(This post was originally published on HubSpot’s blog on December 5, 2013)
I was recently asked to recount my favorite deal negotiation of my sales career. I can’t name who the client was, due to a privacy agreement, but I came to a few crystal clear conclusions after this deal was completed that could greatly aid those who find themselves at the negotiating table.
From price, to payment terms, to contract language, to acceptable use policy, and practically every other facet of the negotiation, this large brand was certainly a worthy competitor in all areas of dealmaking. Our original pact took nearly four months from the time we started talking scope and price, brought in legal, and put ink to paper.
In the end, though, I finished the deal with three key takeaways that’ll always help when working to close a deal and could prove quite useful for you in future deals as well.
1) Anticipate Long-Term Time Investments
When you’re working with larger businesses that have a lot to lose in terms of brand reputation, it’s always a marathon. You need to build-in the time needed to work these longer sales cycles into your quarterly forecasting. Then, listen and learn during the entire process. It will help when you’re negotiating the next big deal.
During our period of technical diligence, competitive posturing, credibility garnering, attention to detail, and professional approach to winning the business, it all paid off when we closed the original milestone deal. We found ourselves back in the saddle on an important deal upgrade, and the players involved were ready for round two.
2) Know Your Price Limits
When you’re talking big dollars, the amount of back-and-forth on all terms is a guarantee. But at the end of the day, it always comes down to price. Always.
We were on our 100th call in the history of the relationship (give or take) and I was with our COO, Gray Chynoweth. We had beat up price for weeks with the negotiation of future growth tiers.
They put the numbers and scopes in spreadsheets. We did the same. They compared us to the competition. We did the same. We gave our best offer. They came back and asked for more.
Mentally, I was at the end of the road.
In my mind the negotiation was done and we were just hammering out some final legal jargon. Our conversation went something like this, which is where my final major takeaway:
[Prospect] “Kyle, we wanted to have one last go at pricing.”
Silence for about five seconds as my brain searched for a hidden reserve of power to get back in the fight.
[Prospect] “So you’re still more expensive than your competition, and where we’d like to be. I’d like you to consider giving us one more price cut and make this a deal we’re both thrilled with.”
Silence again. I did sorta mutter under my breath, but they couldn’t hear.
I just didn’t know what to say and wanted to stay polite. It felt like 10 minutes, but was probably about 15-20 seconds of dead air. Absolute dead-of-winter silence. I motioned to Gray to keep the silence, and pointed at the speaker. We both waited with some weird hybrid of suspense and confidence. Out of pure desire to see what happened next, being quiet somehow became the play.
[Prospect] “So, I take it that’s your final price. I think we’re good then. We had to give it one more shot.”
3) Know When to Shut Up!
This silence on our end leads me to my last lesson in negotiating: Never underestimate the silent pause. Anyone who knows me understands that I’m a talker. I’m a kill-‘em-with-kindness, high-road-taking, transparent, relationship-oriented, straightforward salesman. And in the end, it paid off for me and the company to just shut up and let the silence do the talking.
Actually, there is one more key lesson to be learned — and perhaps one that you can use as you close your fiscal year and look ahead to how you become a sales kicker in 2014 and beyond.
Sometimes, it just simply pays off to sit back and let your technology, reputation, and relationship do the talking. Trust the value your service delivers for your customers. In the end, the best negotiations are when both sides believe they’ve won and have done right by their company.