Price negotiation can be a frightening experience for some salespeople.
They fear they will wilt under the pressure of trying to hit targets and often cave in to the demands of the customer.
Especially if the buyer has done some negotiation training themselves, they will apply pressure on price sometimes simply to get what they want while pushing your price through the floor.
So, how can you maintain the rapport and open communication with your buyer, while justifying your price?
Here are some phrases to use that will assist in getting your buyer to say ‘yes, that’s a fair price.’
1) If they question the price at any stage, and you know you are reasonably priced against your competition, say “My price is reasonable for the marketplace. This is the going price for this product or service.”
If your buyers are doing their homework, they will know you are telling the truth.
You may have to justify the price against a competitive brochure the buyer has on their desk, but you shouldn’t feel that you have to immediately discount.
2) Your customer may adopt a disbelieving stance on your price by saying something like “HOW MUCH?!”.
They just wanted to see if they could get a reaction out of you.
So, don’t react. It’s a test. Be persistent. Repeat your price and justify its position.
3) Your customer is adamant and says, “You have to do better than that!” Your initial response should be, “May I ask why?”
The fact is you have no idea at this point why you have to shift positions.
It could be simply they want to get a better deal, with no rationale other than greed or higher profit motives.
Your response should first be to sell your uniqueness.
Take the focus off of the price.
Get them to agree that yours is the one they want, and that the price is only a technicality.
If they really want yours, they will find a way to pay for it.
Just because the buyer has a potential supplier with a lower price doesn’t mean that they want that supplier.
If a price reduction is possible, offer to reduce your price only in return for additional volume, or a commitment to purchase other products at full price.
- If your buyer says “All I have in my budget is…” or “All we can afford is…” this may be true, or they may be bluffing. So, try to maintain your position. They may be testing to see how firm your price is.
At this point, you could ask “Are there any other budgets you can purchase this from?” It’s possible they have some other budget they could draw from.
It all depends, not only on the money available, but also on how desperately they want your service and how much it is worth to them.
If they’re serious about not having the budget now, but really want your solution, could you offer finance options?
Or could you get the order from them now and work with them on a finance package?
If you left it until they did have the budget available, what would be the price then?
Could they save money by buying now, hence justifying the budget restructure?
There are many way of restructuring your position instead of discounting the price.
Think about the interests of your client.
Will having your product or service actually be more beneficial in the long run (savings, increased productivity, long-term profitability, etc.) than going for a competitor’s cheaper product?
Recall our previous messages on price negotiation; if you haven’t built the value in what you’re offering in the buyer’s eyes, any price will be too high.
Resist the bid to negotiate down on price by using these phrases and you should be able to justify your position and get the best price possible.