How to renegotiate a deal?
It can happen to the best of us. We pursue a deal, negotiate for the terms, put in all this effort and get them to sign the dotted line. Only to figure out a short while later, that the terms of the deal are bad. That’s sellers remorse.
What do you do now? Do you just try to make the best of a bad bargain? Do you go back to the prospect and renegotiate the deal?
If you do renegotiate the deal, how do you go about it? How do you bring it up with the prospect? How do you tell them what you both just agreed upon isn’t acceptable? With what words do you let them know?
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There’s something much more important than all these tactical questions …
Rather than asking for tactics and hacks and rhetorical tricks, take a step back first and think about the basic psychology of the negotiation.
The most important question you have to ask yourself is this ...
Are you willing to lose the deal?
If you’re not willing to lose the deal, forget about re-negotiating. Take the deal as it is. As long as you’re afraid of losing the deal, you’ll lose the negotiation. And what’s even worse: you’ll lose your credibility.
If you are willing to lose the deal though, you can go back to the buyer. Tell them with friendly strength:
“Listen, I really only want to do this when both parties are happy. And I want to be honest with you guys. I’m not fully happy anymore.
Thinking about the way we structured this deal, I’m not confident that we can serve you long-term and at the same time make a profit, and be able to provide you with [the service/the technology/the solution] you deserve.
This is not the right deal, and I think if we could only change this number, it would benefit both of us and would have a lot more longevity. Are you open to that?”
What if they don't agree and say no?
Accept the consequences. Tell them with friendly strength:
“You know what? I get where you’re coming from, and I hope you can see where I’m coming from. Maybe this isn’t a good deal to begin with. Maybe we are not a perfect fit.
It’s always sad to see this happen, but I’d much rather learn that now, than in two or three months after we’ve both invested a lot of time and money into this.
I want to let you guys think about it, but I truly believe that if we can’t get close to what I described to you, this deal probably shouldn’t happen.”
Then be willing to let go of the deal. If they say no, tell them the deal is off the table.
Why you need to go in with the willingness to lose the deal
The energy and attitude of being willing to walk away is the magic ingredient that will more often than not cause you to win the negotiation. It doesn’t make sense from a logical perspective, but it does make a difference in the real world.
Even if you don’t win the negotiation, at least you’re winning credibility. People will respect you and talk about you highly. They might not buy today, they might be six months down the line, and if they do, they’re going to trust your word and they’re going to know that you always come from a position of strength, and you’re not somebody who can be pushed around.
Telling one of your largest and oldest customers they’ll have to start paying twice as much?
We did this once with our sales platform. One of our customers was generating a lot of costs doing tons calls in obscure countries where the calling costs where very high. We were making very little money on them, even though they were a large customer.
It always sucks to have to go to a large customer that’s been with you for a long time, and ask them to pay more money.
We actually encountered resistance from our own sales team, and our reps made valid points. This customer was a large company, they had referred many other customers to us, and we didn’t want to risk the goodwill we’ve had with them.
But it was inevitable. We couldn’t keep servicing this customer profitably on the old terms, and we needed to almost double the price.
We reapproached them, we explained exactly why the price wasn’t sustainable, we gave them plenty of time to make their decision on whether they wanted to stick with Close despite the price increase or not. If they chose to move away from Close, we promised them our engineers would make sure that the transition to another solution would be taken care of.
Obviously we got some pushback from them about doubling their bills. But eventually they decided that the value we provided was still significantly higher than the price they paid, and we were still the best fit for their needs. They appreciated our transparency and started paying us a lot more money. We can now really afford to service and support them, and they’re still incredibly successful with us.
Want all of my best negotiation techniques? Get a free copy of my book The Founder's Guide To Sales Negotiations!