Latest / Closing the Deal with Fexingo: Sales, Negotiation, and Revenue Conversations for Operators / How One Rep Won by Asking for a Future Price Increase
Transcript
- Lucas: There's a sales rep I've been tracking for a few months — sells manufacturing execution software, mid-six-figure deals, typical enterprise sales cycle of five to seven months. Luna: And what'd they do that was different? Lucas: They asked the buyer to agree to a future price increase before signing the contract. Not a discount, not a concession — an increase. Twelve percent, scheduled to hit eighteen months after the go-live date. Luna: Wait — you're saying the rep proactively asked for more money down the line? And the buyer said yes? Lucas: Not only said yes — closed the deal fifty-three days faster than their average cycle. And renewal rates in that account have been higher than the portfolio average. Luna: Okay, I need to understand the mechanics here. How do you even bring that up without getting kicked out of the room? Lucas: The rep framed it around shared risk. They came with data — their own raw material costs up twenty-two percent over two years, labor inflation at eight percent annually, and a third-party commodity index projection showing another fifteen percent increase in the next eighteen months. Luna: So they essentially said, 'We're going to have to raise prices anyway — let's agree on the number now so you can budget for it and we don't have to renegotiate under pressure later.' Lucas: Exactly. And the buyer was a director of manufacturing ops who had been burned twice by surprise vendor price hikes in the previous eighteen months. For him, predictability was worth more than the twelve percent itself. Lucas: It's a classic application of loss aversion — Kahneman and Tversky territory. The pain of a surprise increase later felt bigger than the pain of an agreed increase now, especially because the agreed increase was eighteen months out and got framed as a hedge. Luna: But what about procurement? Most procurement teams I've worked with have a mandate to lock in fixed pricing for three years. They'd see this as a non-starter. Lucas: That's where the timing matters. The rep didn't bring it up in the final negotiation phase. They raised it during the discovery call, when the buyer was still defining requirements. Procurement wasn't even in the room yet. Luna: So the buyer became an internal advocate for the increase before procurement ever saw the term. Lucas: Right. By the time legal and procurement reviewed the contract, the operations director had already socialized the rationale internally. The increase got framed as a proactive risk-management measure, not a vendor squeeze. Lucas: And the rep backed it up with a clause that tied the increase to a specific commodity index — if raw material costs didn't rise above a threshold, the increase wouldn't trigger. That transparency actually built trust. Luna: Interesting — so it wasn't an unconditional hike. It was conditional on actual cost increases. Lucas: Exactly. The buyer essentially got insurance: if costs stay flat, you pay flat. If costs go up, you pay the pre-agreed increase rather than a potentially larger market-rate one. Luna: I'm trying to think of where this would backfire. If the rep had a weaker relationship, or if the buyer was purely cost-minimizing rather than risk-minimizing… Lucas: Yeah, this isn't a universal tactic. It works best when the buyer values predictability over absolute lowest price. In this case, the buyer had a personal pain point — the surprise hikes — and the rep tied directly to that. Lucas: There's also a psychological framing effect here. By asking for something that looks like a concession from the buyer — agreeing to pay more later — the rep actually signaled confidence in their own product. They're saying, 'We're so sure you'll still see value in eighteen months that we're willing to negotiate the future terms now.' Luna: That's a power move. It flips the usual dynamic where the buyer is the one asking for guarantees. Lucas: Made me think about how we cover these stories week after week — each one is essentially a case study in understanding what the buyer actually values versus what they say they value. Luna: And if those conversations have moved your thinking forward in any small way, a couple of dollars a month is genuinely what keeps these going — buy me a coffee dot com slash fexingo, if you've gotten something out of them. Lucas: Yeah, it adds up. No ads, no sponsors, just listeners who find the episodes useful. Back to the price increase tactic — the other piece that made it work was the rep's willingness to walk away. Luna: They had a walk-away point built around the increase? Lucas: Not in a theatrical way. But they had calculated that without the increase, the deal would be unprofitable in year two given the cost trends. So they genuinely couldn't agree to a multiyear flat price. That conviction came through in the conversation. Luna: So the increase wasn't a negotiation tactic — it was a business requirement that they were transparent about. Lucas: Exactly. And because it was real, they could defend it with data. The buyer sensed that this wasn't a ploy to extract more money; it was a structural necessity. That authenticity is hard to fake. Lucas: The deal closed at a total contract value of one point four million over three years. The increase added roughly fifty-five thousand dollars in year two and sixty-five thousand in year three. Not huge in percentage terms, but it turned a break-even deal into a profitable one. Luna: And the buyer? Did they ever regret it? Lucas: Eighteen months in, the index triggered — raw material costs had risen fourteen percent. The buyer's increase was twelve percent, so they actually paid below market. The rep told me the buyer thanked them at the next quarterly review. Luna: That's the ideal outcome. But I wonder about the broader applicability. If every rep started doing this, buyers would catch on and the framing advantage would disappear. Lucas: Sure, but the underlying insight isn't about the tactic itself. It's about asking for something that aligns the incentive structure over time rather than just at the point of signature. Most sales negotiations optimize for the moment of close, not for the relationship over the life of the contract. Lucas: This rep optimized for long-term alignment, and it worked because the buyer's incentives — predictability, risk reduction — were aligned with that. Luna: So the question every rep should ask is not 'What can I get the buyer to agree to today?' but 'What agreement would make both of us better off in two years?' Lucas: That's the takeaway. And in this case, the answer was a pre-negotiated, index-linked future price increase. Unconventional, but it worked because it was honest. Luna: I'd love to hear from listeners who've tried something similar — whether it worked or blew up. Either way, there's a lesson. Lucas: Absolutely. For now, the core idea: if you have a genuine cost pressure, don't hide it. Bring it into the open early, tie it to a transparent mechanism, and let the buyer decide if predictability is worth the price.