Negotiation

4. Selling at a Higher Price

Begin negotiating as soon as the customer appears interested.

The buyer will immediately start trying to judge what concessions can be won from you. Do not reveal what you are prepared to give away.

4.1 Do not make concessions from the start.

• Even if you are prepared to accept offers, do not say so in your advertisements.
• 'Introductory' discounts are difficult to remove later.
• Do not offer discounts which have not been asked for, in an attempt to buy goodwill. This may make the customer believe the original price was too high.
• Postpone any concessions - eg 'Let's talk about that when we meet.'

4.2 Start tough and stay tough.

Start with a high demand, and then offer only minor concessions, or deals which work to your advantage.

• A tough opening usually gets a soft response.
• There is almost always a chance to start negotiating again, if things go wrong.

4.3 Sell all the benefits (see Effective selling).

• Show how much the product will be worth to this particular customer.
• To make the headline price lower, strip out extra costs like expenses and consumables. Charge for them separately.
• Sell a package which shows that the customer is getting value. For example, a quote of £2,000 to do a day's training sounds expensive. Exactly the same training, sold as 'two full days' preparation for a 12-person course, including a tailor-made training manual (that will make the training three times as effective), plus the day's actual training, all for £2,000', sounds like better value.
• If you are already a supplier, and the buyer mentions a 'better offer' from a competitor, point out the risk and hassles of using a new supplier.

4.4 Restructure the deal, rather than reducing your price.

• Can you offer better payment terms, delivery service, or special specifications? Do not do this if it would be more expensive to you than dropping the price.
• Is the buyer prepared to place a larger order, or commit to future orders?

4.5 Link the deal.

• Make a concession on one deal in return for getting another deal settled. For example, 'I will agree to your request for a five per cent discount, if you withdraw your claim for compensation on those parts you said were faulty.' This puts the other side under pressure to settle both deals.

4.6 Work out the true value of your product to this particular customer, at this particular time.

The same product may be worth more or less to different customers.

For example, an antique table could be:

• Valuable to a specialist collector. Hold out for your price - you know that piece of furniture is worth it.
• Needed in a hurry by a film company. Up the price and stress the most important part of the deal - that you can deliver the table today.
• More than is necessary for someone who just needs a table for a computer. If the price is too high, offer another product which is more suitable.

4.7 Avoid getting drawn into an auction.

• Find out if the buyer is really trying to do a deal with you, or just window-shopping. If it looks like shopping around, invite your customer to come back to you with details of the best offer at the end. Ask him or her to agree that you will get the business if you can beat that offer.