Focus on a Trade, Not a DiscountSmart buyers will always ask for a better price. Unfortunately, too many sales people and business owners automatically think that reducing their price is
most effective way to respond to this request.
However, negotiating is not always about price. Although price is a factor in virtually every sale it is not usually primary or motivating factor. Everything you say and do from first contact with a prospect affects value of your product or service in their mind. That’s why I believe it is important to look at negotiating process differently in order to achieve better results.
First of all, invest time gathering information about your prospective customer, his needs, situation, and buying motives. The more information you have more prepared you will be to negotiate later in sales process. Regardless of what you sell, and to whom, information will help you negotiate more effectively. Many of my clients tell me that their customers care only about price, but upon further exploration, other issues usually arise. Uncovering key issues your customer is facing is critical to your negotiating success.
The second most important step is to establish value of your product or service to your customer. Positioning is an important factor and will affect price your customer is willing to pay. What pain does your product or service eliminate? How does it solve a problem they are experiencing? How do your products and service differ from your competitors? Most of my clients sell premium products at a premium price. In exchange, their customers receive better than average service, faster response times, or higher quality products. What is your leverage and how can you use it to increase value of what you sell?
You have executed above steps but price is still an issue for your customer. What do you do now? Instead of conceding to their request and giving them a discount, focus on creating a trade. This means you should ask for something in exchange for making a concession. What can you trade or ask for? Almost anything!
A longer contract, a bigger order, more add-on items, an introduction to another key decision-maker in company, access to their mailing list or client database, or payment terms. You can negotiate for products and services that other person or company offers such as consulting, office equipment, computers, furniture, business services, etc. I once worked for an electronics company and my boss offered a big-screen as payment for services to a potential vendor. I was shocked when vendor eagerly accepted because I always had impression that business people focused strictly on cash.
