Dealmaking Basics

Tips for negotiating your way to a smooth sale

By Tony Parinello • May 12, 2003

Opinions expressed by Entrepreneur contributors are their own.

Q: I'm trying to get back to basics with sales negotiation. Can you provide me with a plan for making contacts and then negotiating sales contracts for my services? What is the best approach in seeking to become a company's preferred service provider?

A: I'd like to divide your question into three different parts: contacting, approaching and negotiating. Here's why: Although they all require a different set of skills and tactics, they're interdependent upon each other.

Let's focus on the end you have in mind, where negotiations typically take place. I'll set the stage here because if you contact and approach the person you'll ultimately be negotiating with, your entire sales process will run smother and faster.

Learn to negotiate with prospects by adopting the following guiding principles of "top-down" negotiating:

  • Always maintain a balanced commitment. The rule of thumb here is every time you do something, you must ask your prospect to do something of equal or even greater value toward making that commitment of working with you. This way, both parties build equity and loyalty within the relationship bank account. Depending on your situation, set the expectations of your prospect by saying something like this:

"After our meeting, I'll be asking your organization to sign a letter of intent." Highlight the critical terms and conditions of your agreement at the outset of the business relationship. In other words, during the earliest stages of the business relationship, you should present your contract, terms and conditions in a document that includes potentially challenging clauses and then ask directly for the prospect's input. Say something like: "Take a look at our terms and conditions, and please let me know if anything you see concerns you."

  • Ask directly for direction. For instance, say, "What do you think we should do next?" Chances are, your prospect loves to issue orders. If for some reason you haven't gotten yours, issue this invitation: "Which one of your team members---Catherine Jones, Heather Steven, Alfred Russo or Jack Reasons---would you like for me to continue this conversation with between now and the end of the business week?" Make sure you're very specific with the names of the individuals. You should never ask, "Who on your team would you like for me to continue this conversation with?" This clueless approach will not yield the proper result.

Of course, for every rule that I recommend, there are a few you must avoid. Never, ever...

  • Make claims that you're uncertain about something. Don't say, "I am sure we can modify the faceplate to accommodate your logo." It's much better to add a bit of uncertainty at the early stages of any business relationship. Instead, try this: "I'll have to check with our manufacturing manager. Our process is very well-defined, and changes must first be approved by our quality engineers." Don't use the words "I think;" they have a way of getting you into trouble!
  • Make vague and unfounded guarantees. If you're asked about your product's guarantee or warrantee, provide a written copy rather than a verbal overview that may be misinterpreted.

Ignore any early signs of a mismatch between your prospect's business and culture and your business's culture. Example: Your prospect manufactures and sells the cheapest widgets on the market, while your business sells the most expensive office equipment in the world.

Start implementing my ideas and suggestions into your sales process, and next month we'll explore ways to approach your prospects with compelling reasons to invest in your products, services and solutions that will result in an easier and faster-than-expected sales process. I guarantee it! (Oh, wait a minute...I better get you a written copy of my guarantee!)

Tony Parinello is the author of the bestselling bookSelling to VITO, the Very Important Top Officer. For additional information on his speeches and his newest book,Secrets of VITO, call (800) 777-VITO or visit

The opinions expressed in this column are those of the author, not of All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.

Tony Parinello

Tony Parinello has become the nation's foremost expert on executive-level selling. He's also the author of the bestselling book bearing the name of his sales training program,Getting to VITO, the Very Important Top Officer, 10 Steps to VITO's Office,as well as the host of Club VITO, a weekly live internet broadcast.

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