Archive for September 2010
Recently I was hired to run a session on negotiation skills. The day was part workshop and part role play and was designed to help my client’s staff have a broader range of responses to the “What discount do I get?” type of question.
There are many strategies to this situation. One is to start with a price that is higher than you will be happy to settle for. The “discount” then brings the price back in line with the expectations of both sides. Both sides know the game and both sides go through the “discount dance”
Another is to include items that you charge for that you can include for free later. Depending upon your industry these might be delivery, phone support, training or low-cost accessories.
But, if the focus of both sides is only on price, then we really aren’t negotiating are we? All we are doing is haggling. And you can get plenty of haggling practice at a car boot sale. Haggling is not negotiating.
Of course we can try and turn the price discussion into a value discussion. That’s a more meaningful conversation – but it does assume you really understand that value of what you are offering to a potential customer. If you don’t, then you need to swot up on your product knowledge and ask better questions at the early part of the sales interaction. Failure to do this will result in haggling as your only option as you don’t have the knowledge, or information, to defend your price.
Another simple tactic is to lower the price but also remove some component of the package being offered. Ideally a “nice-to-have” for the client can be removed and not a “must-have”. Again, there are many strategies around this type of approach.
But, if you have to give a little on your price, and there might be times when this is the right thing to do, make sure you get more than the order in return from the client. Get better payment terms, get a recommendation, get more units, get exclusive supplier status, get anything – but get something back in return. At least this habit may lead you, in time, to move from haggling to true negotiating. This approach also teaches the customer not to ask for a discount next time around, unless they have something to give you back in return.
So a mantra at all negotiation training (well certainly it is at mine) should be “if you have to change the price – change the package that is offered”