How to Close a Deal Like Warren Buffett
By Tom Searcy and Henry DeVries
(McGraw-Hill, 217 pages, $24.95)
When Warren Buffett makes a deal, it's usually quick, as with the purchase of Nebraska Furniture Mart. Rose Blumkin, the 89-year-old founder and owner, told him one day she was tired of fighting with her children about running the company and wanted to slow down. "Rose, I've always told you that when you were ready to sell, I would buy. What's your price?" he replied.
Within an hour they shook hands and he gave her a handwritten cheque for the $55-million she requested. No lawyers, no muss, no fuss – and an excellent deal for both parties.
Given Mr. Buffett's successful deal-making, authors Tom Searcy, a sales consultant, and Henry DeVries, assistant dean of continuing education at the University of California, San Diego, figure salespeople can learn from his approach. "If you want to know about making big deals, Warren is still the guy to watch," they write in How to Close a Deal Like Warren Buffett.
It starts with knowing the other guy's money. Mr. Buffett knows how the other company makes its money and how it spends it. Too often, salespeople are so busy selling their product or service they don't focus on the ability of their offering to make the numbers better for the company they are wooing.
The authors recommend a process they call "the triples" that will help you make the case for your product or service:
Triple 1: The prospect's three problems
First, find out – and write down – the three biggest problems the prospect faces in the area your product or service can help. This aligns you with the buyer's interests.
Triple 2: Your three-part solution
Now think carefully about how you can solve each problem. As you write it out for the client, remember that generic language such as "improved," "better," and "big difference" are not that compelling. Use actual numbers and refer to specific pressure points to focus on the outcomes your prospect can expect.
Triple 3: Your three references
The third step is to identify at least three references you can share who have experienced similar outcomes when using your products and services. This may be sensitive, given confidentiality and competitive issues. But the authors stress: "The most effective way to get the attention of prospects is to drop the names of others just like them."
The authors urge you to become a student of psychology and develop profiles of members of the prospect's team. Try to determine each person's fears, since those qualms may send your pitch into the ditch. Determine each person's point of view about your solution, as well as any other personal trait or event that might be of importance. At the same time, study the team dynamics, from where people sit around the table to who they defer to.
The most dangerous person will be "the eel." The authors insist that "in every deal, and at every prospect's table, there is always an eel – a person who is against the deal. Always. Eels have a tendency to hang out in the shadows. They are hard to get to, and they usually talk you down when you're not around."
Usually eels are driven by fear that they don't want to acknowledge, so instead they insist they are against the deal on principle. They are dangerous, and must be identified early. Then you can try to co-opt them, taking the eel's ideas and baking them into your proposal.
Another possibility is to contain the eel – conceding all the person's small issues and turning the conversation to the bigger issues, where their influence may not be as significant. You also might try to divert the eel to another issue that is not part of your deal.
When preparing your final presentation and proposal, the authors urge you to make sure you include something for everyone involved in the deal. The finance people, for example, want to know all the numbers.
"Everybody who reads your solution is looking for something aimed at her. Not only does she want to see that it's in your solution, but she also wants to see it the way she wants to see it … It's not enough that this particular material is in your solution. You are responsible for making it pop off the page for the person who is looking for it," they write.
At some levels, this is a woeful book. The connection between Mr. Buffett, who buys companies, usually quickly, and salespeople selling to companies, usually slowly, is actually quite tenuous. Readers therefore will risk intellectual whiplash as they flip from the opening section in each chapter on some aspect of Mr. Buffett's deal-making to the substantive, though often tangential, advice that follows on selling.
But what saves the book is that the authors have some useful, often unique, tips about the sales process that might just help you in your next non-Buffett-like deal.
Here are some more recent books about sales:
Joe Girard's 13 Essential Rules of Selling (McGraw-Hill, 278 pages, $19.95), by the man recognized by Guinness Book of Records as the world's greatest salesman for 12 consecutive years, shows how to be a top achiever.
Supremely Successful Selling (John Wiley, 216 pages, $29.95), by consultant Jerold Panas, takes you through the stages of selling.
Winning More Business in Financial Services (McGraw-Hill, 224 pages, $43.95), by sales trainer Michael Salmon, offers advice on referrals and networking.
Special to The Globe and Mail
Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance. E-mail Harvey Schachter