Strategies for Negotiating Large Contracts
Don’t want to make the first move, but want to close that large deal you've worked on tirelessly? Negotiation strategies for large contracts is a must-have skill in today’s tech sales marketplace. We asked five top sales leaders from Chicago and Silicon Valley about their strategies when negotiating large contracts. Here are their answers:
George Eliopoulos, Director of Sales at Braintree: Primarily, let them talk first. You may not understand the real objections on the other side until you hear them out. So many salespeople think that talking first is the way to "sell," but negotiation is a chess game that requires patience. Second, remember that they want your product, but at the other guy's terms and prices. Going in with the understanding that your value is, indeed, greater lets you focus the conversation on the ideal future state that you are going to put your prospect in. If you don't believe it, neither will they. At the end of the day, we all pay more for quality (phones, shoes, coats, homes, cars, etc.).
Todd Caponi, Author of The Transparency Sale: Embrace transparency. You've spent an entire sales cycle building trust; it doesn't need to go away once they've made the decision to go with you. Understand your levers, share them at the beginning of the sales cycle when you first talk pricing and make sure they're reflected in your proposal. Then when negotiation time comes, the levers allow you to pay for returned value in the form of a discount - more volume, faster payments, longer commitments and/or predictable deals.
Adam Johnson, SVP of Sales at ActiveCampaign: The key is to try to make negotiation more collaborative than adversarial. I recommend being honest with your client about the things that are most important to you and, hopefully, get them to be open with you about the areas that are most important to them. Where I've seen negotiations really break down is when both sides communicate each item with equal priority; this creates tension and pressure that, in most cases, can be avoided if you're up front about the key areas of the deal.
Marty Enns, VP of Commercial Sales at Clari: First, build business value that solves organization pain. Second, learn the customer buying process, what levers are important and their motivation to buy. Third, stay calm and remember it’s a negotiation. It will get intense, and, depending on the customer, they may negotiate to the very last minute!
Chris Beall, CEO at ConnectAndSell: Learn to recognize what your true situation is in the deal: are you in flow (problem solving with your prospect's responsible party); stuck (don't know what to do or offer next); or waiting (for critical information or the other party to make a move)? Properly recognized, each situation tells you what to do: keep working together to craft the deal; switch from problem solving to learning mode; or exercise patience. Knowing your situation and adjusting your operating mode accordingly keeps you calm, confident and in control, which together maximize your chances of striking a fair deal in a timely manner.