Prepare to NOT Lower Your Price
Best practices sales reps can use for negotiating with clients.
Tired of customers asking you to lower your price? Don’t be. They are supposed to, but only if they are smart buyers. Below are five things that “smart buyers” do to make sure they are getting the absolute best price from you:
1. Prepare: These days it’s easier than ever to find out what other people have paid for your product/service. Savvy buyers often do a ton of homework on pricing long before they even take your meeting. If they know what others have paid for your solution, they now have a starting point for their negotiation. This means each time you heavily discount your price to one buyer, you may be hurting your chances of making a good margin on future deals.
2. Always ask you to lower your price: Professional buyers are trained to ask you for a discount five times. The good news for them is that most salespeople buckle after the first attempt. The rest usually fall after the second. But here’s the good news for you – you don’t have to be THAT salesperson. The key to great negotiation is preparation and reluctance. First, you know you are going to get asked for a discount, so don’t seem so shocked when it hits. Prepare what you will say the next time you hear it.
For example, you might reluctantly respond with, “I would be able to match that price but the solution would be without the _______ and the ________. But without those features, you won’t be able to _______.”
By lowering the price, they understand that they are not getting the same value. The lesson? Never give the same value and lower your price.
Or perhaps you respond with this, “I am unable to match the price, but I would be willing to provide ______. But to provide that, I will need ________.”
See what happened here. They asked for a lower price (like they should), you provided something of value other than the price, and then asked for something in return. Often, buyers won’t want to give that something in return and will just stick with the original price. But if they take it, you are still happy because you gave, but received something of value back.
3. Always ask for something: Buyers are taught that if they ask a salesperson to lower their price several times and the salesperson doesn’t budge, that price is probably their lowest price. But that doesn’t mean they are supposed to stop there. Smart buyers will make a list of other things in lieu of a lower price that they can get that will sweeten the deal. Examples of this may be better terms, more training, a longer warranty, etc. As a salesperson, be prepared with a list of things you can give them that they find value in, but that won’t cost the company much money. By giving a little, the customer often feels like they won, and you walk away with a purchase order having not lowered your price.
4. Ask the right person: One of the biggest mistakes a salesperson can make is to say, “I need to check with my manager about lowering the price.” By saying this, it tells the buyer they are negotiating with the wrong person. When you make a sales call (either live or on the phone) don’t forget that you are representing the company. You need to be the authority in the eyes of that customer. Assume every buyer is going to ask you to lower your price and discuss how to handle that with your manager long before you make the sales call. This little bit of preparation will allow you to be your own company’s decision-maker, and in the process, you will gain or retain the respect of the buyer.
5. Be willing to walk: Buyers know that there are many companies that want their business. This gives them leverage over most sellers. They are taught that even if they like your price, they should be in no rush to say yes to you. They need to make you feel like they are going to walk away. And by letting you “stew” a little, there is a good chance you will proactively come back with a better deal. As salespeople, our body language and words need to project the same thing to them. If they sense you aren’t desperate for the sale, they will often skip the negotiation game and place the order.
So this week, be prepared to hear, “Is that your best price?” But then be even more prepared with pre-planned responses and behavior that will increase margins and set you up for your best sales year ever!
As Founder of PRECISE Selling, Brian Sullivan, CSP helps improve sales, customer service, negotiations, leadership, and presentation skills through seminars and Internet training programs. Go to youtube.com/c/BrianSullivanPRECISE and subscribe for weekly video tips that will help you become your company’s Top Sales Performer.
Photo credit: istockphoto.com/KittisakJirasittichai