Thursday, November 12, 2009

Make Sure You Get Something in Return

Many sales people are not skilled at negotiating price. Personally, I love to do it. The negotiation is the culmination of the sale. By this point you should have spent a lot of time listening to your prospect, understanding what they value so that you can match the appropriate product or service feature to what they value. In my opinion, this is where the fun begins.

Some prospects will ask you for a discount. If you have listened carefully and built a strong connection throughout the sales process do not be intimidated by this request and definitely don't drop your price without thoughtful negotiation. If you do choose to discount your price, make the prospect commits to a volume level or a length of time. For example, "sure if you order 10,000 and we can be guaranteed a renewal order next year, I can work with you on the rate."

Do not give a price concession, without getting something from the prospect in return. If you give the product or service away, without eliminating features or changing terms, you will diminish the value you've worked so hard to build.

Here's the key - make sure you document the terms. "We agreed to a volume discount for 10,000 units and a two year term." Make sure the prospect commits to this verbally. Reiterate that you both understand and you both agree to the terms.

If at the time of order, your firm receives a 5,000 unit order make sure to revert back to the original pricing agreement. Do not discount if the prospect does not commit to their end of the bargain. You should be building partnerships with your customers. As partners, require that they live up to their end of the deal. They'll respect you for it.

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