How to Expertly Negotiate a 6-Figure Sales Contract

The sales process, culminating in the contract negotiation, is supposed to be a mutually beneficial endeavor. But, is it?

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By Danny Wong


Opinions expressed by Entrepreneur contributors are their own.

Learning to negotiate is a critical life skill for everything from haggling at a flea market to drawing up the terms for a billion-dollar merger. Yet so many of us remain wary about being taken for a fool every time we enter into a negotiation.

Related: 9 Ways to Negotiate a Contract Like a Boss

Regardless of any hesitation, B2B sales reps must learn the ins and outs of effective negotiation if they hope to maximize their contribution to the company and exceed their sales goals. This shouldn't be a zero-sum game, as studies show that negotiating from a position of trust and mutual goals leads to deals that, on average, are 42 percent more valuable.

Discourage concessions, but remain open to trade-offs.

The entire sales process, culminating in the contract negotiation, is supposed to be a mutually beneficial endeavor that provides value for both parties in a logical balance. Concessions, by their nature, are not mutually beneficial, since one party is explicitly giving something up solely for the benefit of the other party.

Trade-offs, on the other hand, can be an important tool in securing a deal. In many situations, meeting your client's request can be advantageous if you receive something of value in return, especially if you have already anticipated such a trade-off and planned on using it to ask for something specific.

Many B2B organizations choose to extend extra benefits in exchange for referrals, inclusion in customer-success stories or the ability to strike a deal within a specific time frame. The return value doesn't have to be exactly equal (a difficult concept to figure out when you're comparing monetary value with qualitative value, anyway), but it's crucial that the terms of the negotiation remain win-win.

Related: Be Calm, Flexible and Speak Up in a Negotiation, and Everyone Can Win

Include some non-monetary points in the negotiation.

Price should be only one facet in a well-structured contract negotiation. Also, points that are unrelated to monetary concerns can provide natural breaks from pricing discussions, which often turn tense.

There are many other opportunities for each party to provide value during the negotiation that don't involve money, so take advantage of them, to enhance the customer experience through other means. Some of these may include training resources, publicity considerations and media mentions, or free trial periods for upcoming products.

Frame the conversation around value.

Prospects often like to push back on price, both because they've been tasked as decision makers to get as much as possible for their organization while expending limited resources, and because getting a price reduction is a tangible achievement that they can take back to their colleagues.

In order to avoid giving out too many costly discounts during the negotiation, skilled salespeople need to creatively frame the discussion around value instead of price. This is especially germane in an environment where discount selling has been shown to reduce the long-term value of a client for SaaS organizations by nearly one-third.

Come prepared with evidence to backup your value-driven assertions

That being said, if you're going to successfully place the concept of value in the center of the conversation, you have to be prepared to defend it. Broadly speaking, this involves two considerations: having a thorough understanding of what value your client hopes to gain from the sale, and coming into the negotiation with evidence that strengthens your claims that your product is specifically positioned to deliver said value.

Armed with this invaluable knowledge, you can confidently and consistently fight for your product at your price knowing that it has worth for the customer.

Always let integrity guide the negotiations

It's great for salespeople to stand confidently behind their products, but what you can never do is willfully overpraise or otherwise relinquish your integrity in order to close a contract. Many inexperienced sales reps may find themselves tempted to fudge some of the details to get past a particular sticking point with a client.

"After all," they think, "signing this six-figure deal will benefit everyone at my company, and that's worth the greater good." It definitely isn't and this kind of malfeasance can lead to ruined relationships and reputations at best, and legal troubles at worst.

Related: 11 Tips to Negotiate Like a Pro

Determine beforehand when to walk away respectfully

It may sound counterintuitive, but every sales professional has to enter a negotiation with criteria for walking away, and having a hard line for when to end a sales conversation can actually help you save the deal. Ideally, you've spent the entirety of the sales journey laying out the case for the value of your offering. If the client is pushing back with too many unreasonable demands you can respectfully say, "With the terms you're asking for, the deal is financially or operationally unfeasible for my company, and I'm afraid we can't move forward."

If clients do see value in the product, they may well realize they were asking for unfair concessions; if they don't, then you've saved yourself from an unfit partnership.

Danny Wong

Entrepreneur, marketer and writer.

Danny Wong is an entrepreneur, marketer and writer. He is the co-founder of Blank Label, an award-winning luxury menswear company, and leads marketing for Receiptful, a platform to supercharge all customer interactions for eCommerce stores, and Tenfold, a seamless click-to-dial solution for high-performance sales teams. 

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