I was watching an old episode of Shark Tank recently, and it reminded me of a very valuable lesson. For those of you who aren't familiar with Shark Tank, it's a TV show where different entrepreneurs pitch their idea to four investors (Sharks). The entrepreneurs are usually asking for a specific amount of money in exchange for a certain percentage of an equity stake in the business. The sharks can either pass on the idea, or they can make an offer, and sometimes are willing to negotiate with the entrepreneur.
This one episode featured a guy who billed himself as the world's greatest salesman. He said he could sell anything to anybody. He had put together a program where he taught other salespeople how to close more deals, and promised he could help increase their closing ratios by 40%.
He gave an excellent pitch where he was asking for an investment of $90,000 in exchange for a 20% equity stake in the business.
The first Shark passed on the idea. Shark, Mark Cuban (owner of the Dallas Mavericks), asked the world's greets salesman a question. If he gave him $90,000 in exchange for a 20% stake in the company, what would he say? The salesman proceeded to ask the other Sharks if they were willing to offer more. None of the other Sharks were interested. Here's the interesting thing. Mark Cuban was offering him exactly what he had asked for, and yet the salesman wanted to keep talking.
Mark Cuban then explained that the salesman had just made the same biggest mistake most salesmen make. Once the prospect was willing to sign on the dotted line, he kept talking and lost the deal. Mark Cuban withdrew his offer, and the world's greatest salesman left with nothing.
The lesson to be learned is this. When the prospect is ready to seal the deal, Shut Up and Close The Deal.
Here's a clip of that episode.