This is an excerpt from Tom Searcy's latest book, "How to Close a Deal Like Warren Buffett--Lessons from the World's Greatest Dealmaker" written with Henry DeVries and published by McGraw-Hill, available now.
When Warren Buffett bought Barnett Helzberg's jewelry business, "Helzberg Diamonds, he followed the most important sales principle in doing large deals—he solved the other person's problem.
As Barnett Helzberg put it;
"I knew we could trust him to keep the headquarters in Kansas City, resist changing the company's character, and retain the jobs of all of Helzberg's associates. It might have been simpler to sell to the highest bidder, but that notion seemed as sensible as choosing a brain surgeon based on the lowest price rather than on talent and reputation."
It is easy to assume that because Buffett has so much money, he wins deals by writing the biggest check. It would be equally easy to assume that you win deals on the lowest price bid only. Both assumptions would be wrong. Buffett often is not the highest bidder—he wins because he sells his solution as a better option to solving the other person's problems. Often his price is considerably lower than the other person could have gotten from another buyer.
How do you get to the real dealmakers?
1. Start with the dealmaker's problems. Most senior executives in companies are in place to solve problems. Those problems focus around changing the business outcomes in areas of time, money, and risk. You get sent to whom you sound like, and if you sound like someone who solves those problems then you will be taken to the senior person who has those problems. That language is different than a middle level manager who is looking to hire a vendor or select a supplier to fulfill a completely identified objective or scope of work. Here are some examples of the right language:
- Reduce overall energy spending by more than 10 percent within the next year.
- Get regulatory and tax-incentive on "green" initiatives.
- Finish a higher percentage of projects ahead of schedule
If you are about solving problems, you will get to dealmakers. If you are selling services, you'll get delegated to someone lower on the food chain.
2. Be specific in the language of outcome changes. Once you have the attention of a dealmaker you need to move quickly. Knowing their problems is important, making a clear claim to the improvement you offer in the outcomes is even more so. Precise language has more power than generalities. For example:
- $250,000 first-quarter hard-dollar energy cost reductions
- $500,000 tax credit for green initiatives
- 97 percent on-schedule completion of installations
You may not be able to say with precision what the actual performance will be for that company, but you can speak in specifics about what you have done for similar companies in similar circumstances. Those claims need to be stated, or you will be delegated.
3. Anchor your claims with names. Few want to be first, but no one wants to be last. When you are looking to sell your biggest deals, your buyer will want to know that your claims have happened for other credible buyers. This is a time when name-dropping is not crass; it's crucial. Make certain that the examples you give are relevant to the buyer.
Getting the engagement of a dealmaker starts with his or her problem, not your offering. Understand the language of buyer's problems and you will get to the real dealmakers.