Negotiating a Note Purchase Through Email
We have a love-hate relationship with email. We love instantaneously sharing information with people and being able to send all sorts of documents easily without cost. But, we also get spammed or deluged with irrelevant “reply all” responses.
We have the same love-hate relationship with using email to negotiate deals. Sometimes we love how efficient email is. But, studies show, we lose more than 50% of our deals when we negotiate exclusively using email. Can you afford to lose your deal through email? Email negotiations are here to stay. We cannot go back in time, but we can improve our skills by applying five tips immediately.
1. Email Has Limited Value to the Negotiator. Recognize that email messages are easily misunderstood and can create a cascading effect of communication problems with note holders. More than 90% of human communication is non-verbal—meaning tone of voice and facial expressions. All of that non-verbal communication is missing in an email exchange. Therefore, USE THE PHONE or face-to-face meetings in addition to email to make sure that you close the deal.
2. Carefully Select Subject Lines. Subject lines are your first impression. They also help us keep track of long email strings. Use subject lines wisely. For example, instead of “Quote” use “Quote for $45,000 Tampa FL note” Not only does this make a great first impression because the reader can pick it out of the 100 emails she gets in one day, it conveys important information about the content in the email. Finally, don’t be afraid to change the subject lines to fit the body of your email. If you started with “3 options for your note” and have done your initial reviews, change the subject line to “Final Firm price for your consideration.”
3. Structure Your Email for Impact. Long, rambling emails will confuse the note holder. Time is at a premium these days. Clearly structure your emails to make it easy for the note holder to follow the back and forth negotiation process. For example, be sure to break topics up into bit sized pieces. Then talk about only one topic per paragraph. You may even want to number your paragraphs. In the example above, if you have “3 options for your note” number the paragraphs so the note holder can keep track of each option.
4. Learn to Engage the Note Holder in a Back-and-Forth Conversation. Negotiation is all about the conversation. It requires a lot of back-and-forth conversations to get to the final deal. Ask the note holder questions before dumping data or throwing out prices and options. People are notorious for sending back one sentence responses. That type of response could kill your deal. Add a question or two with your response. For example, if the note holder wants to know the price for a full purchase, tell her a pricing range and ask a question, such as “what were you thinking about?” Get a conversation started that could help you learn about what the note holder’s needs are.
5. Make Effective Tradeoffs. A tradeoff is a mutual exchange of value. Times are tough; margins can be tight and note holders want the most or they might go somewhere else. To balance all the competing demands with sound business judgment, make a tradeoff. Before you can make a tradeoff though, you have to know what you are willing to offer the note holder and what you need from the note holder in return to make it a mutual exchange. If you don’t know, take a minute to think about it. It could save you a lot of money in price concessions!
Email is here to stay as the preferred business communication tool. Learn to use email effectively by recognizing its limitations. People normally skim and scan email, so make it easy to skim your email and get the main talking points. Taking the small steps in this article will help you increase the odds of negotiating a great deal. Combine email with USING THE PHONE and you will be more successful at negotiating with note holders. Remember success demands action, keep on marketing, it’s going to work! TWITA! (That’s What I’m Talkin’ About!)
Jeff Armstrong of Armstrong Capital has been a note broker and investor specializing in the seller financed note industry since 1991. He can be reached by email at jeff@armstrongcapital.com. For more updated and current information on how he can help you with your note business, your note investments or to request a quote on a note you currently have visit www.armstrongcapital.com.