Some sales experts would tell you that if your buyer is crying the price blues, you made a mistake. You didn’t properly qualify the buyer in the first place, or you haven’t demonstrated enough value, or your buyer senses weakness. In any event, the last thing you want to do is offer a price concession.
I don’t know about the experts, but I see smart salespeople offering price concessions — when it makes sense. Because in a negotiation, everything is, well, negotiable.
That said, some salespeople are too quick to cut price. Not only are they leaving money on the table; they’re also undermining their credibility with the buyer. “That was too easy,” the buyer thinks. “This salesperson must have been overcharging me to begin with.”
So when does a price concession makes sense, and when does it not? Consider these common scenarios:
“Nobody pays the asking price.” Not a good enough reason to cut your price. Listen to your mother: If everyone else jumped off a bridge, would you jump too? Head this one off ahead of time, and earn some respect in the process: “Ms. Buyer, I know most sellers in this industry will quote you a high price and then agree to a discount. Rather than waste our time, let me give you the real price up front.”
“It’s not in our budget.” Buyers like to hide behind budgets. You can’t argue with a budget, or have a discussion about value with a budget, or ask a budget questions. But “not in the budget” is NOT the same as “we don’t have the money.” If the value proposition is right, budgets can be revised.
“Your competitors can do it for less.” Hmmm. You know your competitors. If they really have figured out how to deliver the same value for less, you do have a problem — but it’s a way bigger problem than winning this sale. On the other hand, if you know they’re selling at a loss just to win the business, or playing games with the numbers, say so. Your buyer probably suspects as much already. After all, if the competition offers such a great deal, why is the buyer still talking to you?
“We don’t have the money.” Assuming you qualified the buyer properly, that could mean “We don’t have the money right now.” This might be a case where you might want to offer a concession. But don’t just give it away. Make buyers pay for their price cuts – for example, by agreeing to a long-term contract, volume commitments or finance charges.
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