Contract Negotiations — Why Your Sales Team Needs to Participate
As you might expect, our family’s Thanksgiving celebration this year was not “normal.” Festive and fun — but definitely not normal.
Typically, we have several relatives visiting — some on the day itself, others over the long weekend. Most years, by the time Sunday rolls around, everyone has had their fill of turkey, dessert and football (okay, there’s really no such thing as too much football!).
This year, it was just Brigid and me, with Katie and Matt, two of our kids. We had a wonderful dinner, played some games, and had lots of fun. But overall, so much quieter.
One thing that didn’t change was the food shopping — I did it, as I do almost every year. Brigid has been in charge of the menu planning; my job has been to take her list and do my best to bring home all the goods.
Of course, even with a detailed list in hand, “in the moment” decisions invariably arise — questions that weren’t anticipated. Seasoned breadcrumbs? Turnips or rutabagas? Which cranberry sauce? How many sweet potatoes constitutes “enough?”
Most years, I do pretty well. But the truth is, the only way to really get things right would be for Brigid, the chef — the person with all the relevant knowledge — to join me at the grocery store.
When it comes to contract negotiations, the same logic applies.
Your Salespeople Need to Participate in Contract Negotiations
Having your legal team handle the negotiation and completion of your written contracts without your salespeople present is not a terrible idea. You can certainly be confident that the legal aspects of the deal will be well covered. Without issues, the transaction will close.
But, like sending me alone to the grocery store to do Thanksgiving shopping, there’s a good chance that questions will arise that could have been better handled if your salespeople had been present. I’ve seen many instances where the sales team’s involvement was — or could have been — critical.
The sales team has a clear understanding of the customer’s situation — budgetary constraints, internal deadlines, technical idiosyncrasies, competitive alternatives, etc. — not to mention knowing why the customer chose your (the vendor’s) offering in the first place. The sales team knows what’s driving the customer to invest in your product and close the deal.
For example, maybe your product offers unique functionality that satisfies a specific customer priority. Maybe the customer’s affiliates have had success using your products. Maybe your underlying technology or architecture is a better fit for the customer.
In other cases, certain pricing may have been offered in exchange for a certain contract length or transaction close date. If these “concessions” need to be amended, only the sales rep can explain the history and/or propose amendments to the pending arrangement.
The point is, these are business considerations, not legal ones. Having the sales rep involved until the contract is signed helps your legal team navigate most effectively — arming them with the information necessary to know when to push harder, when to compromise, and when to walk away.
By the time you get to the contract negotiation process, particularly for large-ticket transactions, the sales reps will already have been working closely with the product managers, engineers, support reps and others inside the customer organization. If questions or issues arise during negotiations (and they always do), the salespeople know who to contact to get answers or reach a compromise so that both sides get back on track and mutually focus on closing.
Again, your legal team usually knows little about the pre-sales activity. Concerns that might have been dealt with promptly had a sales rep been present can grow quickly, slowing down — even killing — a potential transaction.
Subject Matter Expertise.
In many cases, the customer’s legal team may raise issues related to product performance and underlying technology issues. At this point, a sales rep can jump in and offer more detail, pointing out, for example, that the customer carried out a successful proof of concept (POC) or participated in a compelling product demonstration. In other cases, the rep (taking into account confidentiality) might introduce the prospect to an existing customer that has satisfied similar concerns.
Sometimes, the customer’s legal or procurement team may raise concerns that aren’t relevant to your offering (e.g., questions about how certain data, which won’t be collected, is processed). Your legal team may contend (usually at a high level) that the concern is misplaced, but these issues don’t usually get resolved until the customer’s internal resource weighs in (at the sales rep’s invitation) and explains why the concern is a nonissue.
Fundamentally, contracts are business arrangements situated within a legal framework. When the sales team is absent from negotiations, the vendor’s legal team doesn’t have as much context to answer questions and can be limited in its ability to deter concerns.
The sales rep’s absence risks completing a timely closing. On the other hand, a sales rep’s involvement will lead to a more effective closing, guiding the vendor’s legal team to the best possible outcome.