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Ali Zandi

Daily Dose: Outbound Negotiation Tactics. Part 1.

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By Ali Zandi, Jun 9, 2015
  1. Ali

    Ali Half Beard, Half Machine. Starfire Holdings PRO VIP Trusted Blogger Trusted Contest Holder

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    Negotiation. This is the part that makes or breaks a deal. This is the part that makes you money! Major companies hire expert negotiators to step in during mergers and acquisitions, during a sale of the company, and even to train their sales staff. Being able to properly negotiate is the most important attribute you can have as a salesman! Do NOT take that lightly! Domain name investing is not just about the domain name, it's about sales techniques, negotiation tactics, customer service, and a heap of other extremely important aptitudes to develop!

    An expert negotiator will beat you to a pulp while making you feel like you're the one in control. They will make you feel like YOU won the negotiation. That being said, the first thing you need to do is take your ego and throw it out the door. It is not welcome at the negotiation table!

    *I use these strategies 95% of the time with end-users only. I throw out a few of these lines to other domain investors, but there really is no point as we both know what each other is up to anyway and most of us don't have the patience for it! Generally, an investor will tell you his bottom line regardless, so leave these insanely annoying tactics for end-user negotiations!*

    My # 1 rule of negotiating
    Know what you want! I cannot stress this enough!
    • Where do you want to end up?
    • What is the purpose of you selling this product or service?
    • Money? How much money?
    • Other things? Like what?
    • What will make you happiest at the end?
    Do you have a list of the things you'd like to walk away with from this negotiation?
    If not, make one. A thorough list of all the things you MUST have at the end.

    Now that you have the list of MUST have's, add a bunch of fluffy wants to it.
    Most of these fluffy's you will not walk away with. In fact, that's the point. Bare with me; you'll see why soon.


    The Outbound Negotiation

    More often than not, you will be doing outbound, so I will cover what happens in an outbound negotiation from my personal experience.

    You've sent the outbound email out, they've opened it a bunch of times, and a few days later they email you back with the line "How Much?" If you tell them without ever trying to pull a number out from their side first, you've risked leaving money on the table.

    *Before moving forward, I must say this one thing: NEVER BE AFRAID OF LOSING THE DEAL. If you are investing in the right type of domain names, you should never fear that!*

    These days, my reply to the "How Much?" question is almost always a variation of "To be fair to you, I will leave the table clean for your offer to be placed on. I am certain you've done your due diligence, and I am happy to hear your offer. Does that sound good?"

    Generally, their reply will be one of the following:
    1. "Sure, I am willing to offer [this ridiculously low price]"
    2. "You contacted us... what is the price?"
    3. They will use some line to beat down the value to them. In this case, you will use a method called Feel, Felt, Found. We'll get into that in a bit.
    Moving forward you need to remember what you wrote down before the negotiation. You wrote down your list of needs and fluffy wants, right? What was on your needs? Let's say you wanted to net $10,000 from this as your bottom line, and your fluffy wants were to keep a [email protected] email address for yourself and attain free advertising space on their homepage. All the while, knowing that you were unlikely to get anything except your bottom line price.

    Moving on, to reply to "Sure, I am willing to offer [this ridiculously low price]" you use a technique called the "Flinch." This is a technique talked about by Roger Dawson (an incredible negotiator) extensively. This is where you react with shock and surprise at the other sides offer.

    *A little rule to live by. NEVER EVER use confrontational negotiation. You are NOT to disturb the inner fighter in anyone. Once that person feels confrontation, their main objective will turn into proving you wrong. So keep it very, very light and open!*

    Now, it's easier in person, but with a few exclamation points and questions marks you can make your flinch quite clear in the response email. There are a few different ways to respond to a low offer:
    1. "Oh! I'm sorry, but we are not prepared to let this domain name go for that price! If you'd like, we can offer the option to rent the domain name for a year to see how it works out for you. At the end of the year, you can decide whether you'd like to acquire the domain name. Does that sound good?"
    2. "Wow! I'm sorry, but we are not prepared to give this domain name away. You will have to do better."
    3. "While I appreciate your offer, there is no way we could let this domain name go for that price. If you'd like, I can point you in the direction of more affordable options. Does that sound better?"
    Now, you should create your own set of responses. At least 10 of them and test them out to see which ones garner the best results for your style! Keep in mind, you want to either ask them a question at the end of the email or leave it open enough for them to respond. Sometimes, however, you'll just know that there will be no deal made and move on... but that is rare.

    Now to respond to "You contacted us.. what is the price?" is a tricky one. You NEVER want to tell them the exact price you had decided on earlier. Always ask for more. In fact, the less you know about the buyer, the more you should be asking for. Why? Because you just might get it. Have you ever made an offer on GoDaddy for $5,000 only to have the seller respond with a counter of $350,000? You think they are just crazy? Well, some of them are, but most of them know this simple rule. Always ask for more than you think you'll get. It gives you the ability to allow the other side to feel like they have something to win (by talking you down). So, to respond to "You contacted us.. what is the price?" you can:
    1. Ask this first "Let me first ask, If we can agree to a price, would there be anything holding us back from wrapping the deal up this week?"
      • Whatever their response is, as long as it's a confirmation that they will move forward at an agreed upon price, you've already begun to close the deal while leaving the price negotiation door open. Once they reply, you can move forward with your first proposal: "Great! I've spoken with my partners. Based on comparable sales, our team has valued this domain name at $45,000. We would also like to keep a [email protected] email along with the inclusion of advertising space on the homepage. Does that sound good?"
    2. Or, get straight to it: "I've spoken with my partners. Based on comparable sales, our team has valued this domain name at $45,000. We would also like to keep a [email protected] email along with the inclusion of advertising space on the homepage. Does that sound good?"
    The first option is the longer play. It gets them to offer up a commitment, whether they know it or not. It also tells you whether or not they are the final decision maker. If they respond with a variation of "Yes, if we can agree upon a price, we can move forward" then you know the rest is up to your negotiation skills.

    Alright, now if they use some line to beat down the value to them, you immediately use the Feel, Felt, Found tactic. More often than not, when you reach out, the buyer will pretend to be reluctant to purchase. They will do everything they can to beat down the value before making an offer. So, in response to their first attempt you use a tactic called "Feel, Felt, Found."

    Here is an example:

    Someone tried to tell me that the domain name was only valuable to their company and they were the only ones who would want it, so I should lower my pricing expectations.

    In response, I wrote:

    I understand that you may feel it is only valuable to your company. Many other companies have felt the exact same way about other domain names. However, based on the comparable sales, I have found that these domain names have value beyond the measure made by a single entity. They are a liquid asset and an investment. Domain names that cost thousands in the 1990’s sell for millions today. For you to acquire this domain name, you are making an investment along with acquiring a very important asset. Would you like me to direct you toward a comparable sales chart? I can also provide a list of companies that own generic, premium domain names. Would that help in your valuation of this domain name?

    This can open up a can of worms, and if the price has not been spoken about yet, it surely will be spoken about now. With either the response "I am willing to offer [this ridiculously low price]" or "Well, what's the price?" then you can refer back to the responses above for these scenarios.

    Now that you have opened up the pricing negotiations, it's time to really get down to it. The middle of the negotiation is the hump. You are now at the top of the hill and you have to set into motion a very gentle roll down to the closing side.

    Now that you have made your proposal, you will likely get flinched by the other side with some variation of "$45,000?! That's a lot of money for a domain name! You want an email address and free advertising too? I'm not sure we can move forward with this offer!" In which case, you can simply give them power by saying, "No problem. Since we are here and to be fair to both sides, what would the deal have looked like in order for you to move forward?"

    If they truly want the domain name, this is where they will make their initial offer. Let's say for instance they offer $3,500 with no email and no advertising. Now flinch, vise ("You will have to do better"), make your "counter offer," and "check with your partners" to see if you can make a deal happen.

    This is how it would look:

    "Yikes, I'm not certain we could move forward at that price! We are pretty far apart here; however, my partners are fairly reasonable. Can you provide a better offer for me to take to them?"

    That right there will generally get you a little more out of their side. Otherwise, they'll tell you that $3,500 is the best they can do. If they tell you that is their best, at least run through a financing option or a more affordable option before parting ways. However, if they open with a $3,500 counter, you are usually well on your way to your magic $10,000 profit number.

    You will likely play this back and forth for a while until you get closer to your $10,000 number. You will have to keep telling them to do better in different ways! Once you feel or see that they are maxed out, that's when you step in with, "Tell you what, I will try to create a shortcut for us here. Do I have your permission to run a $12,500 offer by my partners? Just to see what they will say?" Base the number you run by your partners on the highest offer they've given you so far. If they've come up to $7,500, run $12,500 by your partner. They will either tell you yes or "no, you do not have permission." If no, you could reply:
    1. "What if I could convince them to forget the advertising and come down to $10k? Does that work for you?"
    2. "What number do I have your permission to run by them? $11,000? $10,000?"
    By now, you see that all you are doing is inching your way up in price towards or past your $10k. If they tell you to go ahead and run it by your partners then all that is left is for you to close the deal with a simple closing line: "My partners have agreed! Congratulations! I will begin the Escrow with your current email. Does that sound good? By the way, you are the toughest negotiator I've ever spoken with!" Make sure you stroke their ego a bit during the close and make them feel like they won. They love it, and that way, they walk away much happier and more proud!

    This is part one of the negotiation dose. Remember, this is a very, very basic introduction to outbound negotiation. There are thousands of strategies, tactics, and chess-like moves to learn. Every negotiation will differ, but the fundamental strategies will remain the same. Usually the above information will likely get you through a simple domain name negotiation.

    You do, however, want to be extremely knowledgeable in all things sales and negotiations in order to become truly successful. A simple blog post from me will not make you a master negotiator. You must read every single book you can get your hands on in order to reach your peak. There is one must read book. It will change your life as it's done for me. "Secrets of Power Negotiating" - By Roger Dawson. It is the best negotiation book I have ever read and it will make my blog post seem like a grain of sand on an endless beach. If you do not read this book, you will find yourself getting beat up left and right at the negotiation table. You must ALWAYS be the better negotiator at the table. For that reason, read it now!

    Update on May 25, 2016: Negotiation Tactics Part 2 | Inbound - A Few Different Approaches
     
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  4. Ali

    About The Author — Ali Zandi

    Ali Zandi is located in Big Island, HI and has been a registered member of NamePros since Mar 31, 2015 with 378 followers and 1,415 posts. From those posts, 304 members have been thankful for them and 794 members have liked them.

    This is Ali Zandi's 4th blog post on NamePros. View all blog posts

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  5. Comments (45)

  6. Mads

    Mads Top Member VIP

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    Thanks a llott Ali!!! I guess this kinda article takes a lot of domainers like me to the next level! :)

    Cheers!!
     
  7. Ali

    Ali Half Beard, Half Machine. Starfire Holdings PRO VIP Trusted Blogger Trusted Contest Holder

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    Thanks for taking the time to read it! I'm glad you enjoyed! :)
     
  8. bltechno

    bltechno Established Member

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    Thanks Ali for your help towards the community!

    Just a question / thought, do you also own any thread where one can post his domain & request your expert opinion, such as where to sale, what could be ideal value, to hold OR to auction like that ?

    NP has a appraisal section I know, but expert like you don't participate there that often.
     
  9. Acroplex

    Acroplex Top Member DomainGang.com PRO VIP ★★★★★★★★★★

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    Nice write-up with more details than most articles offer on the subject. Remember: if you don't ask, you don't get.
     
  10. vickyhunter

    vickyhunter Domain Spider Gold Account

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    Excellent article, Ali. Was hoping, it would never end. :D and, I will read that book you have recommended!
     
  11. Ali

    Ali Half Beard, Half Machine. Starfire Holdings PRO VIP Trusted Blogger Trusted Contest Holder

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    Thanks! You know, if there were more hours in the day, I would be able to offer more. :)

    Thanks man!

    Thank you! That book is priceless!
     
  12. Genius327

    Genius327 Shahil.com VIP

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  13. Ali

    Ali Half Beard, Half Machine. Starfire Holdings PRO VIP Trusted Blogger Trusted Contest Holder

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    The VISE! So effective!
     
  14. mitok

    mitok Top Member VIP ★★★★★★★★★★

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    Ali, please don't get me wrong as I really appreciate your effort and your contribution (not just in this post). But I think these are not very useful info (generally).

    Why? First of all, this might works only for premium domains.

    You cant ask them to make first offer if you contacted them out of the blue with a domain that they don't desperately need. On their "how much?" reply anything except what they asked for (a price) and you will most likely never get their respond. I am talking about reg fee domains which someone tries to sell for $xxx. I think this is the case in most situations. By "reg fee domains" I don't think on crappy domains. By "reg fee domains" I think on domains which are solid and you found them available.

    Many people actually don't like negotiations, and they especially don't like to negotiate for days about something they would never think of if you wasn't contacted them.

    I sold hundreds of "reg fee" domains for $xxx to prospective end users, but they never actually became end users. Many of them was just buyers, and not end users. Many of them do nothing with a domain they purchased. Some domains which I sold for $xxxx expired!
    I always search for quality potential end users for my domain so they could easily become ones, but they didn't, although they bought a domain from me. If I answered on their "how much?" with a question instead of exact price, I am sure I would not make at least 50% of those sales. Well, maybe I would get more money for some domains, but I believe I am experienced enough to know when I can ask $5000 or $10000, and when I cant ask more than $500.

    My way of work is that I mostly don't state a price in initial contact, but on their "how much? I respond with 20-30% higher price than I would be happy with. That way I have the opportunity to receive their offer, or if in second contact I state my price I still have space to lower them and make them feel they won. But I don't like mentioned this in public and will probably delete this post in a few days ;) Like on court, everything you write online could be used against you :) So please don't quote my post, but feel free to mention my nickname if you plan to reply.

    When I am selling some really good domain then I use very similar tactic as you, but with $xxx domains I respond with a price if they ask that.

    There are other things too. Potential buyers have different personalities. You are dealing with humans, not machines. If you have success today with "hidden price" that don't means you will have it tomorrow as you will be dealing with another person which might be pissed off with the fact you cant answer directly on a simple question as "how much?'".

    Moreover, some sellers need regular sales and cash flow so they cant risk to loose a sale because of $100-$200. This stands for $xxx sales.

    Your tactic is ideal for premium domains AND for cases where you were contacted by potential end user. It might works very good when you are the one who contacted potential end user with a premium domain for sale. But I think it is very bad tactic in case you are selling $xxx domain. Thats why I wrote this tactic is generally not good.

    Again, I really appreciate your post, but just wanted to share my opinion ;)
     
  15. Christine Pettway

    Christine Pettway New Member

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  16. ramkumaritrvs

    ramkumaritrvs RapidNames.com PRO VIP

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    Another great post. Hats off to you @Ali Zandi
     
  17. Ali

    Ali Half Beard, Half Machine. Starfire Holdings PRO VIP Trusted Blogger Trusted Contest Holder

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    @mitok

    Thank you! And no offense taken :)

    Everyone has a method that works best for them! There are thousands of different methods. Mine are "just a grain of sand on and endless beach." There is so much to learn, and I highly suggest reading a ton of negotiation books, sales books (no matter how good of a salesman someone is, they can always get better) and from that knowledge... creating ones own methodology.

    I would try a thousand things only to find a few of them that work best.
    Then it's a lifetime of fine tuning :)
     
  18. mitok

    mitok Top Member VIP ★★★★★★★★★★

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    I am glad, as my intention was not to offense you of course. Your post is great, but I just wanted to say that mentioned tactic is ideal in some cases only.

    Each part of domaining could have its own chapter with at least 100 pages per chapter. Thats why experience is very important. But showing different methods always helps and each domainer could choose the one word himself :)
     
  19. BrandKart

    BrandKart Pick the right name with us ! VIP

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    @mitok your right for mid range domains its better to mention the price when the respond.

    mitok can u show us some sample emails you used to pitch and how you responded when they asked for pirce ...


    thanks
     
  20. BrandKart

    BrandKart Pick the right name with us ! VIP

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    For mid range domains i have mentioned the price in the 1st email itself and have made me close the deal much faster
     
  21. mitok

    mitok Top Member VIP ★★★★★★★★★★

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    I use slightly modified this template: https://www.namepros.com/threads/how-to-find-potential-end-users.68798/page-14#post-2987571

    My second email after their respond depends on many things. Each one is individual, but in most cases I state a price then, or at least some price range.

    Sometimes my first email is different if I see something about potential buyer/end user what catch my eye :)
    Just one fresh example, few hours old. I was searching for prospective end user for one of my domains. I noticed one of them owns dozens of KeywordKeyword.ext domains (where second keyword is always the same). I own Keyword.ext (that is the second (main) keyword from their domains). I will mention they could use my domain instead of many other similar domains they currently use and manage all from one place as with my domain they could make subdomain1.keyword.ext, subdomain2.keyword.ext, subdomain3.keyword.ext etc.
    This is just one example. If I notice they pay thousands for AdWords I will mention that my domain is better match so they AdWords Ad Quality Score will be higher and they will save a lot because they would be able to have lower bid and achieve same AdWords position.

    I mostly send modified template which I linked in this post, but in some case I write completely different initial message. Those cases are when I think they are perfect potential end user.
     
  22. osamson

    osamson Established Member

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    Nice one Ali! Yes that method really works. I have used something similar before with good success.
     
  23. bltechno

    bltechno Established Member

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    Ofcourse! I understand that, that's fair.

    Just incase you have 2 minutes, I would be happy to learn, what a single syllable, pronounable LLLL.com (no qwyxz or lower grade chars) domain should one buy for resale ? What is the perfect platform to liquidate them fast ?

    I thank you again for sharing knowledge.
     
  24. BrandKart

    BrandKart Pick the right name with us ! VIP

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    Ali thanks for the great article ..can you show us the write up sample for that "how much ?" reply from end user
     
  25. BrandKart

    BrandKart Pick the right name with us ! VIP

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    and what is the end user reply for How much is 50 % to 70 % of your mind set price how would you repy
     
  26. deflee79

    deflee79 Cough it up bro. VIP

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    Thanks for the recommendation of Roger Dawson. I downloaded the book today.
     
  27. NameAgency

    NameAgency Top Member PRO Gold Account VIP

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    Please, from where did you downloaded?
     
  28. BrandKart

    BrandKart Pick the right name with us ! VIP

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    Can you please tell me how to respond to the enduser when he agrees the for the price... how to send ur final email of payment instruction ...as i feel i am missing out here
     
  29. cmdomains

    cmdomains Established Member

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    I have received an email offer (no numbers thrown yet) that claims to be connected with other domain investors. The sender is from one country and his connection is somewhere else. What's interesting is I haven't put up the domain he wishes to buy on any website (from what I remember anyway) . What would normally one do if they do get a seemingly random email offer?
     
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