When I first got promoted into Sales Leadership, I was immediately thrust into negotiating a multi-million-dollar deal with a multi-billion-dollar oil services company.
One of my Texas reps was working a $7.5M, 3-year deal with an oil services giant out of Houston. The buyer said the deal was ready but they needed to "discuss the commercial terms first."
My rep said he'd need to check with his manager. That manager was me.
Walking into their offices felt like walking into the procurement lion’s den. We’d been expecting one procurement person but instead were faced with five. They didn’t ease into their ask either:
"In order to get this deal done, we need a 35% discount.”
I'd seen reps handle this two ways, and both are wrong.
The first is defending price. You explain why the price is what it is, compare yourself to the competition, justify the number. Every vendor does this. The buyer already knows what you're doing.
The second is the ping-pong house of lies. You start posturing and playing games with each other. You either end up eroding trust or giving charity to their bottom line.
Neither approach is a negotiation. They're just two different ways to lose.
So maybe to buy time, maybe to sound smart, I grabbed a marker and asked:
"Do you mind if I walk you through the four things that drive our pricing model? I think it'll make this conversation a lot more productive."
They said yes. I wrote four things on the whiteboard.
Volume. Timing of Cash. Length of Commitment. Timing of the Deal.
These are the Four Levers, and every discount you give should be tied to one of them. If a buyer asks for a lower price, the answer isn't yes or no. It's "what are we trading?"
Each lever gives you something real to offer and something real to ask for in return.
Here's how I explained each lever and negotiated the deal in Houston.
Lever 1: Volume
Your price is based on how much volume you’re committing to buy.
Commit to more, pay less per unit. Most B2B pricing models are already built on this - you just have to draw their attention to it.
In Houston, the prospect had a second division that was interested in the product but hadn’t yet started a formal evaluation. They were planning to come back to it later.
Before using a lever to negotiate, explain it first:
"Your pricing is based on how much you're committing to purchase. The more you commit to, the better the unit price."
Once you explain it, offer the trade:
"There's value to us in a larger commitment. If you're willing to bring that second division into this deal now instead of running a separate evaluation later, that's something we'd pay you for. In this case, 5% off the unit price."
Lever 2: Timing of Cash
The faster they pay, the better the price.
Cash paid today is worth more than cash paid tomorrow.
Whole contract paid upfront > annual payments.
Annual payments > quarterly payments.
So I explained the lever:
"Our pricing assumes annual billing on NET30 payment terms. The faster you pay us, the more value that creates on our side — and that's value we'll pay you back for."
Then offer the trade:
"If you're willing to pay for all three years upfront, we'll give that value back to you in the form of a discount. The more years you're willing to pay for upfront, the better the price we can offer."
Lever 3: Length of Commitment
The longer term they commit to, the better the price. Knowing for certain you’ll have someone as a customer for 5 years is more valuable than only having a 1-year commitment.
Just like before, I started by explaining the lever:
"Our pricing is built on a three-year commitment. The longer you commit, the more we can pay you back for it."
Then I offered the trade:
"If you're willing to take this from three years to five, we'd pay you 5% per additional year. That's 10 points off in exchange for two more years of partnership."
Lever 4: Timing of the Deal
This is NOT a fake-expiring discount. "This offer expires at end of month" slows deals down because buyers smell the manipulation.
To actually use the “Timing of the Deal” lever, the agreed-upon signature date needs to be mutual where both sides commit to things in writing. Only then do you “pay them” for holding to it.
Explain the lever:
"You've indicated urgency on your side. We have urgency on ours. If we both commit to a close date and hold to it, that's worth something to us."
Then make the trade:
"If we both commit, in writing, to closing by September, we'll pay you 5% to hold to that date."
You're offering to pay them for the shared commitment. Buyers respond to that completely differently than offering a fake discount.
What Happened in Houston
They signed a three-year deal on time, helping us nail our forecast, and paid us for all of those three years upfront.
The levers were used for every additional request during the process, too.
And when they later brought us into additional divisions, they negotiated their own deal, again using the levers.
The Four Levers became a shared language for collaborative negotiations, not only for them, but for all of our clients. It’s exactly what I teach in the new 30MPC Negotiation Course.
The next time procurement throws a number at you, don't fold and don't defend. Grab a marker. Write the four levers on the whiteboard.
Then ask:
"When we provide a discount, what are we getting in return?"
Get the full 4 Levers Negotiating course with Todd Caponi →
