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FoxBound Blog

7 Ways to Discount Less and Control Sales Negotiation

FoxBound Blog

November 1st, 2019

Sales Negotiation: Stop Giving Your Margin & Deals Away

This might sound familiar..

You’ve been working with a prospective customer for months. There’s an established  business case and strong ROI. You’ve even demonstrated your solution’s ability to achieve positive business impacts soon after delivery and you’ve successfully tied your offering’s strengths to weaknesses and pain. 

The “technical sale” is in hand and you have influencers advocating on your behalf. Your deal is sitting pretty in your CRM as a qualified opportunity with a low margin because you’ve been made to believe, “budget isn’t a problem,” and that decision makers are ready to authorize a purchase.

Navigating commercials seems like it should be a breeze.

Instead, you walk into a sales negotiation storm..

Some other budget-holder or economic buyer, detached from the situation up until now, emerges.

This could be a department head, a c-level executive, or a procurement officer.

Regardless of the nuance, this person is here a part of your life for one reason..

The money!

Get your defense ready, because you’ll have all kinds of plays thrown at you. 


  • “We’ve had to reallocate budget and we won’t be able to authorize funds for this.”
  • “We’re taking a second look at competitor X and Y.”
  • “This is going to have to wait until next year.”

Nails on a chalkboard. Now, you’re torn between making a deal happen sooner & for less, or risk trying to get more margin later on..

This can leave you in an uncomfortable situation.  

Stand your ground in Sales Negotiation

When I say stand your ground, I’m not saying let a deal fall apart over a few points of margin.

If you actually have a qualified deal (and qualifying is a bit outside the scope of this post), then the odds someone is going to kill a sales cycle altogether is pretty low. If you’ve built a reasonably strong case and they’re in the buying window, it’s relatively rare to see an organization waste their own time, energy, and resources just to win a game of chicken in a sales negotiation. 

And yes, selling with value protects you from price attacks and feature wars. But more likely than not, you’ll come across a time where you have to figure out how to work a deal with an incentive to make it happen. 

When that time comes, don’t give your leverage away for nothing. There’s no reason for giving a discount for no reason! You’ll also have a far easier time selling your case internally to leadership and finance if you’ve traded value for value.

And it should go without saying. But please, make sure the person you’re negotiating with can actually make the deal happen with your team’s approval..

1) Shortened Payment Terms

If I know anything about your finance team, it’s that they like cash. Now, we’re not going to get into budget and cash flow here. However, if you can get a customer to commit to Net15 or Net30 instead of Net45 or Net60, you may hear your team’s tune change on a discount.


2) Speed of Signature

This is a classic one, but here’s where you may be going wrong.. Instead of just sending one order form or quote marked for a signature & in-quarter expiration date, send two. Additionally, send another one with the increase price once the deadline passes. Your customer needs to know you won’t give a discount and roll over if they don’t get around to it in time.

Many reps will use the, “If I can work with my team internally to reduce the subscription cost to $XX, then will you sign by YY date?” That’s fine, but be sure to use this as time to inquire about the buying process and all that’s involved. That might sound like, “So that I can intelligently express this situation to my finance team, can you help me understand the series of approvals needed, the budget this is coming from, and who all is involved in this purchase?” Negotiating internally, 1:1’s, and forecast reviews are all improved by this knowledge. 

3) Commit to Case Study

Assuming you have created a solid business case already this is a way to reuse and repurpose your work. Try a track that sounds like, “Let’s say this plays out and we can secure this financial concession, come to finalized terms on a partnership, and we deliver our solution as demonstrated – will you agree to working with our product marketing team to create a case study within 6-12 months?”

 

They’ll potentially have to engage legal and they’ll definitely have to commit to giving time. If they value your solution now, they’ll psychologically value it even more after investing more resources. 


Even if it’s a vague, “Fortune 500 Healthcare Company Achieves {{Outcome}},” it’s still better than nothing. 

4) Serve as Customer Testimonial

If you can’t get a full blown case study, have your prospect commit to sharing 1-5 separate reviews from different team members on review sites. They can likely even work with your marketing team to write a blog – which is free – that can attract customers later. 


Also, there will come a day when another prospect will ask for a customer reference call. When that time comes, you’ll have a favor to redeem instead of scrambling to find one. And don’t forget the factor of social proof that can play to your advantage later on in future deals when you have a written testimonial from one of your reference-able customers. 

5) Referrals to Accelerate Cross-Selling or New Business

Let’s say you’re selling to one business unit and you have to get a discount approved. You better be sure you’re not stuck on one. Nothing’s worse than landing but not expanding.

To combat this, ask for a manager or executive to walk you through an org chart so you can get the inside scoop on the way the landscape works. For smaller companies or deals where you’re capturing the whole account, push for commitments to introduce you to at least three other qualified referrals in your network. Take pressure off your prospecting and be one of the reps that actually capitalizes on referrals. 

To add to this, it’s a bit easier to ask this as a rep when in sales negotiation mode and not customer / provider mode.

6) Multiyear Contract, Paid Upfront

If you’re on a sales team where these are incentivized, push hard for this. Ask your prospect if it’s a budget issue or a cash issue. If it’s the former, then you may be able to lock a longer term deal in with upfront payment. This gives you extra cash on the books (hopefully a bigger check too) and they lock in budget for an extended amount of time. It’s a win-win when cash isn’t the main concern. 

This is usually attractive to finance teams because this gives more cash on the books, solidifies financial projections, and increases customer retention.

7) Delayed Subscription Start Date (or longer payment terms)

This more applies to SaaS deals that hit operating expenditures (OpEx) instead of capital expenditures (CapEx). Long story short, in the world of software, the day a subscription actually starts is when it impacts the budget. If there’s friction with the finances, ask when budget actually opens up and would be released. So let’s say budget isn’t open until February, but you need a signature at end of January based on your fiscal year. Instead of waiting to sign the deal in Feb, sign it in January but have the start date be Feb 1. You book the deal, their budget is accounted for properly, and everyone’s happy without you giving your deal away.

In a non-SaaS deal where this doesn’t apply, you may be able to scale back on discounts with extended payment terms. Your finance team will forego cash sooner for a bigger chunk later. It’s a matter of your organization’s position.

There’s plenty more tricks in the playbook, here’s just a few to get started.

Go get em!

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