Negotiations can be tough, especially when the balance of power isn’t in your favor. I recently worked with a client who was in a lopsided contract with a Fortune 100 company—a deal inherited from an earlier misstep. They were stuck giving away some services for free and despite their best efforts to renegotiate through softer tactics, they kept hitting a wall in their conversations.
The decision-maker then delegated the negotiation process to procurement, and things got even worse. Our client was facing the classic playbook—cost breakdown requests leading to unbundling and cherry-picking, new voices slowing progress, and misdirection at every turn.
Our client was struggling to level the playing field, and the account was losing substantial profitability for their business. Instead of trying to please their customer’s procurement team (and slowly descending into a race to the bottom against themselves), we suggested they take a calculated risk. They chose to pull back the premium support they had been providing—support that wasn’t contractually required, but had been offered to keep up with a demanding, high-volume account.
The team worried about jeopardizing the business and hurting the relationship, but the move worked. It helped shed light on the fact that the two companies were not in a fair agreement. Almost immediately, the customer’s procurement team went back to the decision-maker, who reopened direct discussions with our client. This shift led to a renegotiated, fairer contract.
Key Takeaways:
- Involve Decision-Makers: Procurement teams often stick to their tactics, but decision-makers focus on optimizing partnerships. Bold moves can help escalate discussions to the right level.
- Know Your Leverage: Sometimes when procurement is turning up the heat, it feels like you don’t have any leverage. When we took a step back, we realized their premium support was invaluable to their customer. This support became a great lever to appropriately call their bluff and offer to drop to a lower-tiered offering. In this case, the threat of losing the support forced the company to stick to a fair price.
- Be Willing to Take Risks: Negotiations aren’t always about playing it safe. Sometimes bold action creates the opportunity for meaningful change.
When negotiations feel stuck, don’t be afraid to take calculated risks to shift the dynamic. These conversations might be uncomfortable, but they can be necessary to achieve a fair and productive outcome. In this case, speaking up, getting the decision maker back to the negotiating table, and re-aligning price to value helped to save the company $1M+ in annual revenue.
