In sales have you ever been asked for a discount or had a client pushback on price? In this video Robin Fielder, LDL Founder, shares a proven framework that will transform your approach.
You’re making a sale and towards the end the buyer says, “It’s a tough market. We’d like a discount, please.” What are you going to do? Some sellers reply , “Okay. As a gesture of mutual confidence in our ongoing relationship. We’ll give you 10%.”
That’s not being an effective salesperson. Anybody can give away profit margin. It’s just weak selling.
Keep in mind, it’s the buyer’s job to challenge your price. They are paid to do that, and they are trained to do that. But for some reason we salespeople tend to automatically assume that – because the buyer challenges our price, we have to concede something. Well – maybe we do and maybe we don’t.
So what should you do?
Here is a tried-and-tested three-step sequence for handling the price challenge – make it part of your team’s regular sales training:
Step one – Defend Your Price persistently. This should be your first response. By defend your price we mean build the value of what you are offering. Remind the customer what they are getting. And here’s the key – explain the detail of all the work you are going to do to make it happen. It’s also helpful to highlight your expertise, your experience and your dedicated team.
If the buyer still pushes you for a discount move to:
Step two – and this is crucial – Another price, another package. Yes you can reduce your quoted price, however you will need to re-scope/refine your proposal. This effectively means that you need to take something out. What happens is you offer them an alternative package, a scaled down version, which does not meet all of their requirements. The secret is to have these alternatives thought through in advance. Don’t try and come up with them on the spot. By offering an alternative you are communicating your price is firm and in many cases this will be sufficient and the buyer will go ahead at the price quoted. If not move on to Step three.
Step three – Concede slowly and reluctantly and in SMALL AMOUNTS. Most sales people do the opposite-they concede quickly and in large amounts!
Make the buyer work for small concessions. Play hard to get. Give them the feeling that they have reached the bottom line. And get something in return. Negotiation is defined as ‘what I offer you balanced by what you offer me’. You should always aim to get something in return even if it’s just a testimonial. That’s inexpensive for your customer but valuable to you.
Here’s an invaluable tip for sellers:
Whenever you are about to make a concession, pause and ask yourself – ‘what’s wrong with half the amount I was thinking of?’ It helps you to concede slowly and stops you giving too much away in the final stages of the sale. For example if you were thinking of offering a 5% discount in return for prompt payment – halve it and offer 2 1/2 %.
Once the deal has been done, summarize what has been agreed and how you both benefit.
So there you have an effective three step sequence for handling the request for a discount or any other price challenge – Defend your price. Another price, another package. Concede slowly and reluctantly.
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