In a well-monitored sales cycle, pricing negotiation should rarely, if ever, be necessary. Proper management of the sales process ensures alignment with buyer expectations at each stage and a smooth progression through the decision-making phases.

If your exit criteria are well designed and generate a mutual interaction and validation of irrefutable buyer signals such as pain quantification, value assessment and access to power, you have the upper hand. So, price should not be an issue, and discounting should not be an option. Theoretically.

However, even the most advanced sales strategies can be disrupted when faced with savvy buyers and 11^th hour negotiations.

When Things Go Wrong:

Despite best efforts, things can go sideways. Here are the main pitfalls we observe with our clients:

1. One way Sequence of Events: steps have been completed but with weak mutual agreement to move forward. Reps are spinning wheels ahead and their closing plan is mere wishful thinking that serve their timeline.
2. Poor Understanding of the Purchase Process: trusting stakeholders, including power sponsors, who are willing to get things done but are overconfident on what it takes to gets deals across the line. Trust not challenged is a bet.
3. Over-Reliance on “Champions”: Champions are important and good assets in transactional business. Champion are simply not representative of how deals get done and decisions made in strategic sales. Laziness does not pay off.
4. The Most Damaging Question: “Where do we need to be?” This question does not only convey the message you are open to 11^th hour negotiation but also send the signal to savvy buyers that negotiation may not be your prominent skill.

Smart Buyers, Smart Tactics:

Smart buyers know how to play the game.

They don’t care about power sponsor’s WIIFM (What’s In It For Me) or their personal reasons to buy now. They have their own WIIFM: their commission or bonus may hinge on how much they can squeeze out of “your best and final offer”. You know, this is the one you made to a person who can’t buy.

They don’t care how well your offer aligns with corporate goals and strategy. Smart buyers are driven by something bigger that empowers them to negotiate and stall your deal: corporate purchasing culture and overarching savings targets.

You may have issued your “best and final” offer to the Economic buyer. You may believe you earned the right to close. But Smart buyers are on a mission.

• They shut down all information sources: you can no longer rely on your foxes and teachers. “The customer goes silent” on your “shaping up nicely” opportunity.
• They never let you know you are winning. It would be unethical and does not serve their purpose: leaving you in the dark so that you don’t have a leg to stand on.
• They assess competing offers till the bitter end and leverage your “final and best offer” as the starting point of the negotiation.

Negotiation fundamentals:

The solution is neither discounting or falling back to your freemium version if you are in SaaS:

• Accept that possibility that the deal may slip beyond your quarter-end or year-end. Stepping back from urgency will help you evaluate all components of the negotiation, uncover unexplored value-creation paths, and keep calm and stoic in the face of buyer threats and ultimatums.
• Forget about deadlines, including the one tied to your “final and best offer.” Focus on patience and silence. A lack of patience signals you are weak. Failing to tolerate silence -during or between interactions – is the quickest path to offering concessions. Decline any on-the-fly negotiation. Create the space to think, anticipate, and strategize.
• Prepare like a beast: no need to invest in scenario planning but investigate possible scenarios, tactics, and outcomes. Gather all the information you’re certain of, identify the points you need to clarify, and list the questions you must ask and the answers you need to obtain. Concepts like BATNA (Best Alternative to a Negotiated Agreement), reservation value (your walkaway line), and ZOPA (Zone of Possible Agreement) are the bare minimum. You need to define both yours and your customer’s.

Negotiation ready :

It is time to kick off your negotiation round. You have clearly defined what is negotiable and what is not—including price. Your life is not on the line – it’s just a game and you are ready to play.

• Be tools- and weapon-savvy: Emotions run high during negotiations. Your negotiation framework should help you stay grounded by making it simple to tick off addressed points, highlight concessions made and their related costs, and gauge the overall health of your negotiation. Your scoring system should make it easy to track how close you are to your walkaway line.
• Negotiate critical topics upfront: Address deal-breakers upfront. If you can’t reach agreement on critical points, there’s no wasting time on minor details. That said, you might choose to open with a smaller issue to warm up and build confidence—just ensure the main point comes next.
• Discover what you don’t know: Learn to read the buyer’s body language. Look for signs that you’ve struck a chord when discussing multiple issues. Does a specific topic trigger emotion? Does it make them talk more than usual when you ask for reciprocity? Use the structure Goals/Justification/Tradeoff to separate real negotiation from influence and pressure.

Final Thoughts:

Negotiation is inevitable in complex sales, but it doesn’t have to be a race to the bottom on price. Early value validation, preparation, anticipation and strategy are your best tools.

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