Leadership
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6 Tips for Building a Deal Desk at Your Company

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I am constantly pulled into conversations with founders and sales leaders at early to mid-stage companies who need help with “sales contracts.” Their perceived problem and ask is consistent—their company and their deal flow is growing, they’re working with clients who mark up their contracts or want to do a deal on their own paper, and they either spend some inordinately large amount of their own time trying to respond to redlines without giving away the business or spend too much money and don’t get a lot of value from sending those deals out to an attorney at an hourly rate.

When I dig into what’s actually drowning these folks’ deal flows, it usually turns out to be an issue with fairly normal aspects of getting deals signed. The reason these standard procedures are causing undue stress, though, is because of a lack of process and structured thinking around what is important to the business at its current stage and how that relates to handling a growing variety of deals.

Just recently, for example, a Head of Sales at a Series A company with less than $2M in ARR said they were doing their first big enterprise deal but the prospect was forcing the deal onto their paper—that is, insisting the deal be dictated by their standard contract which is friendly to their business—which included a $10m indemnification clause that was causing the deal to become held up. The company was using an attorney at their big firm but not making much progress so they sought an Atrium attorney specializing in commercial contracts to help out.

I first asked “What do you keep as standard on your paper and what would you accept?” to which the Head of Sales responded “$2M.” When I asked them why that was, they paused and replied “That’s what was in our MSA and my CEO says we can’t go to $10m because it would tank the business if there was an issue.”

When I continued to ask how they decided on $2M—versus $3m or $1m, for example—they admitted that they didn’t really know, but suspected that $2M was the limit of their insurance. My response was that if their first enterprise deal failed because they had some massive data breach or they brought the customer’s site down, their business will probably be tanked, whether it’s at $2M or $10M, because it will be hard to close another deal after that disaster. 

Plus, liability insurance needs to be raised when they start doing more enterprise deals anyways. It makes sense to get that taken care of early on instead of wasting time and money fighting with prospects’ procurement teams. Startups should keep in mind that early enterprise prospects are taking a bet on them and it doesn’t project much confidence to express paralyzing concern about what would happen in the event that their product fails and causes major damage to their customers’ business. 

Frankly, most lawyers aren’t going to help much with the above. They can explain how an indemnity clause works, tell you if your prospect’s clause is written unreasonably or not, and the tradeoffs about making the number higher or lower. But they can’t tell you what your business should accept if you have no founded opinion to start with.

Don’t get me wrong, this is normal and I’m not criticizing startup leaders. Most businesses are built this way. No one has the time to sit down and build a set of clear criteria for a standard deal before they start selling. More often, you get your first customer interested and you don’t care much about what the paper that deal is signed on actually looks like—you just care that they’re giving you money and your business idea is validated. You probably then go to another CEO friend or ask your investors/lawyers for a boilerplate MSA/SO from a similar SaaS company, but you rush because you just want to get the deal done. 

From there, you start growing and no one goes back to do the hard work to iron out a clean standard deal template, contract, and governing rules which can be the single most powerful tool to closing great deals once they get to the negotiation stage. The challenge, though, is doing all of this in a way that continuously adapts to the evolving capabilities and requirements of a growing business. 

Often, the best way for a growing business and sales organization to achieve this is by developing a deal desk.

 

What is a deal desk?

In short, a deal desk is a function within a business created to assess non-standard contracts. The deal desk is made up of a group of cross-functional stakeholders who evaluate sales deals that don’t comply with the company’s standard or ideal contract terms. From there, this group of stakeholders decides what the business can and cannot accept, as well as offers unique solutions to better meet the needs of the business and the customer. Deal desks balance company growth (i.e. your sales deals) with any potential legal or business risks that may be related to non-standard contracts.

While deal desk standards and requirements look different at every company, they all share some commonalities. Whether you’re an early-stage founder or leading a more established company with a growing sales organization, there will be a time in your business when you can benefit from implementing a deal desk function.

Building out a deal desk can help business leaders infuse speed, efficiency, and structure into the sales and legal process. As a result, you can see a reduction in bottlenecked sales cycles and more seamless and consistent management of complex deals.

 

Determine why you need a deal desk

Start by thinking about the benefits and solutions you’d want this function to bring to your business. Some of the common examples that lead people to implement deal desks are a lack of internal transparency that has caused one too many bad deals, disjointed processes or limited abilities to resolve open issues, unwarranted discounts being handed out, and a disorganized deal-closing process that simply takes too long. Now, this last one could be due to other factors that I also suggest you consider — like the lack of collaboration between legal and sales — before jumping to the conclusion that a deal desk is your best next move.

Before you can build out a deal desk, you also need to define what your standard deal looks like and the terms you’re willing to accept. A deal desk can’t exist without strong underlying commercial contracts and general rules around acceptable trade-offs. In fact, the fewer deals that need to go to the deal desk, the better. In theory, deals that meet a certain threshold, as well as the more strategic or advanced sales reps, should be the only ones with the opportunity to utilize the deal desk, because you should only be willing to make exceptions for large rewards. 

Below are six considerations that can further help you think about the people, processes, and relationships you need to create an effective deal desk function.

 

1. Define your thresholds

Among other considerations, there are some common thresholds that can make a compelling case for having a deal desk in your business.

Business scenarios that contribute to complex deal cycles can often be better managed through a deal desk. Examples of these include:

  • Truly enterprise deals with sophisticated buyers, high price points, multiple stakeholders, and a tough legal team on the other side
  • Products that store personally identifiable information in regulated industries
  • Tight SLA requirements, such as selling mission-critical software where 10-minutes of downtime could cause massive indemnity issues

It’s also important to look at how often your deals are on other people’s paper (OPP). This is an area that needs careful consideration. This is especially true if you’re working with large enterprises who have more leverage than you do or make requests that are often far outside your standard terms. A deal desk – as well as your legal team – can help mitigate these types of risks.

Other thresholds to look at include your typical size of deals and legal bandwidth. If you sell something that costs less than $10-30k annual recurring revenue (ARR) and still needs complex legal review, you might want to think about product-market fit, refining your sales process, or simplifying the underlying MSA/SO.

Further, if you’re selling across a wide ARR spectrum, you’ll have to educate your sales team that not all deals get the same level of scrutiny or concessions. This is especially true if your legal team has bandwidth constraints at the end of the quarter.

 

2. Define your stakeholders

From who makes up your deal desk to who has access to its services, you’ll need to define the right deal desk stakeholders for your business.

For smaller organizations, your deal desk may only be made up of one or two people — in the early days you may not even categorize it as a deal desk but something like a pricing committee, like we do at Atrium where the Head of Legal, the COO, and myself approve outlier deals with two-out-of-three voting yes. Either way, cross-functional collaboration and buy-in is key, notably in situations where there is friction across departments, such as sales and legal negotiating a deal that finance may not approve as a booking in the current quarter.

Regardless of your company size, we typically don’t recommend that your deal desk is larger than four or five people to avoid it being unwieldy. And one of the underlying principles of establishing a deal desk is to trust the people in it to make the right decision on behalf of your company.

In terms of who specifically makes up your deal desk, you’ll likely look for representatives from the main parties involved in deals: sales, finance, and legal. In larger companies, product management leadership might play a role, especially if you are often seeing requests for contractual obligations to build certain features, uptime/response SLA demands, or other requests of a technical nature.

And remember the fewer people who use the deal desk, the better. Part of defining the stakeholders also includes figuring out which sales reps have access to the deal desk. This means putting guidelines, tiering, and training in place for good sales adoption vs abuse of a new resource.

 

3. Define the submission process—and the output

Once you have the right people in place to make up the deal desk, it’s time to determine the right processes and criteria for submitting to the deal desk. The AE or their manager for a region should submit to the deal desk once the request from a client is clear and the AE wants a resolution from the deal desk or is asking if the business can accept a certain concession.

You’ll also need to understand what kind of information your legal team will need to know with each submission and the best approach to providing them with a comprehensive briefing. Time sensitivity is always a key consideration for closing deals so it’s important to have an SLA in place for the deal desk committee to adhere to. 

This is critical to function ownership and ensures that outputs—either a decision or an inquiry for further information—are returned in fair turnaround time.

 

4. Educate deal desk members on the product and sales process

All members of a well-functioning deal desk need to fully familiarize themselves with the product and sales process, including which products and services account executives are selling to customers and the compelling points they present to customers.

It is not enough for the deal desk to only know the line items in your company’s product catalog. The deal desk should strive to get a deeper understanding of technical features, how the product functions, and even more importantly what clients want and need from your product.

 

5. Treat all members of the deal desk as part of the sales team

Developing a trusting relationship between sales and the deal desk creates a productive environment that can execute a higher volume of deals. As a business leader, it takes a conscious effort to create a culture where the sales organization respects the deal desk.

You have to show the importance of your deal desk in the sales process. This might mean inviting deal desk members to sales activities, such as annual sales kick-offs or quarterly business reviews so they can keep up on issues top-of-mind to the sales organization.

 

6. Have a clearly defined approval and escalation process

Be upfront with sales about what is important from a legal and business perspective, such as flexibility on perpetual rights for termination or whether certain products can only be sold in a package with others.

Every deal is a learning experience and sales should never go to the deal desk with product questions that have already been answered. Create a repository of canned responses which your sales team can utilize as a resource in the sales cycle. 

Legal should identify their must-have provisions, such as product features that can’t be compromised or areas of high legal risk, as well as empower sales reps with talking points on how to explain to customers why each of these provisions is necessary.

Adhering to the previously defined SLA is critical here; outputs need to be returned in a timely fashion and should be either a decision on the deal or a question requiring further information to make a decision.

 

At the end of the day,  your deal desk isn’t going to be a be-all and end-all for every long sales cycle. It can help streamline and reduce a lot of existing bottlenecks from previously inefficient processes, but it will take some time before you’re running with a well-oiled deal desk. 

However, the time you put into getting it right is well worth the investment. The deal desk function can help improve your customer relationships, increase business productivity, and ensure that you are executing deals that are beneficial to the customer and to your company.

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As VP of Revenue, Steven Boone runs Sales, Marketing and Business Development at Atrium. Prior to that, he was Head of Revenue Operations at BloomReach, running Sales Operations, Inside Sales, and GTM strategy as the company raised nearly $100m and scaled to a 50+ person sales organization. Steve has studied at UC Berkeley, School of Law and the University of Oregon.

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