Here’s my list of mistakes sellers often make that torpedo sales deals.  Check out our sales agreements here, or dive into our comprehensive sales agreement that covers almost every key sales contract issue here.

(1) Insufficient Understanding of Customer.  Do not fail to take the time to understand the customer and the specific business needs the customer has, in particular, focusing only on explaining your products and services without trying to guide the customer as to how a particular product/service can solve her problem.  As TechCrunch recently pointed out, make your sales explanations simple.

(2) Focus on Customer’s Budget, Not Customer’s Needs.  Do not focus on how much the customer has in the budget or wants to spend.  Instead, focus on the customer’s pain, and explain how your good/service will alleviate her business suffering.  This will do a much better job of motivating the customer to meet your price.

(3) No Hard Deadlines.  Do not show an unwillingness to agree to hard deadlines for delivering products and completing services, making it likely that the customer’s project will not come in on schedule.

(4) No Clear Fees.  Do not show hesitance when asked to agree to a definite price that can’t be increased at a later date, making it likely the customer’s project will come in over budget.

(5) Unclear Customer Responsibilities.  Do not do a poor job of explaining what the customer needs to do to be able to incorporate and fully use the goods/services (such as necessary platforms or site preparation).

(6) No Access to Key Stakeholders.  Provide access to everyone on the seller’s side who needs to sign off on the deal.  If you are missing your key people, this results in unnecessary emails, numerous contract versions, and fruitless meetings.  The best situation is where all necessary stakeholders on both sides get on the phone, review the contract language, agree on revisions, and close the deal.

(7) Long Contracts.  Do not send unnecessarily long contracts which mean more work for everyone in reading, revising and negotiating the language.  Even the most complex deals can usually be covered in a relatively short number of pages.

(8) Unclear Contract Language.   Do not send contracts full of ambiguous language which are not clear as to exactly what is being purchased, at what price, following what deadlines, and specifying the customer’s duties, if any.

(9) One Sided Contracts.  Do not send contracts heavily weighted in favor of the seller, so that time has to be wasted and legal fees spent negotiating a compromise version.

(10) Not Moving the Ball Forward.  If you send a customer an email, it should only be to elicit specific, necessary information, or to fully respond to a customer’s request for information.  That’s it.  Any other email wastes the customer’s time.  If you have a conference call, you should have a prepared agenda acceptable to both parties and you should have everyone on the call ready to accomplish all agenda items.  Too often, a key person is not available, or an essential stakeholder is unprepared to discuss and execute a key topic.  Avoid this.

These mistakes make negotiations interminably long, or cause them to fail, mainly because the seller spends so much time creating complexity that the seller is unable to clearly describe the deal.  By not answering key questions at the outset, the transaction costs for deals end up being too high.  In particular, legal fees are greatly increased because the lawyers have to spend so much time tunneling through the complexity.  Also, the more complex you are in describing your deal, the more you give the lawyers to argue over, which means more time and more money.

Instead, focus on keeping everything simple.

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