Seller’s remorse is a form of regret experienced by a business owner or salesperson who gave the customer a really rich deal. A deal so good that it might hurt the seller financially or emotionally.
There are several reasons that can lead a seller to give away too much during customer negotiation.
For example, the seller might desperately need the money (as is the case for many new entrepreneurs). Or perhaps the seller wanted to steal the deal away from a competitor. Usually, however, the seller simply gets caught up in the rush to close a deal and, in the process, ends up giving away too much value. I've been there.
Check for these conditions to see if you are suffering from seller’s remorse.
The selling price is too low
As a buyer, have you ever regretted paying too much? Perhaps you felt the value received didn’t justify the price you paid for a particular service or product (I feel this way whenever I eat at the Keg).
Selling for too little is the same kind of reaction: a lingering sense that you’re getting ripped off.
Selling for too little money can happen to the best of entrepreneurs.
You can understand how it happens becuase it's so easy to get caught up in the heat of customer negotiations and agree to take less money than we should have.
Learn from this mistake by checking your prices and how you are communicating the benefits of buying from you. Both may need to be improved.
Payment terms are unfavourable to the seller
To get that deal closed, it’s natural for an eager seller to agree to very generous payment terms. For example, one time I agreed to accept payment in 90 days instead of the usual 30 days. Talk about a starving entrepreneur!
While remaining flexible on deal terms is a good way to win customers, it can be damaging to your business’ cash flow when the money doesn’t arrive for a long time.
Revisit your payment terms to see if they need tightening up. While invoicing is common for B2B purchases, some suppliers ask for payment up front—and they often get it. Be true to your cash flow needs and request payment accordingly.
You’ve got a bad feeling about a new customer
Sometimes your gut tells you NOT to do business with a particular customer, but you sign them up anyway.
This is a tough form of seller’s remorse because it’s so personal: you simply don’t feel good about the new relationship. In your mind there’s something “off” about the individual or the company. The customer may have said something offensive or off-putting during your sales interaction that you ignored at the time. Or, upon reflection, you just sense that this customer will be high-maintenance and cause stress.
Years ago, I immediately regretted signing a $90,000 contract with a new customer because they seemed a bit shady and insincere. They constantly rescheduled meetings and made strange requests. But it was when the first cheque payment arrived, late, with a note asking us to “hold off cashing this until we call you” that we immediately resigned the account.
Trust your instincts. Sometimes the best deal is the one you turn down.
Overcoming seller’s remorse
If the deal is done and the contract is signed there may be very little you can do about it. And being a bad sport about the situation may damage your well-earned good reputation.
Just remember that contracts don’t last forever and you may simply need to ride it out.
Once your current obligations are fulfilled, you can change the terms of the next contract—or decide never to work with that customer again. Ever.