The founders I’ve worked with often stumble when it comes to negotiation. Not because they lack the capability – but because they’re too eager to close deals, especially with larger companies, and end up giving away more than they should.
Negotiation is fundamentally an exchange of value. While pricing discussions often take centre stage, effective negotiation involves much more than just haggling over numbers.
Start with relationship building
I say this about most things, but negotiation starts at discovery stage. In my experience, it’s incredibly difficult to negotiate effectively when you’re dealing with a cold or frosty relationship. The rapport you’ve built, the follow-ups you’ve done, and all those touchpoints throughout the sales process – these are what set you up for success when it comes time to negotiate.
Every interaction you have with a prospect is laying the groundwork for future negotiations. The stronger the relationship, the more likely you are to reach a mutually beneficial outcome.
The power of silence
One of the most powerful negotiation techniques I’ve learned is what I call the “80-20 rule” of conversation. Let the prospect talk 80% of the time while you speak for just 20%. This might feel uncomfortable at first – many founders want to jump in and explain everything about their product or process. But trust me, embracing silence really does work.
When you’re quiet, you’re learning. You’re gathering information about what truly matters to the prospect. Use phrases like “from what you’re saying…” to show you’re actively listening and understanding their position. This information becomes invaluable when structuring your response.
Know your non-negotiables
Before entering any negotiation, you absolutely must write down your variables – what you can and cannot flex on. At Cosmic Partners, for instance, we have clear non-negotiables: we won’t flex on price, and we won’t work with anyone outside of B2B technology. These aren’t arbitrary rules; they’re strategic decisions that align with your go-to-market plan.
Having these boundaries clearly defined gives you the confidence to walk away when necessary. And sometimes you do need to walk away. I’ve personally walked away from countless prospects who tried to rip apart our terms or negotiate down by 2-3%. Why? Because we know they wouldn’t be the right customers for us.
Leverage value
A common mistake I see founders make is bending over backward for larger companies simply because they’re eager to land a big-name client. They’ll agree to unreasonable demands, rush feature requests, or slash prices. This usually leads to problematic customer relationships and sets a dangerous precedent for future deals.
Instead, focus on leveraging value. If someone is pushing hard on price, look for something in exchange. Could you get a case study? A video testimonial? Could you adjust the feature set to match the lower price point? Remember, negotiation is about finding mutually beneficial solutions, not just giving in to demands.
Use the right tone
Your tone of voice during negotiations is crucial.
You need to be adaptable – sometimes more assertive, sometimes more curious – but always talk to prospects as peers, even if they’re from a much larger company or more senior than you. The minute you let a prospect have the upper hand, they’ll start talking down to you, and that’s when you lose control of the negotiation.
You have to stand firm
Here’s something interesting I’ve discovered: when you stand firm on your value proposition, you often gain more respect from prospects.
I’ve had numerous instances where I pushed back on unreasonable requests, and the prospect actually came back saying, “You know what? For the sake of 3%, I don’t know what I was doing. Let’s just sign the contract.”
Even better, these same prospects who tried to negotiate hard often become our best customers and advocates. Why? Because they respect that we know our worth and aren’t afraid to defend it. They’ve gone on to do video testimonials for us and become friends of the business.
Remember: It’s just part of the process
Here’s my final piece of advice: don’t take negotiation personally.
Understand that it’s simply part of the buying process. Your prospect’s job is to find the best product or service that meets their requirements at the best possible price. Your job is to ensure the deal works for both parties.
Yes, relationships might get a bit more tense or frosty during negotiations – that’s normal. But if you’ve built good relationships, maintained professional respect, and stuck to your principles, you’ll find that these temporary tensions quickly fade once the deal is done. Focus on delivering what you promised, and you’ll turn those tough negotiations into strong, lasting customer relationships.
Good negotiation isn’t about winning at all costs. It’s about finding the right balance between standing firm on your value and finding creative solutions that work for both sides. Get this right and you’ll not only close better deals but build stronger, more sustainable customer relationships in the process.
Author: Matthew Codd
I’m Matthew, I have 15 years of commercial leadership experience, helping VC-backed B2B technology companies scale revenue and transition from founder-led sales.
I use my experience to help early-stage start-ups with GTM expertise, sales best practice, and hiring insights.
I co-founded Cosmic Partners in 2022. We are SaaS sales recruitment specialists for VC backed B2B tech companies.
