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Multi Year Vs One Year, HELP!

Client of mine is looking to renew for a multi year contract with an increase but wants the YoY to include no price increases.


My ELT isn't having it and is telling me to just stick to 1 year or elect a multi year with a % increase that equals the average 3 year flat the client is looking for. (The client won't I have explained this option already).


So we are looking at this:

Option 1: Total potential revenue if flat multi year ..... > 1MM

Option 2: Total potential revenue if 1 year ...... 1/3 of 1MM + a few grand


How would you approach this? As a entrepreneur in a side business I would take option one ALL day and twice on Sunday. Can someone explain why you would take option 2?


Keeping in mind year 2 and 3 are not guarantees it makes almost no sense to me.


Thanks!


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๐Ÿ˜“ Advice
1
JdiggityR
Fire Starter
+3
Enterprise Account Executive
Whatโ€™s in it for your client? Donโ€™t worry about YOU. If you look at it from their perspective the selling may be to you ELT not the client.
Lambda
Politicker
+6
Sales Consultant
100% i am on the clients side here,

either we get a 1 year and the client is pissed because they dont get the 3 year they want and we lose year 2 and 3 revenue
or we get the 3 year commitment but at the expense of pissing off the client
or we get 0 of 3 years because they decide to not renew!
JdiggityR
Fire Starter
+3
Enterprise Account Executive
I love it when leadership canโ€™t get out of their own way.ย 
Meddic
Valued Contributor
+2
District Manager
Will they do anything else in exchange for multi year that you value? Public reference, intro to other potential clients, try a new feature, etc.
Justatitle
Politicker
+7
Senior AE
As a business the only way I could take #2 vs #1 is growth in revenue YoY if you take option 1 the value of the client remains the same and you have no chance to grow the business on a PnL sheet option 2 shows business growthย 
Lambda
Politicker
+6
Sales Consultant
So I thought that, but the thing is that year 1 is an increase from prior contract and there is a good amount of growth potential over those 3 years where we can make up the "lost" growth revenue if the salesman is at least halfway competent..... which is me so verdict is still out haha
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OldDogNewTricks , ย  harebrained , ย  LukeF ย  and 40 people voted
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