“What do I do when my long-time customer calls me and says they want to renegotiate a deal we’ve reached previously?” I get asked that a lot by sellers and business leaders…especially these days.
But don’t blame the current environment! This is an entirely predictable and preventable development. And it’s your job to tackle this skillfully.
In the first part of this series, I showed you how to think pre-emptively about this common business problem. I identified the steps you must take with every one of your clients to do all you can to prevent deal renegotiation from happening in the first place. Next, I talked about how you must rethink the way you look at value in your sales process, and told you to stop treating it as something you do just once. Instead, you must start seeing it as an activity that just keeps on growing in importance—well after that original deal gets signed.
So, let’s say you’ve covered all those steps. You’ve made a compelling case to your customer. And yet, they’re still pressing for a meeting at the negotiating table.
When you’re at that point, it’s time to talk about renegotiation tactics.
Ensure you have an accurate definition of your customer’s problem. When a buyer says they want a new deal with new terms, what they’re really seeking isn’t just about paying less money for something. Understand what that money represents to them. Here’s an example: one day, a client of mine in the oil industry got a call from one of his buyers. “The market changed,” they say. “We need you to cut your prices.” My client could have done what everyone else was doing and acquiesced. Instead, he did some digging through his network and discovered the buyer’s real problem. They were under immense pressure to cut their maintenance budget. So instead, he responded to the buyer saying, “I’ll show you how you can cut that budget right to the bone just by paying a little more for a higher-quality grade of oil.”
Call in the cavalry. Stop treating renegotiations as a battle of us versus them. Instead, make it a matter of all of us being in this together. Call on that trusted network of contacts you’ve been amassing. Build consensus. Use compelling examples. Get those contacts to advocate on your behalf. They’ll tell your renegotiating partner important facts you can’t convey as convincingly on your own. Your cavalry doesn’t even have to have a lot of people in it. They just need to have influence. A client of mine is the CEO of a large manufacturing firm. He talks regularly to his biggest customer’s CEO. So, when his sales team informed him one day that the buyer wanted to renegotiate terms, he made a personal call to his peer. He gained a valuable insider perspective on what was really going on. Being able to reach out like that can make the difference in gaining a holistic picture of a business problem. And that takes me to my final point.
Stop seeing a call to negotiate as bad news. A buyer who presses for renegotiating a deal is not necessarily a bad-news development for you. Use the situation to your advantage by learning more and engaging with more people. Think bigger than your agreement with the customer. Ask questions that broaden the discussion beyond your products or services. Ask them:
- “What’s driving this request?”
- “What do you need to accomplish with this discount?”
- “Who else is affected by this?”
- “Who is driving this push to reduce our fees?”
This will help you prepare and then respond skillfully because you’ll understand the bigger picture to their problem. Knowing more puts you in a position of power, which helps you and your client find better solutions together.
As you can see in this three-part series, a client that’s pressing you for a new deal isn’t something for you to fret over. It’s a signal for you to dig deeper, ask more questions, and to gain a better understanding of what’s going on within your customer’s organization. Often, successfully addressing their underlying problems can prevent you from having to go back to that negotiation table altogether. But even in cases where it can’t, careful legwork and probing questions will ensure you are better networked and better positioned to deliver proven value that others will attest to.
Understanding your customer’s business problems is fundamental for success in sales—from junior positions all the way to the CEO level. Your mastery of this will put you in a stronger position to be creative, resourceful, and persuasive at the negotiating table.