Are you facing some of your toughest negotiations? Are you constantly being asked to drop your prices? Are you finding it ever more difficult to get past “No”?
As business conditions remain tough, some of our negotiations get tougher. Our competitors are hungry for business and will aggressively drop their prices. So, more often we will face customers saying NO.
Some businesses will immediately drop their prices. This reminds me of a story told in Gavin Kennedy’s amusing and excellent introductory book ‘Everything is Negotiable’, originally published in 1982 and still in print. Explorers on a sled in the arctic are being chased by wolves and they decide to throw the wolves an Elk steak to stop them chasing the sled. When they throw the elk steak, the wolves stop to eat it. The explorers think that has solved their problem. However, 30 minutes later the wolves are back chasing the sled even more enthusiastically.
In business, if at the first no from a customer we drop our price then we simply teach them to say no more often. Just like the wolves, they will be chasing our sled again looking for more Elk steaks, more drops in price.
We will talk in another post about the importance in presenting our value in ways to prevent price objections, in this post we will suggest a question that can broaden the range of negotiating variables beyond simply price.
A very powerful question to ask is; under what circumstances could you accept our offer? Typically, the first response of a customer is to say “only if you lower your price”. So, be ready with the amended question; Apart from price, under what circumstances could you accept our offer?
What else could you include in the package that would be of value to them to accept your price? Expect the customer to go quiet, that’s the sign of a good question; they are thinking.
Be prepared to challenge them; is there nothing else we could do or add into the package? Sometimes they will say, you probably could not do this but if you could include X then we might be able to accept your price.
This question can transform the negotiation: from haggling on price to finding other sources of value for your customer; from fighting to finding joint value. For help in showing your customers the value of your proposition then call us on +61 2 9450 1040. Please share any thoughts you have on this below and subscribe to our blog using the RSS feed at the top right of the page.