End of Qtr/Year Price Objection

It’s happened to most of us in the enterprise software sales marketplace.  You’re in the final review meeting.  Your proposal has been verbally agreed to, and your prospect pulls out the “higher authority” objection mentioning that the CFO or someone wants/needs a price concession.  Your commission statement flashes before your eyes (without this deal!).  The poker game begins.

Strategic sales excellence dictates that you calmly address the objection directly with questions to expose the issue.  For this example, we will assume it is purely a gambit to get a better deal.  I have used different combinations of the following with good results.

In any case, it is time to review the key value points your solution will deliver and quantify the pain that will be addressed.  It is important, during this review,  to gain agreement throughout the discussion on each point.  If you don’t, you haven’t finished selling, and you have missed something in your process.

Now the fun starts.  If you are extremely confident, you can employ a soft version of the “take-away” close which goes something like:

“Bill, I’m sorry we seem to be on different planes, here.  Based on the value we provide which addresses your issues at the price we discussed, I expected we would proceed as planned.  I can only wonder if perhaps our solution isn’t the right one for you.  What do you think?”  He who speaks next loses.  “Bill” won’t concede at this point, but you have shifted the negotiations to a different level, and taken a much more powerful position from which to negotiate a settlement.

Another approach for those of us in the SaaS/subscription world, is to suggest a compromise.  Consider offering to extend the subscription by one month, in return for accelerated payment terms. You need to get something in return for the implicit discount of the 13 month subscription and full price on accelerated terms makes the finance department happy. 

One final approach, and the one I like the least, is to agree to a lower price in return for a reduction in services.  This approach puts the long term relationship at risk because your solution may not be used in an optimal way, and the overall value may be compromised. 

What’s your favorite/most successful approach?

Holiday Season Focus, Discipline, and Leadership

This time of year is challenging for sales teams with a December fiscal year-end.  It’s no wonder leading software companies like MSFT and Salesforce.com end their fiscal year’s on different schedules!  That said, there are two dynamics that must be planned for.  

The first is closing crucial year-end deals.  If you haven’t already asked the question (“Is there any reason why we can’t conclude this transaction before Dec 23rd?) there is no time like the present.  In a perfect world, that question would have been answered already in the qualifying discussion related to your prospect’s purchasing process ( who? how? when?).  The answer to that question will have a direct impact on your forecast for December and Q4.  It is good practice to jointly build in a detailed timeline with your prospect to address the steps that need to be completed.  These include proposal modification, draft agreement submission, and availability of key resources including legal.  Well planned and executed sales processes will deliver your agreements on the 23rd. 

The second dynamic is your or your team’s January/Q1 pipeline.  It ’s easy for sales teams to spend an inordinate amount of time staring at the phone and fax machine “wishing” it to come to life with good news from your prospects.  It’s easy to get away from the on-going requirement and imperative of filling and managing the pipeline.  It is crucial for teams to maintain continued momentum and activity for January/Q1 deals.  This requires discipline, focus and leadership during a time that features a high degree of distraction and competing priorities.  Don’t fall or let your team fall into the trap of losing sight of next month and quarter.  There’s nothing better than having a good January pipeline enhanced by a few deals that didn’t make Q4.  The result is a solid January and a foundation for Q1 success.

Good luck!