Understanding the Strategies Used by Software Buyers
Software buyers tend to be a knowledgeable bunch when it comes to negotiating deals with vendors. A number of books and programs exist to show software buyers how to use aggressive tactics to get the lowest possible prices out of sellers.
Given that a large number of software buyers are taught to take advantage of sellers in this way, it’s imperative that anyone who sells software is aware of the specific tactics buyers are likely to use. Here are some insights into these tactics from a few major players in the software industry:
One strategy used by software buyers is to accept bids from three vendors instead of just one, even if the buyer already knows which vendor they’ll be choosing. The purpose of this strategy is to get quotes from the vendors they’re not buying from, then use these quotes to negotiate a better deal from the vendor they do intend to purchase from.
The buyer will tell the two losing vendors that they’re winning while telling the winning vendor that they are in trouble, causing the winning vendor to lower their bid. As a salesperson, it’s important to recognize the advantage that this type of false competition can give to the buyer, so you can be prepared to defend against it.
International Computer Negotiations
Another thing savvy software buyers will do is invite salespeople to bring higher-ups in on the process, because higher-level employees have more to give. The buyer just needs to give enough positive signs to the salesperson that they will forecast the opportunity.
Now that the salesperson has committed to management that the deal will come through at a certain time, management can be relied on to pressure the salesperson. This can benefit the buyer by making the salesperson more desperate, but a smart salesperson should be able to recognize what the buyer is doing and not succumb to pressure from management.
One of the most common and natural negotiating ploys buyers use is “The Flinch.” In other words, the buyer will flinch at whatever price the seller offers. Whether mild or strong, the flinch is a subtle way of suggesting to the seller that they lower their price. A good salesperson won’t overreact to this flinch by giving a huge discount, because that’s exactly what the buyer is hoping for.
Understanding the tactics that software buyers are likely to use, is a key part of staying calm and collected throughout the sales process. Get more insights on the negotiating process with my book, Negotiating with the Savvy Software Buyer.