Last week, I submitted the first two steps to take to become a successful negotiator.
The following will be the remaining three step process to help you maximize your results each time you negotiate. Even better, I find it works wonders at every stage of the sales process, from negotiating
price to discussing delivery, added product features or any other terms your prospect is looking for a break on.
Step 3: Repeat
Some clients will press ahead with their request for a discount even after you’ve given them one of the responses outlined above. The vast majority of them, however, are just looking for assurance that you really are giving them the best possible price, and there is no room to move. In other words, they want to make it a little uncomfortable for you, making sure that you sweat just a bit.
My advice in these cases is again: hold firm. Work to reassure your customer that they’re getting the best price, and remind them of all the hard work you’ve both put into the deal. Try something like:
We’ve been six months putting this project together, I would hate to see it not go ahead because we can’t settle on price; or
I knew you’d be tough, so we provided aggressive pricing up front. I would hate to see this not go ahead because we haven’t been able to meet your budget.
We find that an additional 20 per cent of all business is closed at this stage – that’s 60 per cent of all business closed without ever having to reduce your price. Unfortunately, by this point, 80 per cent of all sales people have also already caved. You do the math.
Step 4: Take their mind off the bottom line
If after all this your prospect is still pushing for a discount (and 40 per cent of them will be), then find something else to give them that doesn’t reduce your price.
Free shipping. Extra manuals or training. A client profile on your Web site. What you choose will be specific to your business, your markets and your client base. The key is to have the list of things you’re willing to offer prepared in advance, so you can draw on it during the negotiation.
It’s hard to think creatively in the heat of a negotiation, so planning ahead could give you a ready-made solution that leaves both you and the client feeling satisfied with the transaction. For a copy of the worksheet we developed to help you plan your “”no money”” concessions, just email us at email@example.com
Step 5: The last line of defense
Finally, if your client is still asking for a discount, you may have to give it to them in order to close the sale. But before you do, always ask them one of the two following questions:
“”What is important to you about an x% discount?”” OR
“”Why is an x% discount important to you?””
These questions will flush out any last details that could help you find a different way to structure the terms and pricing, which will allow you to keep your price while letting the customer walk away with their needs met as well. If, however, you ultimately do have to reduce your price, make sure to follow these two rules:
Never reduce your price without getting something in return. Getting something in exchange for a pricing concession is key to managing customer expectations that future discounts will be easily dished out. As with the “no money” concessions above, what you get in return for a price reduction will be unique to your business and markets, but could include references or case studies, a bigger order, introductions to senior level executives or cash up front. Again, whatever you ask for, prepare the list in advance so you can respond quickly and smoothly.
Get a firm verbal agreement from the customer that this discount is all they will need to get the deal done. Try asking them something like “I’m not sure if I can get you this price, but if I can, is it fair to say that we can go ahead?””
OR “I’m not sure I can get this discount for you. If I can, though, are you willing to sign the agreement this week?””
Nothing is worse than coming to an agreement on price (especially a reduced price!) only to find out that your prospect is still looking for other concessions. By asking them this last question, you can ensure you get all the issues on the table first, giving you the chance to deal with them fairly once and for all.
Colleen Francis is a certified sales professional advisor. You can catch her on the Web at www.engageselling.com.