We are all familiar with the importance of negotiation on the side of the buyer, but not much is said about negotiation on the side of the seller and how to navigate these tough scenarios. So what is the most strategic way to negotiate with a customer: When do you push, when do you stand your ground and when do you cave altogether? Well, here are four best-in-class responses to any hard customer negotiator.
1. “Gosh, that's expensive? Can you do it for less?”
This buyer is always going to look for a price reduction and understands that when they have tried it in the past, it has worked. Meaning that whatever price you go in with, they will inevitably push back and try to get it lower. In situations like these, you need to stay firm. Rather than caving immediately, present your case and explain why you are the best-in-class option for their needs. Once you have explained why you are not able to move on your price, you will have succeeded in highlighting your product’s value, and that is something the customer actually cannot argue with.
2. “It costs way too much and money is going to be a problem.”
Here, either the buyer can’t justify spending more or they just don’t understand how paying more will translate into a higher quality product or service. In cases like these, you can assure them that you understand that budget is a consideration, and then you could offer to put them in touch with another customer who had similar budget constraints but saw huge returns from an investment like this. By sharing a happy client with a similar background you will give the new customer the encouragement they need to take the plunge.
3. “I received other quotes, and yours is the highest by far!”
If you are familiar with your market and the competitors operating in it, you will know immediately if this is true. This should not necessarily be used by the customer as a bargaining chip. A good option here is to highlight what you offer in order to justify your value. If they are still not convinced then offer them integration or onboarding support at a reduced rate. This will increase perceived value without having to put you in the position of lowering your actual rate.
4. “This is far too expensive, contact me again if you drop your prices.”
Often when customers say this, you don’t know if they are bluffing or not. In cases like these, you really need to hold your ground and trust that you have something of value to offer. In cases like these you may want to respond by saying, “I understand your concern, would it be ok if I contacted you again in six months' time to see if your budget is more workable?” This will at least keep the doors open and allow you an opportunity to try again without looking desperate for the business. You can also ask the customer why they feel your product is not worth the quoted price, which then gives you an opportunity to justify the cost. If they still continue to push hard, instead of caving, rather trade for something. Like offer an extended guarantee, negotiate on volume or offer a value-add elsewhere. The important thing to remember is to never give away anything for free as this will undermine your value proposition and create a negative perception of your brand.
The bottom line
If you are a seller, then you will always find yourself in the tricky position of having to negotiate in order to close a deal. Buyers will come up with all sorts of ways to bring you down on price or avoid committing, but if you can demonstrate that you have real value to add, then this won’t be such a problem. So listen carefully to what your customer is concerned about but then be sure to construct your argument in careful ways in order to secure the customer enough to close the deal.