Get to give. That is the answer to the price objection and, yet, many salespeople have never learned this fundamental lesson in Sales Negotiations 101. If the buyer asks you to lower your price, it should not be a surprise and the last response to offer is, “Let me see what I can do.”
I call this the “Victim’s Lament.” The salesperson, instead of working to protect the profitability of the seller, quickly jumps on the buyer’s side of the negotiating table. Instead of operating as a Sales Leader for profitability, the salesperson turns into the buyer’s negotiating champion by explaining to others how he is being victimized by market conditions. There is a better way.
In my article last month, I cited modern work on the subject of behavioral economics and mentioned that buyers who receive price discounts wonder if money was left on the table. If they got a point or two, it is natural to purchase with that gnawing feeling they could have gained more. In other words, part of a successful sales experience is helping the buyer recognize they got the best price possible.
All behavioral economics mumbo jumbo aside, it would be naïve of me to presume that a salesperson should never provide a price concession. There are moments when competitive pressure might justify a lower price to earn the business. If this happens, it should not be a surprise and your negotiation playbook should have a list of concessions you might receive in order to justify the price reduction.
1. Delivery Concessions. The easiest way to justify the lower price is by asking for a delivery concession. Instead of guaranteeing the first-out delivery in the morning, you might ask for flexible delivery schedule. Perhaps you could ask the buyer to reduce the number of deliveries on a job. These are reasonable requests that show the buyer you can work together to manage costs and therefore a lower price.
2. Service Concessions. You give your buyer a lot. This could mean holding screens on a window shipment, keying and delivering hardware, take-offs, after-sale inspection, and more. If your buyer asks for a lower price, simply ask which of your value-added services could be removed to justify the request. It’s only fair for them to have to give up something that is considered an added value service in exchange for you agreeing to a price concession.
3. Volume Promises. If your buyer asks for a lower price on the next house, this is your chance to honor the request if the buyer guarantees you the next five. It’s simple math; it is the first rule of negotiating. More volume justifies a slightly better price.
4. More Product. If your buyer tells you the price on millwork and interior doors is a little high, ask if he will also buy windows from you…or lumber…or decking…or another product that allows you to justify a lower price. It’s a fair tradeoff.
The key to negotiation success is not to “see what you can do” by passing the buck along to a manager or vendor and giving the appearance that pricing is out of your control. Successful sales negotiators seek concessions and ask for conditional agreement before offering a lower price. In other words, this is the moment for the “If I could…, would you…?” question.
You let the buyer know you’re not sure you can get a lower price, but offer them the opportunity to help you justify it with the right phrasing, “I’m not sure I can do better. We’re tight on the margin here. If I could, would you be willing to offer [one of the concessions above]?”
Before you give a concession, get something in return. It’s the right solution for everyone in the negotiation.