stack rank this list from most valuable to least.
Their ranked wish list - make a list of all the things that a serious, committed partner wants from you on the way to signing an agreement. This list could include a demo, technical documentation, ROI calculator, sandbox account, executive meeting, etc. Now stack rank this list from most valuable to least (least valuable = easiest for your partner to provide).
Every time your partner asks for something from their wish list then you ask them for something of similar value from your wish list. If they agree to give you something from your wish list then you are making progress that is backed up by their actions ... not just their words.
What bargaining to advance sounds like externally
Technical Call - “Yes, if you are ready for a more technical discussion then I will invite our lead Product Manager to join that call. I know she will be excited to discuss this with a technical counterpart on your side. Is there someone from your Product or Engineering team that you can commit to having join our technical discussion?”
Pricing discussion - “Sure, I can share with you our pricing model. We can share that during our next call with leads from your Finance, Marketing and Product teams so we can answer their questions. Can we agree on that as our next step together?
Contract review - “I’m glad to hear that you’re ready to review a contract. Do you have a lawyer assigned yet on your side? I can send it over to both of you later today.”
What bargaining to advance sounds like internally
“It was a great discussion, they sounded super interested,” are words you should never utter or accept from others on your team. That is meaningless fluff.
Make your words matter. Focus on evidence-based deal updates:
“They asked for a technical review and agreed to bring their CTO. Before we get more teams involved, let’s see if she comes to the meeting on Tuesday and agrees to move forward.”
“They sent us back contract redlines but have not yet shared if they have an executive sponsor on this deal. Until they confirm that, my view is that our odds of this closing this year are 50-50.”
Why bargaining to advance works
Bargaining to advance brings structure to a process that is typically ambiguous. Bargaining to advance forces you to only “count” the actions and asks of your partner … not mistakenly give yourself “credit” for nudging your partner forward.
For more valuable deal-making tactics from Jeff Hoffman, checkout Tuesdays with Hoffman.