I get a really bad feeling in my stomach when a buyer I've just started talking with sends me an email that says, "Give me your best price, Ali." Here we go ...
There are countless considerations that go into a product or service's price structure. However, most reps don't take the time to understand these mechanics. Most will jump to a discount conversation simply to get the deal inked -- offering what they think is the "best" price they can do. But this is a mistake.
First of all, reps should take the time to learn why the product or service is priced the way it is. This will make you much more comfortable and confident standing behind the price tag, even when your buyer is balking.
Second, "best" price means a lot of different things to a lot of different people. Being clear about the list price of your product or service, and transparently talking about price early and often in the sales process helps you and your buyer get on the same page. Where reps run into trouble is rushing to give the "best" price before the prospect fully understands the value of what you sell.
I never negotiate price unless I'm confident in the following:
- I have established that the buyer sees the potential value in my product.
- I have established that the buyer believes the product will address the problems we've discussed together.
- The buyer is 100% ready to pull the trigger and make a purchase.
Nine times out of 10, when a buyer first asks the "best pricing" question, one or more of these three conditions has not been met. If the buyer does not yet fully recognize the value in the product or acknowledge that it would meet their needs, circle back to a value discussion.
And determining whether or not they're ready to pull the trigger today isn't all that hard. All you have to do is ask. Try one of the following questions:
- "Why do you want to talk about price right now?" (This might sound obvious, but it will get the buyer to reveal where they are in their decision making process.)
- "So are we at a place where you are ready to start using this product?"
- "Have you made a decision that X is your choice?"
- "Before we talk about pricing options I want to be sure you are choosing us over XYZ competitors. Is that right?"
If the prospect confirms that they're ready to sign, proceed to the negotiation stage. A sales rep's job during negotiation is to make the buying process easy. Say, "Sounds like you are ready to discuss getting started with us. What can we do to make you getting our product or service as easy as possible?"
But if it turns out that the prospect is not ready to buy today, follow up with this question:
"Let's back up ... if you are not 100% sold on this, then why would we talk about pricing? How is that going to help you?"
This question creates a natural segue back into a value conversation, and ensures you don't negotiate before the prospect is committed. At this point, I'm striving to understand what remaining issues are preventing them from making the decision. Until I know the buyer wants to go with my product, I cannot begin to work on pricing, and I tell them as much.
Even though the buyer thinks they're ready to talk about the "best" price, they may not be. As a sales rep, it is your job to help them understand they're not ready for that discussion yet, and why.
When you are talking price (or explaining that it's not the right time to talk price), the most important thing is to listen. Remember that "best price" means a lot of different things to a lot of different people. Explain that you need to clearly understand what they're asking for, and why, and assure them that you will put your best offer forward once you know what would help them.