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1.  TO BE IN A NEGOTIATION, YOU HAVE TO START ONE!

Too many sales people in this market are focusing only on price.  A prospect says “you have to drop your price,” and they are on the phone with their sales managers saying, “we have to drop our price or we’ll lose the order.”  Stating a price is an opening gambit.  It is a starting point where you can set the range.  Let them state their price FIRST!  Then you know that the range you are negotiating in is their stated (or wish) price, and the price that you want to sell it at.  Go into any discussion with a prospect assuming that a negotiation will happen – you just have to start it.

2.   DON’T ASSUME THAT YOU HAVE TO MEET THE PROSPECT’S EXACT DEMANDS

They know how to negotiate as well – and stating a demand up front is a tactic that too many sales people fall for.   They will tell you that you’re too high.   Or they’ll say “that isn’t in the budget,” or they’ll inform you that your competitor is quoting a lesser price. If you take that information as gospel, they have one.  These are statements made by buyers in every industry – irrespective of what’s going on or how the market is.  It’s an opening gambit in the negotiation that you need to prepare for.

3.   MAKE IT ABOUT PRICE – AND YOU’LL ALWAYS BE TALKING ABOUT PRICE.

Starting a discussion with pricing sets a sales person up to give in because it sets up the buyer to misperceive your intent as defending a price that is too costly.  Even if the buyer starts there, you need to set that issue aside, and focus on other key aspects of your potentially doing business together. If your sales presentation revolves around the future and current challenges facing your customers, then the solutions you have to offer can be perceived as an investment in solving their problems

4.   HELP THE PROSPECT TRANSLATE THEIR NEED FOR A LOWER PRICE

Know both the tangible and intangible benefits of your product/service.  When the prospect talks about price, translate the benefits into actual cost savings for the customer. This requires that you really understand the customer’s point of view, which is most effectively done by engaging them in a conversation about tangible needs.  Really what you want to know is are they trying to lower price – or actually reduce costs?  It’s a good question to ask – and a great way to engage them at a different level than just “cut your price.”  What are you looking for?  To save the most amount of money, or just to cut price by 10%?

5.   MAKE SURE YOU FIND THE BUYER’S RANGE TO SET UP THE NEGOTIATION CORRECTLY

You need to find out what is the highest price they are willing to pay – they will always start with the wish price.  If you assume that’s their ONLY price – they’ve won.  Even if they tell you that’s the only price – it often isn’t the case.  Their saying so is a negotiating technique.  Here is the range you need to find out about:  the “Wish Price” – the price they hope you’ll sell it to them for, and their “Walk-Away Price” – the highest price they are willing to pay before walking away from the negotiation.  Once you know these two numbers, you can adjust them based on what your own numbers would be.  This is the most important part of the negotiation.  Without a range, there is nothing to talk about.

By Lisa D. Dennis

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