In a recent ConnectITNews newsletter article, entitled "No Free Gifts: Advice designed to keep your value high and your customers happy", Colleen Francis discusses how to handle situations where your business clients demand additional concessions over what is currently offered for sale.
You essentially have two choices: stand firm and walk away to protect your price or provide the concessions that will win you the business.
If you choose the later (concession) option, then a simple system is detailed that maximize a profitable negotiation...
Step 1.
Conceed some benefit that does not lower the price. The article provided many examples including free shipping and/or setup, special credit arrangements, upgraded support, etc.
Step 2.
If you have to lower price, always ask one of the following questions first:
"What is important to you about an x% discount?" or
"Why is an x% discount important to you?"
That way you will be better able to determine the clients needs and how to best structure a response.
Never reduce you price without getting something of value to you in return. This places a cost to the client for that concession and in future negotations and creates equity in the realtionship. The article provided many examples including those that will cost the client money and those that are free for the client to provide.
Get a verbal agreement that this is all they need to get the deal done. For example ask, "I not sure I can get this discount. But, if I can, are you willing to go ahead?"
If you offer something that the client will perceive the value at full price and are confident that they will pay full price in order to obtain it, then you will be able to demand something valuable in return for a discount.
Advanced preparation is the key to successful implementation of this simple, yet effective system.
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