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Kelley Robertson
Focus
On A Trade, Not A Discount
By Kelley Robertson
Smart buyers will always ask for a better price. Unfortunately,
too many sales people and business owners automatically think
that reducing their price is the 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 the primary
or motivating factor. Everything you say and do from the first
contact with a prospect affects the value of your product or
service in their mind. That's why I believe it is important
to look at the 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 the more prepared you will be to negotiate
later in the 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 the key issues your customer is facing is critical
to your negotiating success.
The second most important step is to establish the value of
your product or service to your customer. Positioning is an
important factor and will affect the 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 the value of what you sell?
You have executed the 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 the company, access to their
mailing list or client database, or payment terms. You can negotiate
for products and services that the 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 the vendor eagerly accepted
because I always had the impression that business people focused
strictly on cash.
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Here are a few ways you can effectively position this request.
"If I could do that price for you would you be willing to extend
the length of the contract for an additional three months?"
"If I could work that out would you be prepared to give me advertising
space?"
"The only way I could give you that is if you add one more line
of products."
"Let's put that aside for the time being. Would you be able
to give a similar amount of…in exchange for that concession?"
The key here is to think outside the box and explore other options
available to you.
I recall speaking to a prospective client about a training workshop
and was asked to make a concession that amounted to a fifteen
percent discount. I was not comfortable with this so I asked
my prospect if he would be willing to give me a comparable amount
of his product instead. He did not have the authority to make
such a decision but spoke to someone who did. My request was
eventually denied so my client conceded to my initial offer.
Another effective approach is to make the concession but take
something away from the initial offer. For example, you could
say, "I can do that. However, I will have to charge you for…"
or "I can do that. Do you want free delivery or after-hours
service taken out of the contract?"
Most people will expect you to keep all the conditions "as is"
but they will want the lower price. By demonstrating how much
the concession is worth you can reduce the effectiveness of
their request.
Finally, another strategy is to always ask for something in
return for making a concession even if you don't need it. I
have been surprised how many times I have gotten something extra
simply by asking. Plus, it often prevents the other person from
asking for an additional concession because they know you will
ask for something in return.
Remember, your ultimate goal is to give away as little as possible
in order to close the sale. Every time you discount your product
or service you discount yourself and eat away your profits. |
| From
the Forum: |
| This
was a bit weird... |
| I don't know if any
of you have experienced this before, but I put in the
keywords for my site (Freelance web designer kent) on
google and an ad I put on gumtree.com showed up in about
the 4th slot.(my actual site is nowhere to be seen on
google.co.uk at present for these keywords) ...
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| Kelley Robertson is a Senior Partner of
The Robertson Training Group and helps businesses maintain their
competitive advantage by teaching them how to increase their
sales, develop their negotiating skills, and motivate their
employees. He is also the author of the best-selling book, "Stop,
Ask & Listen. How to welcome your customers and increase your
sales." His web site is http://www.KelleyRobertson.com
and he can be reached at 905-633-7750, 1-866-694-3583 or at
RTG@cogeco.com |
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