Create the Formal Agreement

Learning Objectives

After completing this unit, you’ll be able to:

Describe the steps to create a formal agreement.
Explain the issues that may occur when finalizing a formal agreement.

Create a Formal Agreement

You’ve used the skills you obtained from Relationship Selling and have gained commitment to the sale. Now take the time to create a formal agreement with your customer. This is the first step taken following completion of the sale. It’s important to remember Dale Carnegie Principle: “Make the other person happy about doing the thing you suggest.”

Why a formal agreement instead of a contract? A contract means very different things around the world. Whereas an agreement is universal. And you make it formal because you want it to be on paper both parties can sign. The contract is more about the logistics, the terms and specifics, timing, price, who is involved—all things that should have already been covered in the proposal.

Confer with all your resources at the same time as you’re putting the formal agreement together, as things may have changed since the proposal was initially accepted. Confirm the profitability of your client project with your company for the same reason you’re confirming the resources. If anything has changed, you want to make sure this is still profitable. After you have completed the negotiations with the customer, you should ensure the formal agreement aligns with your organization’s requirements and policies. Go back to your sales manager and make sure everything still aligns.

Let’s look at it from a client’s point of view as well. You are just talking about terms and conditions right now. You have already talked about what should be in the formal agreement. Think about specific terms and conditions you want to make sure are in the formal agreement, such as payment, solution details, a timeline for implementation, and a clear, specific scope of work.

Sign Off on the Formal Agreement

Let’s look at what this process looks like. You finish the document and are now in the sign-off stage. What is really happening here?

You finalize the terms and conditions based on client feedback and have confirmed with your team that your organization can do everything outlined in the agreement. You confirm which signatures are required. You may need to extend your timeline if there are multiple signatures needed—you don’t want to miss any key decision-makers.

What happens if it’s not happening fast enough? You come to what Dale Carnegie calls a stalemate. Stalemates are painful. There are a lot of things at stake so you must be comfortable breaking a stalemate. Imagine you are in this context described below.

You know whose signatures need to be obtained. You ask your decision-maker, and they say they’re working on it. They actually say, Don’t call me, I’ll call you. What do you do? What are your best practices for breaking stalemates? How do you get the deal done?

Dale Carnegie breaks it down simply, with a series of Inappropriate and appropriate behaviors.

Inappropriate

Manipulative: Waiting in the lobby and refusing to leave until it is signed.
Threatening: Saying things like pricing is going to go away as a tactic to close the deal.

Appropriate

Proactive: Predetermine with your decision-maker(s) the next time you’re going to connect to check status.
Strategic: Offer an incentive to proceed, like modifying the proposal, a term or condition, to make it more in their favor.

It’s good to be creative, just do it appropriately.