Have you ever been asked to lower your price? I know; a silly question. Of course you have!
How do your respond to this question? Do you take it at face value? Or do you recognize that you are being tested and that every buyer wants to feel like they got a deal?
So what do you do? Do you lower your price rather than negotiate. Many salespeople are afraid to stand by their price structure because of a single mistaken assumption: “If I refuse to negotiate my price, I’ll lose all my customers.” The reality is just the opposite. If you aren’t prepared to defend your price, your customers will lose respect for you.
Here are three ideas that will help you to negotiate the price you deserve:
Number One: How to deal with three typical buyer tactics.
1. The buyer says, “Your price is what!” and they start choking. Your response: Silence. They just wanted to see if they could get a reaction out of you. Don’t react. It’s a test. Be persistent. Repeat your price.
2. The buyer tells you, “You have to do better!” or “I can get it for less.” Your response:
a. Sell your unique qualifications. 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. Remember my story of the competitor who offered to speak for nothing. Just because the buyer has a potential vendor with a lower price doesn’t mean that they want that vendor.
b. Tie a string. Offer to reduce your price only in return for additional volume, or a commitment to purchase other products at full price.
The buyer cry, “All I have in my budget is…” or “All we can afford is…” Your response:
a. Don’t budge. Call their bluff. They may be testing to see how firm your price is.
b. Ask, “Are there any other budgets you can draw from?” Their budget for your product or service may not be the only one available to them.
Number Two: How to justify your price.
Once you have decided on your price, you must provide reasonable justification so your buyer will say, “Okay, that makes sense. I can accept that.” Here is your justification:
a. Give your price legitimacy: “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. And remember you are entitled to a reasonable compensation.
b. Focus on the value of your product or service, not on the price. Buyers will pay for value. Describe the benefits your service will provide the buyer.
c. Educate your prospects. Many of your prospects don’t have experience or know how to buy your service in your industry. The only thing they know how to ask is: “what is the price”. Instead teach them the “nine things to think about before hiring your (fill in your professional service).” This will give you the chance to educate your prospect and at the same time differentiate yourself from your competition.
Number Three: When to negotiate your price.
Obviously, there are exceptions. You want to leave yourself the option of negotiating a lower price if it is in your best interest to do so. The operative principle here is called “saving face.” In other words, you will lower your price only if you can save face, i.e., maintain the integrity of your basic pricing structure. So you tell your customer, “I accept a lower price only under the following circumstances …”
What are those circumstances?
You might consider offering a discount if the customer will buy more than one, or if the merchandise is flawed. I recently gave a workshop at a reduced fee for a client who agreed to book 3 months of post workshop training. In exchange for some additional work I gave a preferred package price.
The major obstacle that prevents salespeople from receiving the price they want is the fear of rejection. One way of dealing with this fear is to lower your price. A better way is to overcome your fear by schooling yourself in assertive negotiation techniques. When you do it right, both you and your customer will feel a sense of satisfaction. Ultimately, your belief in yourself and your product or service will be your best weapon. Your confidence will be rewarded