A deal is not won just because everyone wants it

We had an enterprise customer who wanted to sign a five-year contract. With the term discount that goes with it. And at the same time with a right to withdraw after each year. That was not a negotiating position, it was a hard condition.

Anyone who has sat on the vendor side knows what the problem is. The discount was tied to payment in advance for all five years. If the customer exits after two years, we have to refund. The risk then sits in years that are far away, in a budget that has long been allocated.

Three parties, three legitimate interests

One of my salespeople had carried the deal for months. One of those you can always rely on. He put everything into it, and closing mattered for his motivation too.

He wanted to win it, and rightly so. The project was good, the budget was there, the customer had already planned internally. He stood clearly on the customer’s side.

Only the risk did not sit with him. It sat with the company, in a future in which he had long since been paid his commission.

That is not an accusation. That is how the model was built. And that is exactly the point you have to understand before taking a position in such a situation.

It is a known type of conflict

I read a thesis from the Springer BestMasters series on this, twelve interviews with B2B software salespeople. It describes this exact constellation as a conflict type of its own: the salesperson lines up behind the customer, the manager applies the brakes, and between the two sits a relationship of dependency.

Add to that the finding that high variable pay increases self-interest in the outcome of a negotiation. That is logical as soon as you say it out loud, and it is still rarely named openly.

One of the interviewees says it always feels as though you can only make one party happy. That you have to choose.

I consider that sentence the most accurate description of what goes on in a sales leader’s head in such moments. And I consider it wrong.

How we solved it

Annual payment instead of payment up front. Contract still over five years. The exit option stays.

For the salesperson that meant less commission in the first year, and that was no small thing for someone who had carried the deal so long. In exchange he gets a base level of quota attainment every year, as long as the customer stays. A one-off success became a recurring share in a customer relationship he built himself.

For us the risk was gone. No refund exposure in a financial year nobody has on their radar any more.

And the customer had to move too. His budget was released for that year, the change meant effort in his internal planning and a conversation with his procurement team that he had hoped to avoid.

In the end nobody had exactly what they originally wanted. But everybody had something they could live with.

Why a no is not leadership

As a sales leader you have to hold all three sides. The customer, who wants to hedge a real risk. The salesperson, who wants to and has to deliver. And your own company, which lives with the consequences for years.

Understanding alone is not enough here. In that moment you are above all a salesperson yourself, and you are supposed to help build the solution rather than withhold the stamp.

Nothing is more frustrating than rigid principle. A no without an alternative is not leadership, it is administration. Anyone in this position who only plays the risk guardian will sooner or later be routed around. Not out of malice, but because the organisation finds its own paths.

And whoever is meant to decide has to be allowed to

On the finish line salespeople do not need control, they need creative support. That does presuppose something many organisations do not give their sales leaders: a real scope for decisions.

Anyone who first has to escalate three levels up to change a payment schedule arrives too late. By the time the approval is in, the customer has run out of patience internally or the competition has moved.

So the question of how much decision-making room a sales leadership role actually has is not a formality. It decides whether the role is leadership or just a title with a reporting duty.