Step #4: Negotiate
How do I negotiate with accounts I really need?
11 Things to Do When the Heat Is On (cont'd)
#10: Concessions are cash
Always think of the dollar value of a concession. It will help you appreciate the need for care in the concession process. There are 4 types of concessions you should not try:
Buyers will continue to push you if you concede with equal amounts every time. For example if you remove from your service a feature that’s worth fifty dollars and the customer gets a fifty dollar reduction in price, then neither of you are in a better position. You provide less service, and he or she pays less for it.
Final Concession Should Be a Big One
This can create hostility in the negotiation if the client thinks you held out through the entire process—effectively wasting time. Be careful not to let this backfire on you.
Give It All Away Up Front
Some buyers like to say they “don’t like to negotiate.” This is a ploy to get you to provide the best-possible value and price at the front end of the negotiation. They’ll be back for more.
Testing the Waters for Small Concessions
When you make a small opening concession and the client rejects it, there is a temptation to continue to offer larger concessions until there is agreement. Be careful—this exposes you to compounding concessions. The list will grow every time you concede, and you’ll face concessions deeper than your bottom-line position.
#11: Pull back
If the buyer continues to push you for further concessions, you can withdraw what you’ve already agreed on. This is risky, but you may be in a position where you can’t go any further with concessions. For every new concession the client asks for, withdraw one that has already been agreed on. This strategy is a last resort, and one that can backfire.
Copyright 2017 Paul Kidston