Latest / Sales Leadership with Fexingo: Quota Carriers, Sales Managers, and Revenue Teams / The Sales Rep Who Lost a Deal on Purpose and Won
Transcript
- Lucas: There is a story about a SaaS rep named Elena who, about three years ago, was in the final round of a negotiation for a $500,000 annual contract. Big logo, lots of internal champions, everything looked good. Luna: The kind of deal that makes your quarter. Lucas: Exactly. The prospect pushed back on one term — a three-year commitment with a 15 percent escalator. And Elena, instead of folding or fighting, said: 'You know what, I think we shouldn't do this deal.' And she walked. Luna: She walked away from half a million dollars? Lucas: On paper, yes. Her VP called her within an hour, furious. But here is what happened next. Six months later, the same prospect called her back. They had evaluated three competitors, none of whom walked away, and they felt Elena was the only one who was actually looking out for their interests. Luna: So she lost the battle and won the war. Lucas: She signed them eighteen months later — a $1.7 million multi-year deal, no escalator, better terms for both sides. And the relationship has generated over $4 million in total revenue since then. Luna: That is the kind of story that sounds like a sales myth until you see the data. Is there research backing this up? Lucas: There is. I pulled some numbers from a study done by the Sales Management Association. They looked at 200 enterprise sales cycles and found that deals where the rep explicitly pushed back on a prospect's demand — not just on price, but on timing or scope — had a 23 percent higher five-year customer lifetime value. Luna: Because the prospect respects you more. Lucas: And because you filter out the bad-fit clients early. The same study showed that churn among clients who 'won' a big concession in the first deal was 40 percent higher than clients who started with a balanced agreement. Luna: So the classic 'always be closing' mentality might actually be hurting long-term revenue. Lucas: That is the provocative take, but I think it is more nuanced. The key is knowing when to push back and when to walk. Elena didn't walk because she was being difficult. She walked because she realized the prospect was asking for a structure that would make both of them unhappy in year two. Luna: How did she know that? What signal told her this was the moment to lose on purpose? Lucas: She told me it came down to one question she asked herself: 'If I sign this deal exactly as they want it, will I be proud to call them as a reference in two years?' And the answer was no. The escalator clause would have forced annual price increases that their procurement team would resent, and she could see the relationship turning adversarial. Luna: That is a high bar. Most reps are taught to close first and fix problems later. Lucas: And that works fine in transactional sales. But in enterprise B2B, where the average deal takes six to nine months and involves ten stakeholders, the cost of a bad fit is enormous. You waste implementation resources, you get a bad reference, and your churn metrics take a hit. Luna: I have seen that happen. A former colleague once closed a huge deal with a client who demanded a custom integration that the product didn't support. The rep got the commission, but the client churned within a year, and the whole team spent months building something no one else could use. Lucas: Right. And that is the tragedy. The rep made their number in the short term but damaged the company's long-term capacity. Elena's approach is rare because it requires confidence that another deal will come. Most reps don't have that luxury. Luna: So how do you train a sales team to have that discipline? Lucas: Before we get into tactics, I want to mention something that relates to this idea of long-term thinking. You know, we deliberately keep this podcast ad-free. No sponsors, no interruptions. That is a choice we made because we believe the conversation is more valuable without a product pitch every eight minutes. Luna: And it works the same way. If these conversations have moved your work forward in some small way, and you want to support that choice, the link is buy me a coffee dot com slash fexingo. Lucas: Exactly. It is a simple way to keep this independent. Now, back to training. The most practical tool I have seen is something called the 'walkaway criteria' exercise. Before a rep enters the final negotiation, they write down three conditions that would make them walk away. Luna: Things like 'demand for unlimited support at no cost' or 'a 30-day termination clause for them but not for us.' Lucas: Exactly. And they share those criteria with their manager before the call. That creates accountability. If the prospect raises one of those red flags, the rep has permission to pause or walk. Without that pre-commitment, it is too easy to rationalize. Luna: What about the psychology? There is a concept called loss aversion — people feel losses twice as intensely as gains. When a rep is about to lose a half million dollar deal, the pain is real. Lucas: It is. And that is why this strategy is hard. The rep's brain is screaming: 'Do whatever it takes to keep this.' But the data says that if the deal is bad, losing it is a gain. You free up capacity for a better deal. Luna: I read a study from Gong that analyzed 100,000 sales calls. They found that reps who used the phrase 'I think we should pause here' had a 35 percent higher close rate in the next quarter compared to reps who pushed through. Lucas: That is exactly the kind of data point that validates Elena's instinct. And it is not just about walking away. It is about signaling that you are a partner, not a vendor. When you are willing to lose, the prospect trusts you more. Luna: But there is a risk. What if the prospect just says 'okay' and leaves? Then you have lost real revenue. Lucas: That happens. And you have to be okay with that. Elena told me that she lost two deals in the year after that first big one where she walked. But the three deals she won more than made up for it. The key is that her win rate stayed the same — around 30 percent — but the average deal size and retention both went up. Luna: So the metric to watch is not win rate, but revenue per rep over a rolling 12-month period? Lucas: Exactly. And churn. I think sales leaders should track a 'bad-fit flag' — deals that closed but churned within 12 months. If that number is above 15 percent, you have a problem. And the fix might be training your reps to lose more deals early. Luna: That flips the conventional wisdom on its head. The VP of Sales who yelled at Elena for walking away — did he ever change his mind? Lucas: He did. After that $1.7 million deal closed, he made Elena the case study in the next sales kickoff. He now asks every rep in the final stage to write their walkaway criteria. Luna: That is a good turn. So the practical takeaway for a rep listening today: before your next big negotiation, write down three things that would make you walk. And if the prospect triggers one, have the guts to say, 'I think we should pause.' Lucas: And if your manager pushes back, show them the data. The Sales Management Association study, the Gong analysis — the numbers are on your side. The question is whether you have the confidence to act on them. Luna: I think the best sales reps have always known this. They just don't talk about it because it sounds counterintuitive. Lucas: That is probably true. But now we have the evidence. So the next time a deal feels wrong, ask yourself: am I closing this because it is good for both of us, or just because I am afraid to lose? Luna: And if the answer is the latter, you know what to do. Lucas: Yeah. Walk away. And trust that the right deal will find you.