Everyone negotiates – sometime, somewhere, somehow.
From telling the kids, “After you eat your dinner, then you can go play” to the highest business deal out there. Negotiation is real. And many times, done without knowing it. Those that have a few tips in their back pocket when negotiating have a better chance to move the ball into their court. Here are a few tips from our back pocket. Enjoy and share.
When negotiating price, never discount the price right off the bat. Often a price cut will get the salesperson more excited than the prospect. You may think going in with a lower price will make the prospect grateful and give you an easy ‘go’ right away. It usually won’t. If they take your offer of the lower price, that indicates they might have taken it at the rate card price which is where you SHOULD be quoting from the beginning.
When you talk price, be strong and confident. A weak or hesitant delivery makes the salesperson sound soft. Then the price sounds soft and thereby invites a lower offer.
Delay giving concessions until the end of the conversation. A concession given too early is just a ‘giveaway.’ Save it for closing the sale by saying, “That’s an interesting point. Let’s come back to that in a moment.”
When there is a request for a price concession, have a soft way to reject it. Hard rejections only frustrate people. Just because they have dealt with other weak salespeople doesn’t mean you need to be that way. An effective method is: “I wish we could; however, that’s not an option we have” technique. Or you can say, “Since you only have $4,000 and the project is $5,500, let’s work to make the package within your price range.” Then proceed to remove something.
Never underestimate your strength in a negotiating situation. Some prospects assume a salesperson is in the position of weakness. If you fall for that, it will weaken your resolve and soften your backbone. Understand this: If the prospect is bargaining with you, or even discussing the proposal with you, that’s an indicator of interest; a buying sign. Their actions are telling you, without saying it outright, you have something they need or want.
When do negotiations begin? When you say “hello.” Negotiations, in general, are ongoing all day long at work and at home. And it’s often a subtle thing. Recognizing you’re constantly involved in negotiation gives you an advantage. Be aware that life itself is a series of negotiating situations. You are often negotiating without realizing it.
Avoid giving up ‘because they’re a nice person.’ The principle is this: The salesperson thinks that if they’re nice and give a price concession to the other side, the other side will reciprocate with a concession back to you. In other words, they’ll buy. Nice idea. Only it backfires with a professional buyer. What they do is take what you offer and try to get more. (After all, you’re giving things away.)
When you give – remember to GET. When you do give a price concession, use the awesome ‘if/then’ technique BEFOREHAND so you get something in return. “Mr. Jones, if I can get you the widgets at that price, then do we have a deal? Or “Mr. Jones, if I can give you that price, can I get a referral from you?” Get SOMETHING out of it. A YES makes you the winner.
There are dozens of other “gets” when you give. Most salespeople don’t mind giving when they are getting something in return.
But perhaps the most important reason to take something back when you give a concession is this: It puts a ‘price’ on your concession. No longer are concession requests free. By asking for something in return, it keeps you from getting additional requests for concessions.
Why is it important to be a good negotiator?
Because a bad negotiator leaks dollars and reduces the all-important profit to the company. Profit is what’s needed to run a company. No profit, no company.
A closing suggestion: “Whenever you can, substitute the word ‘investment’ for the word ‘price.’ In most cases, the prospect is making an investment, in your product.
Nancy Friedman, customer service keynote speaker, is president of Telephone Doctor Customer Service Training and a featured speaker at franchise, association, and corporate meetings around the world. A popular TV guest, she appeared on Oprah, The Today Show, CNN, FOX News, Good Morning America and CBS This Morning, as well as hundreds of other radio, television and print outlets around the world, including the Wall Street Journal, and USA Today. The author of 9 books on her chosen topics, Nancy helps corporate America improve their communications with their customers & co-workers. You can see her 9 books here. For more information, log on to Nancy Friedman's website www.nancyfriedman.com or call (314) 291-1012. Oh yeah you can email her at email@example.com. Nancy is a recent recipient of the Lifetime Achievement Hall of Fame Award - St. Louis Small Business Monthly