It’s an all-too-common scenario: your team enters into the concession part of a negotiation with a list of promises that don’t match reality. While this might mean negotiations go smoothly in the short term, when it comes time to deliver, the client is less than satisfied with the follow-through.
This is overpromising and underdelivering — and it’s a surefire way to harm a long-term business relationship.
Negotiators can also fall into the contrasting trap. They underpromise and over-deliver, offering additional services and value without an equitable give-and-take from the other party.
At RED BEAR, we teach a methodology rooted in the foundational principles and behaviors that drive successful negotiations.
That means negotiators don’t enter discussions with the simple goal of pleasing the other party but rather leverage effective communication tools to build long-term relationships that offer value repeatedly.
Let’s explore the concept of overpromising and underdelivering in more detail and uncover why the right approach to negotiation can guide your team toward the most optimal outcome.
Overpromising and underdelivering is a risky business strategy that occurs when sales and procurement teams set unrealistic expectations for themselves, their company, and their clients.
It can manifest in various ways throughout negotiations:
The results can be quite damaging. Not only can it spell disaster for long-term client relationships, but it can also lead to lost business opportunities. In the worst-case scenarios, it can mean substantial financial losses and harm to a company’s reputation.
Businesses thrive on long-term relationships.
Take recommendations: 89% of consumers trust recommendations over all forms of advertising. When you overpromise and underdeliver, you risk damaging the possibility of recommendations and even the client relationship itself. This is true for even the strongest and most well-built relationships.
Sales and procurement teams overpromise in several common ways:
We touched on some of the impacts of this approach to negotiation, but let’s explore the consequences a bit more in-depth. Here are the results of overpromising and underdelivering:
Trust is a huge component of long-term business success. Buyers who trust a company are almost twice as likely to recommend it (85%) than those who don't (48%).
There is a cost to overpromising and underdelivering. At RED BEAR, we’ve seen it happen at even the most successful Fortune 1000 companies.
“There is a cost to overpromising and underdelivering”
One of our clients, a chemicals company, needed help with eroding profit margins due to overpromising and price-focused negotiations. By implementing RED BEAR’s principles and focusing on value-based selling, they achieved a remarkable $20 million increase in profitability within a year.
This case underscores the importance of mastering the three dimensions of negotiation: competitive, collaborative, and creative.
When the competitive and collaborative dimensions are in balance, negotiators can unlock the power of creative problem-solving, guiding them through the complexities of negotiations and helping them avoid the pitfalls of overpromising.
It also emphasizes RED BEAR’s Negotiation Principles and Behaviors. Effectively managing expectations can often lead to exceeding them. However, to do it right, negotiators must manage information effectively and concede according to plan.
Let’s explore the eight most common signs that your team is approaching dangerous territory.
Vague language like “soon,” “competitive pricing,” or “best efforts” can misalign exceptions and lead to disappointment. If your team leans on this type of language, you could be setting deals up for future failure.
Instead, use clarifying questions to understand the other party’s needs. After you have an idea of what they truly need, your team should summarize those needs into your own words to confirm alignment. That’s the Test and Summarize Negotiation Behavior in action.
Avoid ambiguous language, undefined timelines, or general promises. If vague language is in use, proactively clarify commitments with specifics.
Verbal agreements can easily become misunderstood. In complex B2B deals with multiple stakeholders, misunderstandings lead to disputes and an erosion of trust.
A written record is key. Here is where the right negotiation planning process comes into focus. Your team should come prepared to document all agreements in writing, including meeting minutes, emails, or contracts, to create a clear record of expectations.
Avoid relying only on verbal agreements and memory. Try to create detailed documentation as soon as possible.
The pressure to close a deal can be massive. Skilled negotiators don’t shy away from the inherent tension of negotiation but rather embrace it, creating healthy tension.
When they aren’t comfortable in this environment, they can quickly become overly optimistic about timelines, resources, and features. Knowing the full range and strength of your power can help your team understand your capabilities, resources, and bottlenecks before negotiations take place.
Professional negotiators avoid making promises based on best-case scenarios or without consulting relevant teams. If an overcommitment is already promised, reassess and communicate revised, realistic expectations to the client as soon as possible.
Inconsistent communication across multiple channels and stakeholders can lead to confusion, distrust, and missed opportunities. Here, the Negotiation Principle of Managing Information Skillfully becomes valuable.
Establishing clear communication protocols within your team and with your clients is essential. When you can, assign a single point of contact, schedule regular updates, and ensure everyone is aligned on project status. But it’s not just about what is said, but also what isn't.
Information is currency in negotiation. Manage it wisely. The right details, shared at the right moment, can unlock immense value.
“Information is currency in negotiation. Manage it wisely.”
Avoid ad hoc communication, missed deadlines, and information silos. To course correct this mistake, hold a team meeting to realign and establish a communication plan. Communicate openly with the client about any changes and next steps.
Past success does not guarantee future results. Each deal is unique, and market conditions, clients' needs, and internal capabilities can change in a matter of moments.
Preparation is the key to avoiding this pitfall. Thoroughly analyze the specific context of each negotiation, including the client’s needs, ahead of time. Always avoid assumptions rooted only in previous solutions or strategies. Just because they worked once doesn't mean they will work every time.
If you feel your team’s approach to negotiation is becoming too formulaic, based only on past successes, try to adapt your approach. Match your strategy to the specific circumstances of each deal. You should leverage past lessons learned but don’t build your whole strategy on them.
Difficult conversations are unavoidable. When negotiators shy away from those challenging discussions, they can overpromise — leading to damaged relationships.
Skilled negotiators thrive in healthy tension. Disagreements are a natural part of negotiations. Your team should be comfortable addressing concerns, managing expectations, and finding creative solutions that satisfy both parties' needs.
Glossing over problems or making promises you can’t keep should be avoided at all costs. Instead, initiate open and honest communication with the client to address challenges and explore creative solutions.
The business world is as interconnected as ever. As a result, cultural misunderstandings can easily derail negotiations.
Businesses that often deal with international clients should invest in cultural awareness training, like RED BEAR’s Cross-Cultural Negotiation Training. This education will help your team tailor communication and negotiation style in a client’s cultural context and present your position advantageously.
Never assume that your communication style and expectations are universal. Your team should make honest attempts to understand cultural differences and apologize when mistakes occur.
Planning is at the heart of successful negotiations. When your team fails to plan ahead of time, they rush into negotiations, leading to missed opportunities, concessions that harm your bottom line, and, of course, unrealistic promises.
Skilled negotiators never enter a room without a plan. Always invest time into thorough research and analysis beforehand. Define your objectives, understand your client’s needs, identify potential challenges, and develop a clear strategy.
This is especially important for concessions in negotiations. Knowing when and what to ask for and offer is the key to building healthy tensions and win-win outcomes. Avoid “winging it” at all costs. If you're in the middle of a negotiation and feel unprepared, don't be afraid to call for a break to regroup and develop a plan.
In the end, effective communication is the secret weapon against overpromising and underdelivering in negotiations. With the right negotiation tools and knowledge, your team will be able to not only set realistic goals, but ensure that everyone, from internal stakeholders to the other party, know exactly what to expect.
While it can seem advantageous to underpromise and overdeliver, this can lead to an imbalance of value. Your team should shoot to exceed stakeholder expectations, but not give up too much without receiving value in return.
That’s why the right negotiation training is so important.
Here at RED BEAR, we teach a tested methodology that transforms individuals into world-class negotiators. That’s exactly why over 45% of the Fortune 500 utilize our techniques.
For every dollar invested in our workshops, our clients receive, on average, $54 back. That’s the value of RED BEAR training.
For more information on how we can help your team understand how to navigate negotiations and not fall into the trap of overpromising, reach out today.