Question of the Week: Deal Breakers: Knowing When to Walk Away from a Bad Deal

Deal Breakers_ Knowing When to Walk Away from a Bad Deal _ Groove Blog.png

Welcome to our “Question of the Week” series of blog posts where we will address some of the most common issues sales teams deal with on a daily basis. We welcome your questions and comments, so don’t hesitate to reach out if you have anything to add.

In sales, sometimes, the best decision you can make is to walk away. But how do you know when it’s that time?

Learning to recognize the warning signs of a bad deal will help your reps avoid wasting their valuable time so they can refocus on deals that have better potential for success.

Drop the ego: take your emotions out of the equation

The best sales reps are ones that can connect emotionally to their prospects. However, these qualities can sometimes work against them. If the focus is too much on the “win,” it can be highly detrimental to the process as it places too much emphasis on the result and obfuscates rationality.

Give yourself permission to walk away

The “close-at-all-costs” approach can complicate the sales process beyond its potential to deliver a positive result. Once a rep starts to see that a deal is going south, it is important for them to start developing an exit strategy. What are the minimum terms you will accept? What is the minimum price before it’s not worthwhile anymore? These points are essential to articulate in advance, so that as little time as possible is wasted.

Resist the urge to push back

Sales should be a balanced process, with both sides bringing something to the table. If the rep feels like they are the only party with something to add to the conversation, it may be a sign that the deal is not worth your time. Continuing to push towards a dead end may come across as desperation, which is never a position of advantage.

Stay in control

At all times throughout the sales process, it’s crucial that the prospect believes you are in total control. If you aren’t, the perception may be that a deal can be manipulated in their favor. No matter what the reason, even if you are trying to make an end-of-the-month quota, the long-range implications of this behavior are never positive. It will diminish your credibility, your reputation, and that of the company.

Keep your pipeline full

Hinging all your hopes on one deal is never a good idea. If it goes south, you stand to lose everything—time, energy, and resources—time that could have been better spent on a deal with greater potential. Keeping your pipeline well-stocked is the key to maintaining balance. If one deal falls through or if you have any indication that it’s about to, you can feel confident about moving on and focusing your attention on a more worthwhile deal.

If it’s “too good to be true …”

Platitudes aside, there is a lot of veracity in the phrase “if it seems like it’s too good to be true, it probably is.” This statement applies to a lot of things, but in sales, it is a particularly astute sentiment. For instance, if you have engaged a prospect and they are buying into everything you’re selling without any convincing or much discussion, this should be a concern. All deals have an element of negotiation. If the prospect isn’t asking questions or if they don’t challenge you on any topics that should be important to them (such as pricing, support, customization, or whatever is applicable in your situation), you should see it as a red flag.

It’s a marathon, not a sprint

Larger goals are often more sustainable than a multitude of smaller ones. In the context of the larger goal, each smaller win becomes a building block – a step forward toward the bigger objective. When working as part of a team, this mindset helps to motivate the entire team as they know that each small step is contributing to the greater vision. Slow and steady wins the race.

Go with your gut

In sales, as in most aspects of life, your gut response is usually 100 percent accurate. Think about it: how many times have you looked back on a bad deal and remarked to yourself (or your team) that you “had a feeling” it would turn out the way it did. Trust your gut. If it seems like things are going south, you are probably right. If you find yourself in that position, don’t waste a lot of time rationalizing why things “could be” the way they are. If your intuition is telling you that you’ve got a shady deal on your hands, it’s always a more efficient use of your time and energy to wrap it up and move on.

In conclusion, we might say that the winner here is the one who can walk away. Sticking around when you know there is no chance of a positive outcome is just wishful thinking. Always have a clear exit strategy in your back pocket. This will help you to make the most of your time and encourage better sales results.