My husband loves to negotiate. So much so that whenever I need to buy new running shoes, he always buys a pair, too, with the hopes that he can swing a “”deal”” with the store by buying two pairs at once. Of course, he never gets a discount, but what I find fascinating is the number of times he asks for
a discount, doesn’t get it, and still buys the item at full price anyway.
I started thinking about this from the seller’s perspective, by analyzing my own negotiation techniques, and those of my clients. The questions I wanted to answer were: Exactly what makes a successful negotiator? And what do they do differently from the rest of us to get the price they want, while still leaving their customers feeling that they’re getting a good deal?
The following simple five-step process can help 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 1: Get into the right frame of mind
The first thing you have to do when negotiating is make sure you’re in the right frame of mind. Do you really believe that your products or services are worth the price you’re charging? If the answer is no, then you won’t be able to negotiate successfully. Period.
If you implement the next four steps of this plan, I can guarantee that those readers who truly believe that their products are worth the price they charge will walk away with more deals at full price. Those of you who think your products are too expensive, on the other hand, will continue to sell at a discount.
These steps aren’t necessarily easy, and in fact may take some discipline to implement. But for those of you who are willing to put in the effort, I promise that they will help make negotiation easier, and more natural.
Step 2: Hold firm
Sales experts suggest that sales people in the top 20 per cent of their fields never cave in on the first round. So don’t give in to what your prospect is asking for right away. Remember, to those who love it, negotiation is a game. It’s the “”art of the deal.”” And to make those people happy, you must be willing to play.
Nothing frustrates negotiators more than a sales person who caves in and drops their price on the first round. If a client asks for a 20 per cent discount and you immediately say yes, they walk away feeling two things:
The price must have been inflated to start with; and I should have asked for bigger discount. Next time, I will!
Neither of these outcomes is good for you. So the next time your prospect asks for a reduction in price, instead of just giving in, try responding with one of the following instead:
I can appreciate you’re looking for the best deal, but I can tell you that we’ve already given you our best price.
You’re smart to be looking for the best deal, but our pricing is always competitive, and I just can’t go any lower.
A discount? (in a surprised tone)
This is the stage of negotiation during which your belief system is challenged. In order to be successful, you really need to believe that you are already giving your prospect a great price. When I was selling for London Life years ago, I was once approached by client who wanted a 10% discount on his group health benefit plan. I was so shocked by his request – nobody had ever asked for a discount before, and I knew that we had the least expensive plan he was looking at – that all I could say was, “”huh?”” Not very professional, I admit. But he responded with “”well, I just had to ask anyway…”” and then paid full price for the plan.
Typically, 40 per cent of all customers will respond the same way, with either “”I had to ask”” or “”I just thought I’d try.”” Unfortunately, over 50 per cent of sales people cave in on the first try, and give the client the discount they’re asking for. This is lose-lose for everyone. Your company reduces its profit. You reduce your commission. And your customer walks away dissatisfied because you refused to play the game.
Learn how to hold firm, and practice your responses in advance.
Find out steps 3, 4 and 5 in next weeks CDN This Week newsletter.
Colleen Francis is a certified sales professional advisor. You can catch her on the Web at www.engageselling.com.