advice How to Perform Outbound Sales with Mike Robertson - Part 4: Negotiating and Closing

In this fourth and final edition of our outbound sales series, we have possibly some of the best negotiation advice possible. Over the past three installments of "How to Perform Outbound Sales", we have teamed up with domain name broker and Director of Business Development at Fabulous.com, @Mike Robertson, to teach you how to conduct outbound sales.

We have covered topics that range from basic preparation to finding potential buyers and how to go about writing outbound emails. Here, we're going to take it a stage further and discuss negotiations and closing a sale.


Receiving an Offer

One of the best outcomes you can achieve from an outbound sales email is to receive an offer. Sometimes that offer may only be a few hundred dollars, but every so often an end user may truly appreciate the value of the name and submit an opening offer that's very close to your own expectations for the name. We asked Mike, should you ever accept an opening offer, or should you counter?

When doing outbound marketing, I always try to make the buyer make the first move in terms of an offer. If required, I will give them a price range, but rarely will I give them a hard number.

In doing so, it gives the buyer an expectation of what is required to get a deal done and it also puts you in the power position to negotiate. You can always come down in price, but you can’t go up.

In all my years of selling domains, I have never accepted a first offer. When setting a base price for a domain, I always advise clients to add some padding, which gives the flexibility to negotiate.

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Negotiating

If initial offers shouldn't be accepted, it stands to reason that we'll need some negotiating skills in order to increase the price that the buyer is willing to pay. The problem is that many investors may not be skilled at negotiating, so here, Mike has given his expert advice on how to be a better negotiator. Mike has closed many high-value sales including BTC.com for $1 million in 2014. Here's what Mike says:

I come from a Marketing background, I have a Bachelor in Business, majored in Marketing, so I have a good foundation from my years of studies. But I think what’s most important, is practice. Like anything, the more you do it, the better you will become. You will begin to realize what works and what doesn’t work. What language to use and what tell signs to look for from buyers. Here are some very basic principles that can help beginners.

Timing - understand when might be the best time to approach an end user. Sometimes companies are more willing to negotiate at the start of the year when new marketing budgets are typically set. On the other end of the spectrum, at years end, companies may have unused budgets. Another good time is when a company receives funding.

Be prepared – know who your buyer is; the company's past, their financials, their competitors and where they may rank comparatively, and any recent announcements the company has made about their future. Also be armed with information that can justify the asking price, for example, comparable sales and relevant stats/metrics.

Don't be too aggressive - if you are dealing with a large organization, it's important to understand that it may take time for the person you are negotiating with to get approval to make an offer/counteroffer. Be respectful and mindful when following up these prospective buyers.

Don't negotiate with yourself - if you have given the prospective buyer your target price and rather then them making a counter, they ask for a lower price, don't lower your price. Insist that they present you with a counteroffer.

Don't make concessions too soon - if you set your price at $100,000 and the prospective buyer offers $1,000, rather than lower your price, tell them that unfortunately, the offer is too low, thank them for their time and if their budget/offer increases in the future to reach out.

If you don’t ask, you won't receive - if you can't agree on a price, try and be creative with your negotiations. Maybe you can ask for one of their products or services? Or negotiate to have shares/stock in their company.

Be flexible and creative - a lot of the larger sales I have completed aren't straight forward cash sales. Often they are on a payment plan or a lease to own arrangement. Be prepared with alternative solutions when negotiating.

Be willing to walk away - Decide what your floor price is and be prepared to walk away if a deal in not achievable.

Most importantly, take emotion out of the negotiation, leave your ego at the door, and be professional and respectful.

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In negotiating the sale of one of your names, or a brokered name, the aim is the get the potential buyer to increase their offer up to your target price. Is there any way of telling whether a potential buyer may give you a higher offer? How would you know when their maximum offer is reached? Mike says:

As mentioned previously, 99.9% of the time, a buyer’s first offer is not going to be their best offer. So I would always counter offer any initial offer that is submitted.

One indication a buyer can go higher is if their counter offers coming back very quickly; the person you are dealing with may have a set budget and inching their way up.

Really it comes down to gut feel and intuition. When you are in the negotiations process (and have had experience) you typically can identify when a buyer has room to move or when they have reached their limit. Every negotiation and sale is going to be different, so be prepared to listen and address accordingly.

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Something I've always been interested in knowing is how often sales are closed via email versus the phone. Is it best to conduct negotiations via email, or is connecting on the phone a far quicker way to get things done?

I would say, about 97% of the sales I’ve completed have been conducted via email. I prefer to have everything in writing when dealing with large transactions like domain sales. Some negotiations can take weeks, months or longer. Having everything in email is important when documenting offers and counter-offers, especially those negotiations that are longer than a few days.

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Closing


Once you've reached a price that both parties are happy with, how do you initiate the closing process? Is it your job as the seller or broker to introduce possible payment methods and take the lead on that? Is escrow always the way to go? Do buyers need to be talked through each step of the process from initiating escrow through to transferring the name?

For all significant domain sales, I recommend a standard domain sales agreement. There are probably sample/template agreements floating about on blogs/forums. It can’t hurt to get an attorney to draft one up, once you have one, you can always modify it to fit future sales.

Also, I always require that any domain sales that I am involved in use a third party escrow service, whether it be an escrow company or an independent lawyer. When dealing with digital assets, it’s important to have that layer of protection, for all parties involved. More often than not, the buyer needs to be guided through the entire process (whereas, most sellers are familiar with what is required), everything from payment to fulfillment. As a broker, my job is to hand hold the buyer (and seller) through the entire transaction, ensure everything runs smoothly and the transaction is completed – the buyer has their domain and the seller has their funds.

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After closing a domain sale, does the interaction stop there, or should there be any follow up with the buyer of your domain name? Mike recommends the following:

At the closing of the transaction, I always reach out to the buyer with a thank you note. Also, if I haven’t already, I will send them a LinkedIn request.

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Thanks to Mike Robertson for his expert help throughout this series. You can view Part 1, Part 2 and Part 3 of this series for the complete overview of our outbound sales walkthrough.