Nine Sales Priorities (in order) for Final Negotiations

With the enterprise sales cycles normally lasting six to nine months, gaining a verbal closure from your Buyer puts you into the last stage of the sales process which is typically called Final Negotiations. While the automated computations of your sales CRM may put the odds of closure at ninety to ninety-five percent (90% - 95%), your actual odds probably fall into one of two categories. The first is a near certainty (somewhere around 98% to 99%) because the need is great and your solution is the clear winner. In the second, you are merely the top choice, so the actual odds are much lower (more like 75% - 85%).

In either case, more than at any other stage of the sales process, Final Negotiations will require you to put your sales strengths, particularly your listening and empathy skills to task. To execute the Final Negotiations process most effectively, you must have a clear understanding of your priorities and their relative importance to one another. While each business situation is unique, here is a standard priority order.

(1) Do Not Lose the Sale

If you have reached this stage in the sales process, your solution has been selected. But the Buyer is still willing to walk away from the deal. Conversely, you are also willing to walk away from the deal as well if the Buyer suddenly insists on something unreasonable. Unless you are the clear winner, the Buyer likely has a reasonably viable second choice as a backup. Before the deal is officially inked, you may need to make some small concessions in assembling the final deal for your Buyer. Unless you have already worked out every detail at an earlier stage in the sales process, this should be considered normal. If you have managed the sales process well up until this point, you should be well prepared for various contingencies.

(2) Close the Sale as Quickly as Possible

This is an exercise in time management as well as negotiation. When Final Negotiations drag on, the odds of closure go down. But perhaps more importantly, they absorb a large amount of time that could be spent pursuing other opportunities. If the Buyer does not have an urgent deadline, delaying the sale is a strong negotiation tactic. Do not let your Buyer abuse this advantage. Instead, recognize and respect this bargaining advantage for what it is, as well as the fact that your Buyer can be genuinely pulled away from Final Negotiations to deal with more pressing issues. If your Buyer is driving an aggressive but reasonable bargain, a good strategy is to grant the Buyer’s request contingent upon both the agreement being inked and the purchase order being cut by an agreed-upon deadline. Buyers who use this strategy get the best deals, provided they understand their internal approval process and manage it well by knowing the vacation and travel schedules of their key signers in order to truly meet the agreed-upon deadline.

(3) The Terms Must Be Mutually Beneficial

During Final Negotiations, the Buyer may introduce new or previously secondary stakeholders into the negotiation process. These individuals will not understand the reasons behind the unique aspects of your legal contract, service level agreement, delivery schedule or even your financial terms. These individuals will initially want to alter or eliminate these unique aspects rather than seek to understand them. Additionally, these stakeholders may want to introduce unique aspects of their own without a clear explanation. To ensure the terms of the final agreement are mutually beneficial, they must be the basis of a favorable, long term relationship. You must take the time to understand your Buyer’s unique requirements, as well as ensure that all stakeholders in your Buyer’s organization understand and respect your unique requirements.

(4) Do Not Raise the Price

There is plenty of danger associated with raising the price during Final Negotiations. Once you have reached Final Negotiations, you do not want to revert back to an earlier stage in the sales process. Raising the price can mean revisiting earlier stages of the sales process. It can also put you in real competition with your Buyer’s backup solution. And even if you win the business, a price increase can erode trust and even be a source of resentment. That said, if the Buyer absolutely requires a lot of extras that are introduced during Final Negotiations that cannot be provided as part of a later up-sale, you may need to raise the price to cover the cost of these extras. If your price and deliverable negotiations earlier in the sales process were thorough, a price increase associated with extras during Final Negotiations will be easier to negotiate.

(5) Do Not Lower the Price

During Final Negotiations, most Buyers’ top two priorities are to eliminate risk and to get a good price. It is important to note that reasonable Buyers do not simply want to lower the price as far as they can beat you down. Instead, they want to be confident they are getting the best deal. Your priority number five can be at odds with their priority number two if you are not careful. If you or your Buyer is a poor negotiator, late stage price negotiations can unravel an otherwise promising relationship. Assuming your original price quote was competitive and not wishful thinking, you can navigate the price negotiation and even grant a price concession, provided you get something you value just as much or more in exchange. But often it is better to concede something else that actually means more to the client than a lower price like an extra day with the field engineer on site after training is officially over. Remember, eliminating risk is a much higher priority for your Buyer than lowering price. Never concede price until you are certain you have first minimized your Buyer’s sense of risk.

(6) Do Not Reduce the Contract Duration

This is an area of negotiation that can break down to a game of haggling. Sellers want a safe, steady income stream. Buyers want the flexibility to cut expenses in the future. In my experience, there are a handful of drivers that play a role in determining contract duration. The first is industry norms. Some contracts like Public Accounting are for several years. Others, like low-priced, self-service online subscriptions are annual (or even month-to-month for a price premium). The other is the Buyer’s business case. If the Buyer has a vulnerable piece of business directly associated with the purchase, loss of that business might be a justification to get out of the contract early. Similarly, you might simply put the particular Buyer’s renewal date earlier than usual in exchange for some reasonable concession. Empathy for the Buyer while simultaneously seeking a equity across your customer base should be the basis of your decision-making.

(7) Set the Stage for a Smooth Implementation

These last three points of negotiation create a double win for both you and your Buyers. With this aspect of the Final Negotiations, make sure both you and your Buyer are sensitive to one another’s respective calendars. Good planning will mean project phases cannot be scheduled when key participants will be vacationing or otherwise occupied. Take the time to identify threats to a smooth implementation and work out the details and contingency plans with your Buyer. Your Buyer will appreciate your time, and so will your internal implementation team.

(8) Set the Stage for Renewals and Up-Sales

This is about doing what your Buyer needs and ensuring what you provide will make your Buyer happy. It is an error to simply provide what your Buyer asks without understanding the “why” behind the asks. You may have something much more appropriate that your Buyer did not think to ask from you. This is also a time to discuss future possibilities in a non-hurried manner as mere options. "You can always get that later" sounds great to Buyers during Final Negotiations. Get the Buyer to envision adding what you have to offer down the line versus what a competitor has to offer.

(9) Maximize the Client’s Value as a Reference Account

This is a delicate dance during Final Negotiations but if your Buyer is looking to maximize the value of what they purchase, getting them to agree on paper to a defined level to which the Buyer will operate as a reference makes a great closure to the agreement. If the Buyer is far away from the buying enterprise’s public relations department, an eminent deal will justify action whereas a favor in the future will not. Operate wisely to gain this last benefit during Final Negotiations.

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Every stage of the sales process requires empathy and good listening skills. While Final Negotiations is the most complex part of the sales cycle, it does not need to be difficult. Like earlier stages of the sales cycle, planning and preparation are key. Given your Buyer has already selected you, all the work to make the outcome of Final Negotiations the best for both you and your Buyer is certainly worth the effort!