Making salesperson "sweat at quarter end"

You know the thinking. Desperate to close the deal, he/she will cough up a little more discount. It is time to retire this negotiation “best practice”. I happen to think it is overused – by both sides – buyers and vendors. I know IT and procurement execs who put in their Outlook calendars reminders of quarter and year end dates of their major software and other IT vendors. I started recommending the practice when I was at Gartner 10 years ago. If you accept that vendors have smart pricing and licensing executives, you hopefully agree they know that by now it is a common technique – and that they factor that in to their pricing. Worse, I have seen that if a deal slips in to the next quarter, vendors withdraw their “last minute” discounts and the customer spends weeks negotiating it back. I have seen projects delayed by weeks – the cost of the delay, the underutilized implementation team etc far exceeds the additional software or services discount.

The joke in the software industry is sales people only work 12 days a year – because most of the deals are closed in the last 3 days of a quarter. We have learned from industrial supply chains that helping vendors smooth out their sales and production cycles allows them to become more efficient and pass along better pricing. I happen to believe we can do something similar with technology procurement and selling. When I work with clients, I tell them that technique is nice to have in the back pocket, but I try to get far better pricing based on an analytical negotiation. And I try to get it closed by the 2nd month of any quarter.

Am I naïve? I did a webinar last year for several procurement executives, and when this topic came up one of the attendees sent this comment back: “If you were an experienced negotiator you would know that this tactic is very much used and a viable leverage”. I know it is very much used - I also know what discounts I have delivered to my clients especially when I tell the vendor sales teams I will deliver the contract way before quarter end. In return I expect them to not play their usual pricing/contracting games. If buyers can retire their tired practices, vendor sales people/managers need to give up a few "stupid tricks" of their own.