How to Negotiate a Deal Without Compromising on Price
Are you relying on price as your primary lever to get deals done? If you use this tactic too often, you’re going to find yourself coming up short when the end of quarter reports roll around. Use these four ways to increase your deal size without sacrificing on your win rate.
Know Your Customer
How much of a connection have you made with your client? You should have a wealth of data about the decision makers, the company as a whole and what their motivations are. If they’re pushing for a discount on pricing, start looking at their motivations behind the move.
Are they dealing with budget stress from another department, or under pressure to cut costs as much as possible for any new expenses? Did the organization recently get a new CEO that’s shaking up the structure of the business?
Once you discover why they’re price conscious, you can start steering the sales conversation to go where you want it to. Sometimes all you need to do is acknowledge the difficulties that they’re having from a place of understanding.
You also want to leverage the emotional connection that the buyer may have with you. While B2B sales may not be as emotionally driven as the B2C market, the decision makers are still people. If you’ve known each other for years and meet up at conferences on a regular basis, then you have a solid foundation to build on. Even if you don’t know any of the decision-makers personally, you may have connections within their business.
Sales can be a pretty small world, so take a look at the customer’s team and see if you recognize any names. Your friends might not be directly involved, but they can help influence the decision and move the deal along if it stalls out due to the price.
Understand the Value You Are Delivering
Your customer may have a disconnect between the price and the value that they’re receiving with your solution. You need to relate the major benefits they’re getting in a way that’s immediately relatable.
What are the decision maker’s pain points? Make sure that you’re customizing these based on the person you’re talking to, as these could be different between the managers, executives and front-line employees. Maximize your chances to get buy-in from everyone involved, rather than focusing on a single decision maker based on who you think has the most control over the decision.
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A clear and concise answer to “What’s in it for me” can make a big difference. You get bonus points if you make sure to phrase the benefits in talking points that the customer can use for anyone higher up in the approvals process. Do everything you can to make their job easier so there’s less friction in the way of a deal.
Know What You Can Give Away
You might not be able to budge on the price, but you probably have other valuable things that you can give away. Look for opportunities to make the offer more attractive, such as providing training resources or giving the customer a priority customer service line.
The ideal solution is a balance between the resources your company spends on offering these bonuses and what the customer’s perceived value is. If the decision makers appreciate having quick access to customer support in the event of an emergency, then they’re going to love the priority line offer. If they’re looking for a way to smooth out the adoption process and become productive quickly, then the training may be more appropriate.
Get as creative as possible, especially if you can offer something that’s more valuable than a discount. You may need to think outside the box to home in on the most attractive package, but the extra work is worth it when the deal finally closes.
Bundling your solutions with a complementary service is another way that you can increase the attractiveness of the offer. Depending on how much the customer values what they’re getting, you may end up increasing the revenue generated.
Know What Makes This Purchase a Compelling Event
What caused the customer to start researching your product in the first place? Are they undergoing a business expansion or running into massive productivity problems?
Purchasing a solution could mark the first step on their journey to scaling their operations or improving employee satisfaction. The barriers that stand in their way may get eliminated once you close the deal and go into the deployment stage.
Push on these points so you remind the decision makers about the importance of getting this deal done. Every time they push things to the next meeting or month, they’re willingly leaving their company in a frustrating situation.
Sometimes dealing with a customer that fixates on the price is a frustration-inducing situation. Too many sales reps cutting the price of their contracts can lead to wildly inaccurate sales forecasts. Before turning to pricing as the lever that gets everything done, make sure that you go through these four methods to see results. If all else fails, you can still fall back on the discounted rate after you’ve tried these tactics.