Diablo

Sr. AE

Politicker

Catalyst

Opinionated

Multi Year contract strategy... what is that you successfully do to nail?

Hey team,

Promised I have read the last few threads.

Looking forward to hearing more on how to nail nail these deals. It is easy to convert existing annual customers to switch as they know the value they get - some of the factors used are price lock, free xyzzy features, free training around the year, free additional licences or dedicated support, pricing comes last.

Curious to hear about your experience on nailing multi-year deals with the new customers? What you think best worked for you and didn't work?

-Diablo

👑 Sales Strategy

📈 Closing

☁️ Software Tech

14 comments

Sort by:

Burner

Valued Contributor

Commercial Manager

Really simple tweak. Introduce the commercials as 'most of our customers work with us on a two or three year basis. This is because they want the security of predictable costs and less legal overhead for renewals. We won't usually go beyond 3 years unless there's a true strategic partnership - where do you think you'll land on that spectrum?'

Saying you won't do more than x years is crucial. It makes them think they can get a real win by signing up for multiple years. The FOMO element of' most of our customers do x y z' is also massive. Give it a try and act with conviction!

CaneWolf

Politicker

Call me what you want, just sign the damn contract

Yup. I've done some of this. Another one is "we're not allowed to discount on 12-month contracts as our resource cost isn't justified until year 2."

Sunbunny31

Politicker

Sr Sales Executive 🐰

Yep, "our cost is amortized over (2, 3) years, so we can only provide discounts for the cost with a longer term commitment."

Diablo

Politicker

Sr. AE

This is a great insight, thanks!

poweredbycaffeine

WR Lieutenant

☕️

For us: buildling multi-year deals comes down to two things:

1) Price lock, even if they grow out of their tier (headcount based pricing)
2) Our solution takes more than a year to see the full value of the solutions since a component of it has to do with renewal management. They need to be around for year two, and then we get super sticky.

CaneWolf

Politicker

Call me what you want, just sign the damn contract

Point one sadly isn't always an option. I had to do multi-year without price caps and it was way harder. At that point you have to provide discount % protections.

Diablo

Politicker

Sr. AE

Got it. We have that element but as a last resource. Appreciate your view.

poweredbycaffeine

WR Lieutenant

☕️

Been there as well--but sometimes you get lucky when you're a young startup!

Diablo

Politicker

Sr. AE

Sure that's a good one.

Our value is realized in 3-6 months depending upon org size and structure but ther are monthly users as well. Though they contribute to more profits (as we avoid discounts) they are not committed for a long term, churn rates can be controlled via an annual & multiyear contract hence trying to see if there are any other touchpoints that can help us lock them into long term deals.

poweredbycaffeine

WR Lieutenant

☕️

Well, then I have nothing for you because those have never moved a prospect to want a multi-year in my experience. If you have a CSM then they should be doing that work (referenced above) as part of a standard workflow.

mitts2

Politicker

Account Executive

We tell our prospects that our standard contract length is 2 years for pretty much all of the same reasons@Burner mentioned. If they ask for other options we suggest 3-year terms with better unit economics and if they are dead set on 12-month terms, price goes up a bit. Traditional economies of scale type stuff. Usually ends up at 2 years unless there is long-term strategic play that warrants a longer term.

Justatitle

Big Shot

Account Executive

For us a multi year agreement unlocks a higher discount for the client. 9/10 times it works and it is also true

SaaSguy

Tycoon

Account Executive

I will offer discounts/incentives on multi year agreements.

Bravado is a community of trusted sales professionals endorsed by their customers.

Products

The War Room Jobs Salary Guide Tech Sales U

Company

About Us How It Works Blog Bug Bounty

Contact

Press Careers

If you are hired as a contract sales rep by a Bravado customer, we may ask you to prove access to the employee email account provided to you by that customer. This data will be shared with customers to track your sales productivity; customers can use this data to confirm you meet the minimum activity requirements to pay out your ramp stipend and commission.

Diablo

Multi Year contract strategy... what is that you successfully do to nail?

14 comments

Related posts

Multi Year Vs One Year, HELP!

Best strategy for multi year term deals?