So much of being successful in sales is rooted in your ability to negotiate with your customer, whether it's finding the right price that works for both of you, knowing when to be firm or something else.
Nancy Friedman, The Telephone Doctor, shares her negotiating tips to get you on the right track.
EARLY TIP: Beware of customers who ask for "ballpark prices," unless you're selling automobiles or houses. Most prices are firm. Try going into Macy's and asking for the "ballpark price" on the product you're holding. There's a price tag on the item and it's not a ballpark price! It's THE price. Or try asking the server in a nice restaurant for the "ballpark price" on the steak. Or your insurance agent on the new policy you're buying, etc. Not gonna happen. You get the picture. But there are ways to negotiate prices. Here are only a few negotiating tips:
1. Best not to start off with the price right off the bat. Put price in the bottom righthand drawer. Often a price cut will get the salesperson more excited than the prospect. You may think going in with a lower price will make the prospect grateful and give you an easy "go" right away. It usually won't. If they take your offer of the lower price, that indicates they might have taken it at the rate card price, which is where you SHOULD be quoting from to start with. When the customer asks for prices, let them know you'll be covering that very shortly. Then get into value, benefits, etc.—and better yet, a few key qualifying questions.
2. When you do bring up price, be strong and confident. A weak or hesitant delivery doesn't impress the customer. When the price sounds soft, it can often invite a lower offer.
3. Delay giving concessions until later in the conversation. A concession given too early is just a "giveaway." Save it by saying, "That's an interesting idea. And, to be sure, we will get back to that shortly."
4. When there is a request for a price concession, have a nice/soft way to reject it. Just because they have dealt with other salespeople who have weakened when price came up doesn't mean you need to be that way. The WISH statement often works. Customer asks: "Can I get a cheaper price?" Either answer with, "I wish we could; however, that's not an option we have." Or, if you have the opportunity to "play," you might use this: "Mr. Jones, since your budget is $4,000 and the project is $5,500, we can remove a few parts of the package and I can work the pricing in your favor."
5. Never underestimate your strength in a negotiating situation. Some prospects assume a salesperson is in the position of weakness. If you fall for that, that will weaken your resolve and soften your backbone. Understand this: If the prospect is bargaining with you or even discussing the proposal with you, that's an indicator of interest—a buying sign. Their actions are telling you without saying it outright you have something they need or want.
6. When do negotiations begin? Ready? When you say "hello." Negotiations, in general, are ongoing all day long at work and at home. And it's often a subtle thing. Recognizing you're constantly involved in negotiation gives you an advantage. Be aware that life itself is a series of negotiating situations. You often are negotiating without realizing it. Kids, spouses, siblings, parents ... we're all negotiating.
7. Avoid thinking: "BEING NICE is good negotiating." Some salespeople believe if they're nice and give a price concession, the other side will reciprocate with a concession back (i.e. the sale). Nice idea, however, it usually backfires with a buyer. What they do is take what you offer and then try to get more. (After all, you're giving things away.)
8. When you give—GET. When you're considering giving a price concession, GET SOMETHING IN RETURN. Use the "if/then" technique so you get something in return. SAMPLE: "Mr. Jones, if I can get you the widgets at that price, are you able to give me the go-ahead now?" or "Mr. Jones, if I can get you that price, are you able to give me a great referral?" The idea of the "if/then" is to GET SOMETHING IN RETURN. There are dozens of other "gets" when you give. The most important reason to take something back when you give a concession is this: It puts a "price" on your concession. No longer are concession requests free. By asking for something in return, it keeps you from getting additional requests for concessions.
9. Why is it important to be a good negotiator? Because a bad negotiator leaks dollar and reduces the all-important profit to the company. Profit is what's needed to run a company. No profit, no company.
10. And while this tip isn't "new," it's still very good. When you can, substitute the word "investment" for the word "price" or "cost." In most cases, the prospect is making an investment, and a good one at that.
BONUS TIP: When asked: "Is that your bottom price?" a strong, smiling, "Yes sir/ma'am, it is," might get you the order. (They seem to "have" to ask!)
Nancy Friedman is founder and president of Telephone Doctor Customer Service Training in St Louis, Missouri. Telephone Doctor helps companies communicate better with their customers and coworkers. Nancy is a popular keynote speaker at franchise conferences and corporate meetings around the country. The author of nine, Nancy has appeared on Oprah; Fox News; CNN; Today Show; CBS This Morning; Good Morning America, Great Britain, Australia; and many other radio and TV shows and media outlets. She can be reached at [email protected] or visit www.nancyfriedman.com or call 314.291.1012.
This article was republished with permission and originally appeared at the Telephone Doctor.
Photo courtesy of Nancy Friedman.