Issue 04: When Trust is Broken

A deal always goes sideways before it closes. Enterprise deals rarely close smoothly. Why is that?

A couple of reasons:

1. There are always detractors and proponents within an enterprise organization. Multi-stakeholder sales doesn’t just mean you need to gain the support of your champions and sponsors, it also means you’re battling with stakeholders who don’t want you to win. And these detractors can show-up in the final innings of a deal.

2. Enterprise buyers can get emotional and so building trust becomes critical within the sales cycle. But in the thick of negotiation, many founders and sales teams run the risk of offending their sponsors. This can happen when negotiating positions aren’t conveyed properly either in writing or live on a call.

One of my clients recently had to deal with trust being broken on both sides.

The prospect was frustrated pricing structure had changed mid-POC and the startup founder negotiating the deal was frustrated the sponsor wanted to close the deal at levels where his startup would lose money.

Because neither side was willing to budge, the prospect went to one of the startup’s investors to backchannel their frustration. Luckily, the investor was prepped by the startup founder with talking points around why the current suggested price point from the prospect would be a non starter. The investor said the same thing the startup founder said around the company potentially losing money on the unit prices the prospect was pushing. Ultimately the prospect understood they were being unreasonable and agreed to re-engage the startup founder.

The problem with this situation now was that the startup founder lost trust in his prospect’s ability to be transparent and to negotiate through him vs. his investors. And so the next call between startup founder and the prospect sponsor who went behind his back was going to be critical.

For that call we practiced multiple scenarios and discussed taking the following approach:

1. Address that there needs to be a re-establishment of trust and communication. I advised the CEO to say something like, “I was a bit disappointed to hear you had to go to my investor to feel validated on the same points I made about the suggested price points being margin negative for us. I’d like to re-establish trust between us so that if we’re going to move forward with this contract we are both able to have a transparent line of communication. This partnership is important to the company and to me personally so it’d be great if we could work towards having direct, transparent communication vs. backchannel discussions.”

2. Re-confirm that the price point today (let’s say $100K for the sake of this example) does not work for you: “As mentioned and as you heard through our investor at $100K, we would lose money on this relationship. We value this partnership on many levels but at $100K we would be in a margin negative situation.”

3. Offer options to move forward: “If $100K is truly the maximum for you, I’ll agree to it. As the CEO I can make that call but if we’re going to lose money on the relationship, I’d love to discuss making this a public partnership with us both announcing our work together upfront and through an eventual video case study. If there is flexibility beyond the $100K, I can tell you that for this scope $400K is where we would break even on the relationship. Again, because of how important this is I can go down to $100K but then I’ll be asking for referenceability and an accelerated timeline to sign.”

Ultimately the prospect understood the founder’s position and while they won’t be paying $400K they are now determining a price point between $100K and $400K. I’m very proud of how this CEO handled this situation. He was one step ahead of his prospect and prepped his investor on talking points he eventually leveraged. He also spent hours practicing his talk track and thinking through different pushback scenarios with me. Delivery is everything in negotiation and through practice and preparation he’s now in a position to close this deal at a higher price point.

I’m taking a couple more founders on who’d like on-demand sales coaching for situations like the above. Learn more about the structure here and reach out to book a consultation session with me!

On-Demand Coaching: Limited space to connect with me directly 1:1 on a consistent basis where I’m “Sales Doctor on Demand”.

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