Mastering the Art of Strategic Negotiation in Customer Success

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In this episode of the Customer Success Pro Podcast, Anika Zubair emphasizes the importance of negotiation skills for customer success managers (CSMs). She discusses how CSMs often overlook their negotiation role, leading to missed opportunities for renewals and upsells. Anika outlines common mistakes CSMs make during negotiations, such as lack of preparation, over-explaining, and avoiding directness. She introduces a four-step framework for strategic negotiation, focusing on preparation, leading with a clear starting point, framing around value, and using silence effectively. The episode aims to empower CSMs to become confident negotiators and strategic partners in their customer relationships.

Chapters:
00:00 The Power of Negotiation in Customer Success
15:43 Common Mistakes in Negotiation
27:53 Framework for Strategic Negotiation

Connect with Anika Zubair:
Website: https://thecustomersuccesspro.com/
LinkedIn:  https://www.linkedin.com/in/anikazubair/
CSM RevUP Academy: https://thecustomersuccesspro.com/revup

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Podcast Editor: https://podcastmagician.com/

Chapters

• 0:00 The Power of Negotiation in Customer Success
• 15:43 Common Mistakes in Negotiation
• 27:53 Framework for Strategic Negotiation

Transcript

Anika Zubair (00:00.726)
What if I told you that the key to driving more renewals, landing more upsells, and building executive trust all comes down to one skill? And that one skill is negotiation. And no, I don't mean closing a million dollar deal like a sales rep. I mean strategic negotiation as a customer success pro. Whether you're balancing customer value, internal pressure, or long-term partnership goals,

Today, we are going to dive into the underrated art of negotiation in customer success. Because let's be honest, if you can't influence or persuade and position your value, you'll always feel like you're begging for renewals and hoping for expansions rather than predicting them. So let's change that. Hello, everyone. I'm your host, Anika Zuber, and welcome to the Customer Success Pro Podcast, your go-to space for real talk.

expert advice and actionable insights in the world of customer success. I'm a CS executive leader, award-winning strategist, CS coach and customer success fanatic. I help CSMs and CS leaders build the skills and the confidence to become revenue driving pros and scale world-class CS teams. So whether you're brand new to CS or a seasoned leader, this podcast is here to support your growth. Because customer success isn't a destination.

It's a journey, and I'm here to be your guide and navigate every step of your journey. So join me every Wednesday where you'll get fresh CS tips, tricks, and strategies you can actually use. Some weeks I'll share my own insights and best practices from working in CS over the last 13 years. And once a month, I'll bring on expert guests to dive into the most relevant and pressing topics in customer success today.

So if you're ready to level up, hit subscribe on Apple Podcasts, Spotify, or wherever you tune in. And let's make your CS journey a little bit easier together.

Anika Zubair (02:08.537)
So let's get real for a second. CSMs negotiate all the time. Please don't shortchange yourself and believe that negotiation is only for your sales counterparts. CSMs, I think, actually negotiate way more than salespeople do. I know I'm going to get a lot of hate for saying that, but it's true. We negotiate all the time. But you know what no one does? No one teaches us how to actually do it. Just think about it.

We're negotiating timelines when customers are delaying onboarding, for example. Or maybe we're negotiating stakeholder engagement when your champion goes quiet. Or we're maybe negotiating pricing. This happens more often than not, and we're having a very tough conversation with our customers who are trying to push back on a discount request. And then we do even more negotiation internally, either with the sales team, the product team, the marketing team.

We are always negotiating, yet most of us feel super uncomfortable and unprepared, or even worse, we like to be too nice to actually push back. And that's what leads to one of the biggest missed opportunities in customer success. And that is letting your customer dictate the terms of success instead of co-creating and co-negotiating with them. If you've ever worked in sales,

you will know that negotiation is an art form. It is something that is learned over time. It is a skill that is practiced and developed. And here's the thing, most of us in customer success actually have not practiced this skill and we hope that we get better at it with more and more customers that we have and that we work with. Yes, of course, the more customers you work with, the better you're going to get at negotiating. But believe it or not, your sales counterpart are actually getting tons of negotiation.

and training skills. And this has all come down to coaching. And the way I coach everyone around negotiation is it's something that needs to be practiced. It's something that needs to be learned. And it's a skill that you need to actually master. And that is what we're going to be covering in today's podcast. Now, if you don't master the art of negotiation, you're going to constantly be undervalued as a customer success pro. You're going to lose expansion opportunities and you're going to actually lose trust.

Anika Zubair (04:29.46)
and your ability to influence your customers over time. Let's break down the top mistakes that I see over and over again when it comes to negotiation in customer success. First thing that I see over and over again is that people go into negotiation conversations without a plan. Listen, I have been in sales. I was actually a sales development rep first and then a sales rep.

or an inside sales rep. The names have changed over time, but I have actually worked in sales, both in tech and outside of tech. And the best tip I have been given when I was working in sales is when you go into any tough conversation with your customers or prospects, you want to go in with a plan. But what I'm going to say you have to do in customer success is you can't just go in with a plan. The best negotiation happens when you have plan A,

B and C. And what I mean by that is you never walk into a QBR blind, but many CSNs enter a renewal or a tough conversation with very little prep. And if you have actually prepped for these conversations, I find that everyone thinks that going in with one plan is going to lead to the outcome you are looking for. And I hate to be the bearer of bad news, but actually going in with just one plan is going to lead

you to not get the renewal, not get the upsell, and probably go into a churn mitigation conversation. Because if you want to be leading a negotiation, if you want to master the art of negotiation, have not one, not two, but three different plans for every single customer conversation you're going into. Now that sounds like a lot of prep, and don't get me wrong, it can feel like that.

But the way to actually master the art of negotiation is to be prepared for your customer to say no, or for your customer to give you a counter offer, or for your customer to say, hey, that might work for us in a few months time. When you start to prepare for those sorts of eventualities with your customers, that is when you are going to lead the negotiation rather than being followed in it. Just have a think. The last time you spoke into a customer, did you actually do enough prep with a

Anika Zubair (06:49.232)
Plan B, C, and D with that customer, or did you just prepare to have a conversation about a renewal and then go in with just maybe pricing? Well, you should have Plan B and C prepared so that you feel more in control of that negotiation and conversation with your customer. So the number one thing I see again is that most CS pros think that because you've earned trust with a customer,

they're not gonna negotiate tough or they're not gonna come up with other negotiation strategies with you. Customers negotiate every single day with us, so the best way that you can be ready for that conversation is making sure that you have a plan B or C as well. Now, the second thing that I see over and over again is customer success managers love over explaining or apologizing. I don't know what it is about the psyche of CS pros, but

We like to justify every single thing that we do with a customer. And I'm here to remind you as your CS bestie, you don't need to justify your ask with 10 bullet points or data points or anything like that. That signals insecurity. Strong negotiators speak with confidence and clarity. Of course, come with data or come with any information that helps you feel confident.

But when you list either a price increase or a renewal contract or even an upsell opportunity to your customers, speak with confidence and clarity and don't come in with 10 slides justifying why the value is there. If they see the value, they will naturally want to open the conversation up for the upsell and the renewal and whatever else you are negotiating. But what I see happen time and time again is CS pros tend to think, okay,

I'm going to go in and start the negotiation and give you 10 bullet points or 10 slides of everything that needs to be reiterated and reinforced. But what happens when you start to put that much information in front of your customers, you start justifying the upsell or you start justifying the renewal. And that just shows insecurity. The strongest negotiators have a plan. They lay that plan out. They show maybe some data that's behind that plan, but then they let

Anika Zubair (09:05.819)
customer absorb it all. They don't keep going with more and more and more and more. And they're definitely not apologizing for the increase in price or the additional seats or sales. Again, you are not here to be your customer's best friend. I talked about this in a previous podcast episode, but as their trusted advisor, as someone that is helping guide them to better business decisions, you need to show them

that moving to an upsell or moving to a renewal conversation is in their best interest. Now, if you show them in a negotiation conversation that it's in their best interest, and then you start to bring up all these bullet points and all these additional value add to the conversation, they're going to be questioning, well, if they're saying that it's such a value add to my business and that this makes sense, why are they justifying everything? Why are they adding so much more fluff and data into the conversation?

So really what I'm trying to say here is you don't need to justify everything that you're doing and you don't need to apologize if there is a price increase. Okay, now the third thing that I see time and time again is that CS pros like to avoid the real issue. I don't know if it's because we're people pleasers or because we're just trying to do the best for our customers, but I see CS pros often sugarcoat everything.

We hint at risk, we circle around misalignment, but we rarely say directly what needs to be said. Strategic negotiation requires directness. Now, I'm not saying be rude. There's a very big difference between being rude and being direct. But if you are negotiating with your customers and you are talking about a renewal or you're talking about a potential upsell with this client, just be direct, get to the point.

Remember, you're dealing with executives and executives have very little time. And if they are joining you on a call or a conversation about a renewal, they want to know the pricing. They want to know what the value they are getting. They want to know everything as quickly and as easily and as succinctly as possible. So don't fear getting to the point. A lot of times I see customer success pros build this beautiful pitch deck or beautiful deck in general. We love building decks, by the way.

Anika Zubair (11:24.005)
But I see CS pros do this and they build these decks where there's so many slides about the value, the direction of where the product is going, the direction of where their customer's company is going. And then they wait until the very end of that slide deck to bring up the renewal or to bring up a negotiation about an upsell. Whatever it is, they wait until the very end. I'm not saying be rude and just only talk about the renewal in that conversation.

but bring it up at the very top of the call, I would actually say, hey, we're gonna cover your renewal today. And I know that there is a price increase that we're gonna talk about as well. And I'm going to get to that price increase, but I just wanted to give you a heads up that that is exactly what this call is going to cover. Again, direct, not rude, and letting them know that you are in the driver's seat of that strategic negotiation. All right, another thing that I see time and time again, and this is something that I

think we do because we're having this internal conversation in our head of people pleasing, but I see CS pros negotiate against themselves way too much. Stop negotiating against yourself. We have so much negotiating to do in customer success, let's stop doing it with ourselves. But have you ever offered a discount or a workaround before the customer even asked? Listen, I've been guilty of it. I've done it early on in my career where

I've gone into customer negotiations with a discount because I thought, my gosh, the usage is low or this customer really isn't as engaged as they were before. So the best way I'm gonna go into this call is I'm gonna offer a discount right away. Or I see that they're struggling with this API or this integration, so I'm gonna offer a workaround right away. That is you negotiating against your own value. Now I'm not saying don't offer,

a discount or don't offer a workaround, please use those to your advantage because those are skills in negotiation that you should be using. But please let's not lead the conversation with those topics because when you lead with those topics, what you're doing is lessening your value right off the bat and your customer is realizing right from the beginning of that conversation, she's not really that strong of a negotiator. So if she's actually already reducing the price in the very start of the conversation,

Anika Zubair (13:51.291)
Does she even actually value the product or service or is she just giving me discounts? So if that's the case, your customer is going to know that the tone of this conversation is to get a discount or to get a workaround. And if that's the way a conversation starts, you best believe that by the end of the conversation or by the renewal contract, they are going to negotiate way harder and gonna get an even bigger discount because guess what? You started the conversation in that way. All right, one other thing I'm gonna call out is that CS

when negotiating, they fail to identify any mutual goals. Negotiation isn't about winning, by the way. I think a lot of people mislead negotiation as like, I'm a strong negotiator because I win all the time. Negotiation or the arch of negotiating is actually all about aligning outcomes. And too many CS pros skip that step.

They are so focused on, need to land the renewal or I need to land this upsell or I need to make sure I hit my revenue target. And they almost out negotiate themselves because they're trying to win the renewal or they're trying to win an upsell. But I'm sorry to say that's not gonna work for you unless you actually align outcomes to your customer's needs. When you actually negotiate, it's not about winning. It's about making sure your customer's outcomes are directly tied

to an upsell or to a renewal. And when you're able to do that, that's when you're able to really unlock the true art of negotiation. Okay, listen, I've talked about tons of ways that CS pros might be stumbling across the art of the negotiation in customer conversation. But now I wanna tell you there is a way to fix this. As always, I like to share frameworks and strategies that I've personally put to use and I've seen success with. So that is exactly what we're gonna jump into in this podcast.

So I have a four step framework that I teach inside of RevUp Academy to help CS pros become confident negotiators. And that's exactly what I wanna share with you today. First of all, as I said earlier, you need to prepare. A lot of CS pros are not preparing. So my first tip to you is to make sure you prepare a plan B and a plan C before entering any negotiation. You wanna be clear on what your fallback options are

Anika Zubair (16:12.719)
and what you'll do if the agreement doesn't go through. This is really called the best alternative method. So basically it means that if you're going in and you're gonna negotiate a renewal and it's in price increase and your customer is gonna say that's too much or that's out of our budget, what is your plan B? What are you planning to do when your customer tells you that it's gonna be too much? Because what I see time and time again is CS pros, they know

the customer is probably going to say that this is way too much or out of their budget. And then they don't know what to do next. They almost freeze in that conversation. Have you ever been guilty of that? I know I have. And that's where you have to just basically come up with your plan B and your plan C. Now, maybe your plan B or plan C is reducing scope or reducing the number of license or looping in another stakeholder or pushing the renewal to next quarter. Whatever it is,

Knowing your Plan B gives you confidence and clarity and leverage in the conversation. And that is where the art of negotiation really comes in. It's the leverage in the conversation. It's not winning. It's not coming up with the best price for your customer or the biggest discount. It's leverage. You need to understand what your customer's leverage is. when you understand that, you are able to then go into Plan B or Plan C or whatever other alternative plan you've built out for them.

Hey, CS pros, have you been doing everything your customer tells you to do as a CSM, like holding regular check-ins, updating QBR decks, chasing usage data, and you're still wondering why you're not hitting your revenue goals? Well, guess what? You're not alone. Most CSMs are stuck reacting to problems, chasing value after the fact, and hoping their customers are going to renew instead of knowing they will. Now imagine this.

What if you could walk into every single customer conversation knowing exactly how to show value? What if you had a clear, repeatable strategy to build relationships that unlock expansion, map success plans to real outcomes, and upsell without ever feeling like a salesperson? That's exactly what I'm teaching in my free masterclass on July 10th. The Customer Success Revenue Framework, the three steps that show value to your customers is back.

Anika Zubair (18:34.607)
And it's a one hour, zero fluff, pure strategy masterclass where you're not only going to get all the tactical tips and tricks, but I will be doing it live so I can answer any and all of your revenue questions. Now this masterclass only happens a few times a year and it always fills up fast. But because you're a podcast listener, you're going to get access first. It's a totally free masterclass happening on July 10th.

And to register, all you have to do is go to thecustomersuccesspro.com forward slash masterclass to grab your spot. Go to thecustomersuccesspro.com forward slash masterclass to grab your spot. Go and register today and stop feeling overwhelmed as a CS Pro. Seats are gonna fill up fast and they're limited, so I'll see you there. Now back to the episode.

Okay, the second point in my four part framework is you need to lead with a clear starting point. So, like I said earlier, a lot of times in negotiation, in order to be strategic and a strong negotiator, you need to lead the conversation. So instead of waiting for the customer to define the conversation, I need you to take the lead by establishing a clear starting point, whether that's around pricing.

Timelines deliverables this will help you frame the discretion in a way that reflects your strategy and value rather than playing defense when you take initiative early you're gonna be able to shape the direction and tone of the entire Negotiation and that is what is so important by the way every conversation that you have in life by the way But especially when it's at work or with customers there is always a leader to that conversation

Now, the leader isn't always the loudest person in the room or the strongest speaker. The leader is actually someone who's able to take control of the conversation. And that is exactly what you need to do as a CS pro. Remember, as Customer Success Pros, we're almost mini CEOs of our books of business, and you need to take control of this account in your book of business and this conversation. Now remember what I said earlier, taking control doesn't mean being a bully or being rude.

Anika Zubair (20:52.613)
What I mean by taking control is making sure you know where the direction of the conversation is going to lead. And that's why I said having those plan Bs and plan Cs are so important because you need to understand where the conversation is going and the direction and tone of the conversation. So as I said earlier, when you are speaking to your customers and it is a negotiation, whether it's a renewal or an upsell, I want you to lead the start of the conversation by letting them know what it is you're talking about and what it is you guys are gonna.

So for example, at the top of a conversation, you're going to say, well, today we are talking about renewals and the price increase of that renewal. But first I want to jump into some value that you've gotten over time. And then we'll jump into the pricing and the licenses later. When you start a conversation with that, your customer knows what to expect. They know that you're taking control of the topic and they know that you are negotiating the price at some point in this conversation.

That is taking control and I want you to feel more empowered to do that. Because not only will you thank yourself when you take control in that way, your customer will actually thank you because again, you are being the leader in that conversation. Okay, the third step in this framework is to make sure you are framing around value and not price. I want you to shift your talk track or the way you're speaking to your customers from this is our price,

to this is the value you're getting. You wanna use outcomes, metrics, and customer impact to support your ask. Please do not use the word price. I know it's natural and super easy to use the word price because that's what it is, right? We are changing pricing or we're increasing pricing or this is the renewal price. But when you change the framework or your mindset to say this is the value you're getting and this is what we're going to be increasing to because of the value you are getting,

they suddenly see it as outcome driven and rather than price driven. And that is where negotiation in customer success is so different. We're not talking about price. When you start saying the word price, everyone starts thinking, ew, sales. Because it is. Sales use that terminology. Salespeople are always talking about price. And when a customer is negotiating with a salesperson, they know to talk about price. That's almost the natural state of the way sales handle negotiations.

Anika Zubair (23:15.823)
But like I said, this podcast is not about the art of negotiation for sales. It's about the art of negotiation for customer success pros. And we know that customers care about value. So I want you to shift your language to saying, this is the value you're getting, and this is why we are increasing in licenses, or we're actually going to renew earlier, or whatever it is that you're trying to do on that call. Make sure you're always leading with value and outcomes.

because that is going to land the upsell for you. Okay, this last tip in my framework is something that I see happens very rarely, but it's super, super powerful. Are you ready? I want you to take note of this. I want you to use silence and pause tactically. I'm pausing for effect here, but I think CS Pros are not pausing enough. For some reason,

Customer success pros have it in their head that we have to know everything and the all-knowing person has to speak all the time. But believe it or not, when you pause, when you give your customers a chance to absorb either the renewal price or the upsell price or the package that you're trying to move them into, it allows your customer to actually think about it. Silence is super powerful. And after making your point or your ask,

I want you to stop talking. Let the customer sit with it. What happens is most people negotiate themselves down in silence. You'll see it happen time and time again. I bet you you're probably doing it already. Is you list a price or you say this is the renewal contract and then you keep talking. You don't let your customer just absorb what's happening. Let them absorb it. Take a moment.

and then ask if they have any questions or any clarity is needed in regards to this renewal conversation. You do not have to start talking immediately. Give yourself a break. Let them see the value in everything you've just delivered. Okay, I want to share with you a story from the early days of when I was a customer success leader. We had a customer asking for a massive discount right before the renewal. And my CSM that was working on it was super nervous. They were just

Anika Zubair (25:37.133)
unsure about how to handle this sort of conversation. And to be fair to her, it was her first time handling a discount right before renewal. They were afraid of pushing back and losing the account. So I stepped in, but instead of saying no, I reframed the conversation and I asked, can you help me understand what's changed the value we've delivered that would justify this discount? And then I stayed silent. Then the customer admitted it wasn't about value. It was about

budget politics. From there, we found a solution that protected our pricing while still supporting the customer internal process. And to give you a little bit more insight, what we did is we basically give them custom billing terms so that they paid quarterly instead of annually and still got the same discount because the issue was that they couldn't actually pay the full fee upfront, again, due to budgeting constraints.

So they actually weren't looking for a discount. They were looking for better pricing terms. And if we just went in with a discount and just said, yeah, here's 20 % off of your annual, we would be leaving money on the table. So it's so, so important to ask questions even in a renewal or upsell conversation and do a little bit of discovery of why they're asking for the discount rather than just going in and giving it to them.

Okay, I've covered a lot and you know in my solo episodes, I love challenging you because I'm here to be your customer's excess revenue coach. And this week, your challenge is going to be this. I want you to identify one upcoming conversation where you're going to practice the art of strategic negotiation. It could be a QBR, it could be a renewal call, or maybe it could even be an internal call with your sales team. What I want you to do is I want you to prepare your plan B and your plan C.

Frame your ask around value and practice saying it out loud without over explaining. Remember, don't over explain, don't apologize. Remember to take pauses and allow for silences. And once you've done all of this and once you've actually gone in and had that conversation with your customer following the framework that I outlined in this podcast, I want you to send me a DM on LinkedIn and I want to hear how it went. Okay, today we covered so much.

Anika Zubair (27:53.786)
First of all, we talked about why CSMs are always negotiating, whether they realize it or not. I gave you the five most common mistakes that CS pros are making when it comes to negotiations. And then I gave you a four part framework to help you negotiate strategically. I also shared a real world example of how I was able to use value to anchor in in a tough conversation.

Now, remember, negotiation is not a conflict and it's not about winning. It's a collaboration with clarity. So you're not just a customer success pro. You are a strategic partner and I need you to own that. Now, if this episode gave you some light bulb moments, here's what I want you to do next. I want you to go and register for my master class. If this podcast was like, my gosh.

I got so much value and I want to learn even more about negotiation and customer success, then the Masterclass is going to be perfect for you. So make sure you go and register. Just go to the customer success pro dot com forward slash master class. I'll make sure to link it in the show notes until next time. Keep showing up. Keep driving value. And remember, you're not just a CS pro. You're a revenue generating expert. Can't wait to catch you next week. Bye for now.

Thanks for tuning in to the Customer Success Pro Podcast. I hope you picked up something valuable to take back to your team. If you enjoyed this episode, it would mean the world to me if you took just 10 seconds to leave a review on Apple or Spotify. It helps more CS pros like yourself discover the show. And creating new episodes takes a lot of work, so leaving a nice review keeps me motivated to keep creating. And don't forget to hit subscribe on Apple, Spotify,

YouTube or wherever you listen to podcast episodes. I drop a new episode every Wednesday packed with practical tips. And if you've got a topic you'd love for me to cover or want to be a guest on my show, send me a message. All the details are in the show notes. I'd love to hear from you. And hey, if this episode helped you share it with a fellow CSM or CS leader. Remember sharing is caring. Cheers to your CS journey and I'll catch you next week for our next episode.