Do you feel that?
Your personality changes right after the customer says “yes,” and it’s time to start negotiating.
You’ve established a trusting relationship with the customer.
You’ve guided them through to a purchase decision, helping them see a path to achieving outcomes they may not have even thought possible.
But then it’s time to start negotiating the details, and our focus shifts to our own outcomes.
For many, it’s full of anxiety, where we are now hiding the details of what a “good deal” is, anticipating the onslaught of tactics and word art that erodes trust right at the goal line.
When I first got promoted to sales leadership, I was thrust into negotiating a multi-million-dollar deal with a multi-billion-dollar oil services company. I walked into a lion’s den full of procurement veterans, who were all prepared for battle.
By accident, fueled by my own anxiety, I discovered a simple, transparent approach to negotiating I now call Four Levers Negotiating.
Here’s what happened, and how you can use it in any deal.
The Room of 5 Procurement Leaders
I arrived at the airport to meet with my regional rep, who was managing a $7.5M opportunity for our 3D product visualization software.
We were in the final stages, and the procurement team from this oil services company was frustrated by the back-and-forth.
They asked to speak directly with someone who had the authority to make decisions.
So there I was…. at their office in Houston, Texas expecting a conversation with one procurement rep. My expectation was a simple conversation between myself, my rep, and the representative from the client negotiating the deal.
Instead, the client walked us into a room where 5 other procurement representatives sat, ready to do battle.
“Before we dig in, do you mind if I share the four things that drive not only our pricing model, but our organization’s financial performance?”
I’m not even sure what drove me to ask this, but I had just recently met with my CFO where we discussed the four key elements of every for-profit business in the world. I was buying some time, but what I wrote turned out to change everything.
So I walked to the whiteboard and wrote down what my CFO had shared with me just days earlier - the four fundamentals that drive every for-profit business:
- Volume
- Timing of Cash
- Length of Commitment
- Timing of the Deal
The clients looked at the whiteboard without much of a reaction and said…
The 35% Discount Ask
“In order to get this deal done, we will need a 35% discount.”
I didn’t balk. I didn’t go into a rant about our value and ROI. I didn’t offer to meet them part-way. Instead, I said:
“Remember the four things I wrote on the whiteboard behind you? Those are the four levers that drive both our business and our pricing. Maybe we can go through them one by one, and see how close we can get you.”
Here’s how I explained each lever in that room — and exactly how any seller could do it as well:
1: Volume: “The larger the purchase, the better for us, and the more we’re willing to pay you in the form of a discount. In other words, buy more, pay less per unit. “
(In this case, they weren’t ready to expand to more divisions yet, so we moved to the next)
2: Timing of Cash: The faster the payment is made for the “volume”, the better for us, and the more we’re willing to pay you in the form of a discount.
(In this case, it was a three-year deal with up-front payments, NET30: I offered 5% off if they prepay year two, 10% off if they prepay years two and three. They agreed.)
3: Length of Commitment: The longer the commitment to our solutions, the better for us, and the more we’re willing to pay you in the form of a discount.
(Their pricing was based on a 3-year commitment. We offered an additional 5% off for each year beyond 3, up to a maximum of 5. They stayed at three, but liked the transparency.)
4: Timing of the Deal: The more accurate our ability to forecast our business, the better.
(If they were willing to help us predict by mutually aligning around timing, that’s something we were willing to pay them for in the form of a discount. They did.)
There were no tricks, word arts, or fake urgency.
We provided a framework that established confidence in our pricing model, made them feel like collaborators, and built trust rather than eroding it.
For every concession we gave, we received something of equal value in return.
The $7.5M Self-Negotiated Deal
They signed the three-year deal on time, helping us nail our forecast, paid us for all three years up-front.
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.
The Four Levers became a shared language for collaborative negotiations, not only for them, but for all of our clients. I teach it weekly to companies all over the world now, too.
With the proliferation of information available to your clients, AI already exposing pricing models, and the ability for peers to connect and share, I don’t believe it’s any longer sustainable to have every client paying a different amount based on how well or poorly it was negotiated.
You can create a sound basis for your pricing. It doesn’t require high-pressure tactics, hostage-negotiator tricks, or any other personality to negotiate.
The Four Levers are a simple, human, transparent framework rooted in mutual value, and you don’t need a large deal to start using them.
