4 Rules of Price Concessions
When a buyer puts pressure on a seller, the seller’s natural reaction is to start offering concessions. Yet if a seller gives big discounts quickly, they degrade themselves and diminish their offering in the eyes of the buyer.
Before giving any concessions, savvy sales negotiators will deploy the mobile defense plan to politely, but firmly, stand behind the price.
If the seller must make concessions to close the deal, they should do so strategically, by following the four rules of sales concessions.
Rule #1—Give concessions in small pieces
Break up any concessions into discrete pieces and give up the pieces one at a time.
Smaller increments help to ensure that the seller doesn’t give up too much, or too much all at once. If the buyer manages to collect everything in one fell swoop, there will be nothing left if he comes back a second time.
Rule #2—Make it look like it hurts
When a salesperson gives a concession, it needs to be done reluctantly.
All savvy buyers are players in the negotiating game, and part of the win for a player is the feeling of winning. The best win is a hard-fought win.
A good deal is that which is perceived to be a good deal.
Rule #3—No unilateral gifts
The seller must always get something back of equal or greater value.
When a salesperson plans the concessions, they are willing to give, it’s also helpful to consider the bargaining chips a seller has that they may offer in order to receive a concession.
For example, a buyer could offer a 5% discount in exchange for securing a multi-year commitment.
Rule #4—First In, Last Out.
In sales, it’s best to be the first in, to uncover the buyer’s need. When a person expresses vulnerability to someone, she tends to see the person in whom she confided as a trusted advisor and a source of help.
By contrast, it’s best to negotiate last. The buyer will defer making a decision until she has exhausted all of her options. Only the last negotiator is really in the position to close the deal.
If you, or your team, could use some help tightening up sales negotiations, contact me today at 703.966.0192 to discuss your options.