Price Wars?

From a recent Jill Konrath newsletter:

How to Overcome Last Minute Price Objections by Jeanette Nyden, J.D. Have you gotten a call like this before? "Hi, Susan. I sent over the contract. Did you get it? My boss wants a couple more people trained on your system that weren't included in the original proposal. That won't be a problem, will it? Call me." Susan was startled and angry. She'd already given her client her BEST deal. It was not okay. Today it's common for companies to repeatedly ask for price reductions. After all, we've given them all the discounts they asked for when the money was flowing and times were plentiful. For years, I've warned companies that this day would come. It had to. It was inevitable. Prices were going up. Eventually they'd have to be reflected in the price of goods and services. During the same time, customers got into the habit of demanding price concessions. That worked when volumes were high enough keep the boat afloat. But in a tough economy, that's not happening. As sellers, you're tasked with bringing in more business. But how can you do that when your customers demand a better deal from you? Susan was caught off guard by her client's call. She admitted that she didn't know what to say. I immediately knew what I would have said - "Let's make a deal!" The name of today's game is making tradeoffs. I give a little and you give a little. It is that simple. To make effective tradeoffs, follow these three guidelines. 1. Know what you are willing to give. When Susan called me, she didn't know what ELSE she could give to her client. Since what the customer suggested was unacceptable, she needed to come up with something else to keep the client engaged. Would it be a report? An assessment? What else could you offer a client that demands another price reduction? This step requires you to have a heart-to-heart conversation with your sales leadership. It's not enough to say that you cannot offer anything else and to hold the line on price. That's not realistic in this economy. Customers want vendors who are willing to work with them or they'll look elsewhere. 2. Know what you want from them. Again, it sounds easy enough, but Susan drew a blank. At first she couldn't think of one thing to ask for in exchange for allowing more people to be trained on her system at no additional cost. This is deadly. Knowing what you want in these kinds of situations must be part of your sales preparation process. You can expect customers to sandbag you with price concessions, even after they signed on the dotted line. There's no excuse for not knowing what to ask for in exchange. After 10 minutes of brainstorming, Susan decided she wanted an executive briefing with the C-Suite. She asked for it and got it! 3. Use if-then language. When making a tradeoff, don't be vague and round-about. That just gives your customer an excuse to take advantage of you. Many people will respond in kind to your generosity, until their pocket books are threatened. Then, it's every person for himself! By using if-then language you signal that you are open, flexible and willing to have a back-and-forth conversation. This is an essential step in your customer to agree to the tradeoff. Susan was caught off guard by her client's call because she hadn't given any thought to tradeoffs. Once she got over being mad, she realized that she didn't have a good answer. That's why it is as important to prepare the tradeoff question as carefully as you prepare to handle objections. Tradeoffs encourage a genuine back-and-forth conversation. Those conversations, when handled professionally, foster trust and respect. And, we've all heard that people do business with people who we like and trust. Selling is not going to get any easier, but it will get a whole lot more creative. Making tradeoffs simply means that you and your customer get the maximum benefit from the transaction. What could be better than that? -- Jeanette Nyden, author of Negotiation Rules! A Practical Approach to Big Deal Negotiations, is the president of J. Nyden & Co., Inc, a negotiation skills training company. For more information and free negotiation articles visit www.jnyden.com. Jeanette can be reached at 206-723-3472 or jn@jnyden.com.

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