Proposal negotiation

Commercial negotiation has your final proposal as its output.

Final negotiation is the last step typically before a decision. More accurately, the final negotiation should occur after the yes or no decision and only occur when the answer is “yes subject to price”

By this point, the customer will have received a verbal indication pricing scope with them. Likely costs you have confirmed the willingness to proceed with priority high on a budget available.

Final negotiation should tip the deal over the line and can only occur when everything else aligns for the customer and is the first step of the final hurdle of getting to a point where you can invoice and recognize the revenue.

Amplifying Factors: Mutual Close Plan Champion  Decision Maker Signer


Further reading :

Strategies and Tactics for Sales Negotiation

12 Essential Negotiation Skills For Salespeople

Negotiating with a Customer You Can’t Afford to Lose

RED – Shared in detail and seems expensive.

Assuming they indicate this to you rather than you agree with this, you may need to simply hold your ground as it could be a negotiation tack tactic. However, consider the value-add for the customer and the competitive situation to guide you as to how to progress.

AMBER – Shared in detail and neutral reply.

If this is after you have indicated the price you may need to do a temperature check with them to ensure a good commercial fit and seek different ways of mitigating the risk to close the business.


Green – Shared in detail and still in budget.

This is a good indicator for closing the business commercially. You may wish to consider adding extra value with more products to increase the value of your deal.


Mitigations – What to Do?

Final negotiation should only happen once. Other dimensions than the dollar value of the deal come into play, such as payment terms, length of the contract, break clauses, charge for additional users, et cetera, et cetera all of these form part of the mix of the final negotiation.

Final negotiation should only occur when everything else has been agreed upon. By this I mean you are the chosen solution, they want to go ahead, you’ve agreed to a date that they want to be live, and now it’s a matter of sorting the commercials.

Only ever negotiate with the right person or people. Check before you do the negotiation that there won’t be another person or party involved later who wants to pressure for the best price.

In SaaS best price isn’t necessarily the best value. If they are a small company, they may prefer monthly or quarterly payments as opposed to annual payments, so maybe holding the price and conceding on the payment terms may offer them better value. So don’t always assume when they say it’s expensive they may not really mean they want of better price but better commercial terms.

Only negotiate verbally. Your final proposal should not be submitted in writing only as a confirmation following a verbal conversation. You simply can’t sell by email. Trying to do that results in the commoditization of your offering, as opposed to a proper understanding of the value of the differentiated value. All final proposals need to be time-bound and I would suggest you include the phrase “subject to approval” at the bottom of any written offer. This allows you to tweak the pricing if they come back with final demands – so for example, you may have agreed to everything on a three-year committed contract and at the last minute, they request the same price for one year. You simply say “I wouldn’t get it approved” and then you can re-negotiate and re-tweak the pricing accordingly. Of course, you may be happy to take it as is, but it leaves open the option for you.

Always negotiate a firm close date and make it clear that this is central to your offer. Customers usually understand that when it’s made very clear to them but vaguely putting it at the bottom of a proposal confirmation email is usually not clear enough and you need to revisit that and make sure that they are committing and understand the offer is based on an agreed close date.

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