The Science of Negotiating on the Phone
Negotiating is one of the most valuable skills I think a person can have. As a part of my foray into reading a book a week, I stumbled on a book called Cold Calling Techniques: That Really Work by Stephan Schiffman.
If you’ve ever been involved in sales, you may know what cold calling is. Cold calling is simply calling a potential customer in order to try to sell to them. This is a way of reaching out to new people to see if they’re interested in what you’re selling. But this isn’t only relevant to sales, but to business in general. And not only business, but strategies from this book can apply to negotiation on the phone in general or even face to face. The think I like about this book is that it’s practical. There are specific steps and scripts to follow. It’s awesome. Check the book out. I highly recommend it.
Anyway, the idea of cold calling seems specific to sales, but if you own a business or ever want to own a business, reaching out to new people and getting them to say yes is super valuable. Most people tend to believe that this isn’t a very effective way to get customers, but according to the author, most people do it wrong.
I’ll give a quick outline of many of the highlights from the book, but if you’re interested in this stuff, there’s a lot of awesome stuff in the book, so pick it up yourself!
Here’s what I learned!
What’s the number one reason why businesses fail? A lot of people will have many different answers to this. Lack of motivation, lack of interest in the product, bad advertising, poor website, bad management, etc.
Those may all be true. But the thing that contributes universally to the failure of any business is simply this: Lack of sales.
Lack of sales.
Obviously. Right? So in order to prevent the thing that will cause us to fail, we must sell more.
Another interesting question: If you’re in sales or have a business or even in your current workplace, you will have competitors. Who is your biggest competitor? You might want to say your coworkers. Or the other business down the street. Or you may even say that you are your greatest competitor.
Again, the author throws in a surprising, but obvious answer to the question. The status quo. “You’re up against the way your prospects are doing business right now.” If we understand how our prospects are doing business, the way things work and the way things currently are, we can be smart and overcome that to become successful.
Here are a few tips to putting yourself on your way to overcoming the status quo.
- Reduce the sales cycle: Make appointments faster, call back tomorrow instead of in a week, follow up more quickly, etc.
- Time is money. Don’t waste time on sales. Max of 3 sales calls (or less). If you spent too much effort pursuing one client, that’s valuable time you could have spent chasing entirely new clients.
- Know your numbers. Know your conversions. Know your yes to no ratio.
Here are 5 very simple ways to double your income. Do these things and you’ll become more successful reaching people and getting them to say yes. It’s simple math.
5 ways to double your income:
- Double calls
- Get through twice as often
- Get twice the number of appointments
- Close twice the sales
- Generate double the dollars per sale
Selling is a numbers game. In order to sell more, we have to work harder in certain areas. Double any of the variables in the sales process and you double your sells. Check this out: Double two of those variables an you quadruple your sales.
If your income depends on how many people buy your product, and your process to get someone to buy your product looks like the following, it’s a simple math formula to determine how to increase profit.
Does that make sense? What this means is, if you get through twice as often, get twice as many as appointments, and close twice as many offers, you get six times the profit. Wow!
That formula may not be exactly the same as whatever you do. This formula is what the author Stephan Schiffman does when he calls prospects. But let’s apply this to something totally mundane like washing dishes. It still holds true.
Imagine you have a dishwasher where you put in 20 dishes at a time. The dishwasher takes 30 minutes to finish. That’s 20 dishes in 30 minutes. Maybe you upgrade your dishwasher to a commercial sized one that can wash a load of dishes in 10 minutes. That effectively cuts the time washing by a third which triples the total number of dishes washed.
Enough math for now. When we’re calling someone with an offer and we want them to listen to us long enough to schedule an appointment (in the author’s case), or give us an email, give us a name, etc. Whatever we want them to do – These are the mechanics of those calls:
Cold Call Mechanics
- Get the persons attention in an open ended way that invites conversation – Gimmicky questions get gimmicky answers. Stupid questions get stupid answers. “Are you interested in (X)?” “No” / “Do you currently have (something related to X)?” “Yes/No (but remains open for conversation)” / Best way to get attention? “Good morning, Mrs. Jones.”
- Identify yourself and your company – give a mini commercial in your call and not only state who you’re with, but qualify it. “I’m with (X). We help (Y) with (Z).” Or “We’re the top (X) company in (Y) doing (Z).”
- Give the reason for your call – Recommended to specifically say “The reason I’m calling you today specifically is to set an appointment so I can (value statement).” Be clear with what you want. Don’t hide the reason for calling!!
- Make a questioning or qualifying statement – “I’m sure that you, Mrs. Jones, just like a lot of the other companies I work with, are interested in increasing your online sales.” (Silence – taken from ‘Negotiating like your life depended on it’)
- Set the appointment – “That’s great! Will you be free for a call Tuesday at 2:00?” This must be direct and brief.
Tip: Use a mirror!
Studies have shown that your body language reflects how you deal with people on the phone and therefore how they respond. Look at yourself in a mirror while you’re making a call. If you wouldn’t want to talk to you, neither do they.
Turning Around Common Responses
If someone hears that you want to sell them something, what do they normally say? If someone wants to sell you something, what is your first reaction? Here are four common responses and how to deal with them.
- “No thanks, I’m happy with what I have.” – “Other people we work with like (X) have said the exact same thing before they had a chance to see how what we do compliments (fits into, supports, etc) what they’re already doing. How about I set you up with an appointment to call Tuesday at 2:00?”
- “I’m not interested.” – “Well, Mrs. Jones, a lot of people had the same reaction you did when I first called – before they had a chance to see how what we do will benefit them.” Very similar answer to number 1.
- “I’m too busy.” – That’s fine! The goal isn’t a conversation, but an appointment. “That’s okay! The only reason I’m calling was to set up and appointment with you to discuss (value statement).” If they retort with a different answer, reply with the script already laid out. If they continue to press that they really are too busy, just say you’ll call back later. And really follow up!
- “Send me some literature.” – Most of the time, literature is ignored, even if they sincerely mean that they will look it over, consider it, and get back to you. Instead remember the main point is getting an appointment! “Can we just get together?” or “Can we just schedule a time to chat? How about Tuesday at 2:00?” Simple as that.
Turning Negative Responses into Positive Outcomes
When someone gives you a negative response, you can turn it into getting a positive outcome. If a call goes on long enough and the prospect gathers enough information to believe that they don’t need your services, you can use many of the same responses from earlier.
Them: “Now that I’ve heard a little about what you do, it seems like we already are comfortable with what we have.”
You: “Actually, many other people/companies I’ve worked with had the same response before they see how what we do compliments what they’re already doing. We really should get together! How about…”
If the no persists, use the valuable phrase:
“I’m just curious…”
If you find an opportunity to allow the prospect to expand on what it is they do, you can use this question to open up a way to find something you really can add value to!
Them: “We already have a company who does digital marketing for us.”
You: “I’m just curious, what is it they do for you?”
You: “That’s great! Because a lot of other companies we work with do the exact same thing and we add on to that…”
Leaving Messages that get Results
The trick, it seems, to leaving messages that get results is not giving too much information in the message and letting out a hook in the form of a reference to get them to call you back.
There are two kinds of messages you can leave that work most effectively. One that references a company name, and one that references a person. “Hi, this is Cody with XYZ Company. My number is… I’m calling in reference to ABC Company. Looking forward to hearing from you!”
The idea here is to use the name of a company they already work with who you can supplement or give the name of a company you’ve previously worked with that they would be familiar with.
The second kind of message you can leave is in reference to a person. This one supposedly gets an incredibly high return-rate. Simply reference a person’s name in the message. “Hi, this is Cody with XYZ Company. My number is … I’m calling in reference to John Smith. Give me a call back when you’re available.”
If there is no company or person to reference, you can use a third kind of message, simply getting straight to the point of your call. “Hi, this is Cody with XYZ Company. My number is… The reason I’m calling is to set up an appointment. How’s Tuesday at 2:00?”
The Sales Process
- Information Stage
- Presentation Stage
- Closing Stage
Steve says that the purpose of the first step, Opening, is merely to get to the next step. That’s really the purpose of each step. If step 4 isn’t successful, then step 3 wasn’t adequate. If step 2 isn’t allowed to begin, it’s likely due to a poor step 1.
This is just a brief, friendly, getting-to-know-you step. It has to come first. Here you develop a friendly attitude with each other and build rapport.
The most important question to ask yourself in this phase is “Do I have enough information to make the right presentation?“ This phase should take up about 75% of the whole sales process. Steve says in this chapter “The key to successful selling is finding out what people do.” Aside from asking people what they need, in this phase, you need to ask them as much as possible to gather information about they they do. When you know what they do, you’ll know where you can come in and supply value.
The presentation requires information to be gathered. This is where you fit your product or service into their needs.
Steve recommends the phrase, “Makes sense to me; what do you think?” This is short, sweet, and to the point. It invites response in a friendly way and is a simple way to close the sale and get a yes or no.
Principles of Sales
- All steps lead to the next step
- The difference between success and failure is 72 hours
- All objections and responses can and should be anticipated
- Follow-through is an integral part of sales
- You must find out what the prospect does
- Prospects respond in kind
- It’s necessary to ask for the appointment
All of that is some of the stuff that stood out to me from the book Cold Calling Techniques: That Really Work. It was a surprisingly insightful read. If you got something out of this blog, go buy it yourself and learn some stuff! If you’ve read this, or if you have other calling strategies or negotiating strategies that are helpful in brief conversations, please comment below! I love to discuss and learn new things! Or if you picked something up from this blog yourself that you thought was interesting or intriguing, I’d love to know!