Today, David Fields of AscendantConsulting.com (I recommend going to his web site and signing up for his excellent “Insight” newsletter) and I conducted a conference call for the International Association of Contract and Commercial Management.  You can listen to it here: Close Sales More Sales Deals Faster (it lasts a little less than an hour and includes role plays to make the lessons more apparent and fun to listen to).

David directs the Ascendant Consortium, a group of elite, independent consultants with an unmatched record of success helping individuals and companies achieve their goals.  Prior to being tapped by the Ascendant Consortium, Mr. Fields was the lead partner at a national management consulting firm where his work included optimizing growth strategies and moving companies into new markets.

During the call, we covered the following topics:

I. KEYS AND PRINCIPLES: BUY, PAY, GET, DO, TRUST.   The key business issues that need to be clearly spelled out in a contract are “Buy, Pay, Get, Do, Trust.”  David speaks about the sales concepts of “Getting to No” and “Net Preference”.  You can learn more about these concepts in the “Insight” newsletter.

1. BUY – What Is Being Bought/Sold?

The Discovery Phase: Vendors often use unclear terms such as “Solution” or  “Server”.  Customers should either know exactly what they want, or set up a low price initial phase where the vendor works with the customer to design a specification.  Vendors should, based on their own internal sales constraints, use a discovery phase to be able to focus in on what the customer cares most about.  Remember, at the end of the day, the only possible things to sell are a good/product/deliverable, or a service.

2. PAY – What Is the Price?

Clear Budgeting and Forecasting Is Essential. Vendors often demur on providing an exact price, often because there is lack of clarity as to what is actually being sold.  The price often ends up being a “moving target” during negotiations and even after the contract is signed, which causes internal budgeting problems for the customer.

3. GET – When Will the Deliverable/Service Be Provided for the Customer’s Use?

There Must Be a Clear Due Date for Performance. Vendors often don’t provide a clear completion date, or will provide a date at which point some of the work will be done, but not all, so the customer is still not ready to go, dashing customer expectations.

4. DO – What Must the Customer Do So the Vendor Can Hit the Deadline and Not Add More Charges?

Clear Customer Responsibilities Must Be Spelled Out.  Avoid vague language such as “Customer will provide all reasonable and necessary resources” and focus on clear language such as “Customer will provide a 10 foot by 10 foot room with a temperature maintained between 50 and 80 degrees at all times, and provide electric service and a T1 Internet connection.”

5. TRUST - Is the Contract Clear as to the Above Issues?
A Clear Contract Prevents Disputes. If not, the negotiation can take a great deal of time, involving the exchange of many versions and many meetings, ultimately resulting in a contract with language that involves a series of compromises.  A contract that is clear prevents disputes and creates trust because if, at a later date, one party makes an unreasonable demand of the other, the parties can then review the contract and find that the unreasonable demand is not allowed.

II. MANAGING YOUR LAWYER: NEGOTIATING BUSINESS TERMS &  CONTRACT VERSIONS.

1. There Is Nothing New Under the Sun – The Salesperson and Customer Need to Know Ahead of Negotiations:

1.1 Buy, Pay, Get, Do and Legal Positions: What Are Your Positions on What Is Being Purchased, at What Price, for What Delivery Date, What Do You Need to Do, as well as What Are the Legal Positions?
1.2 The Lawyer: Discussions Should Involve The Lawyer or a Way to Manage the Lawyer if Legal Approval Is Necessary.
1.3 Backup Clauses: Backup Positions Should Also Be Decided, Leaving the You Prepared for Almost all Negotiating Possibilities.

2. Take the Lead: The Client Should Take the Lead on Negotiating Business Terms Issues, Not the Lawyer.

3. Decide Level of Risk: The Client Should Ultimately Decide Legal Terms Involving Risk Such as Limitation of Liability and Indemnification.

4. Too Many Versions, Too Much Time: Once the Client Sees Many Contract Versions Exchanged, or Too Much Time Has Elapsed, the Client Should Ask for a Negotiation Conference Call With All Stakeholders to Try and Agree on Final Language and Close the Deal.

If you enjoy this content, add me at twitter.com/JasonAnderman, thank you.