The Negotiator Magazine

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Tip Number Three: Don't apologize!
Once you have established the value of your product or service, present your price with confidence. Never apologize for your price. If you believe your price is correct, just assume that your customers will agree.

Tip Number Four: Always be willing to walk away!
I call this Brodow's Law. You must be prepared to say "Next!" or your customers will sense your uncertainty. The willingness to walk away from a sale comes from having options. It is crucial to have other potential sales in the line-up. When you know that your sales career doesn't hinge on this one deal, you can exude confidence. And buyers will bow to confidence.

Tip Number Five: How to justify your price.
Once you have decided on your price, you must provide reasonable justification so your buyer will say, "Okay, that makes sense. I can accept that." Here is your justification:

  1. Give your price legitimacy: "My price is reasonable for the marketplace. This is the going price for this product or service." If your buyers are doing their homework, they will know you are telling the truth. And remember you are entitled to a reasonable compensation.
  2. Focus on the value of your product or service, not on the price. Buyers will pay for value. Sell features and benefits.
  3. Show them that you'd like to help them out, but you can't because you can't lower your price for one customer without lowering your price for everybody.

Tip Number Six: When to negotiate your price.
Obviously, there are exceptions. You want to leave yourself the option of negotiating a lower price if it is in your best interest to do so. The operative principle here is called "saving face." In other words, you will lower your price only if you can save face, i.e., maintain the integrity of your basic pricing structure. So you tell your customer, "I accept a lower price only under the following circumstances ..."

What are those circumstances?

You might consider offering a discount if the customer will buy more than one, or if the merchandise is flawed. I recently gave a keynote speech at a reduced fee for a client who had already booked six two-day seminars. My face-saver: the multiple bookings. (As a result of the interest generated by the keynote, the client booked another six seminars.)

Tip Number Seven: Make the buyer work for concessions.
If you appear too anxious to negotiate your price or terms downward, the buyer will perceive you as worth less (or worthless). One of my favorite price negotiations was with a client who received a proposal from a competitor of mine who wanted the job so badly that they offered to do a negotiation seminar for nothing (just to break into the account). My client tried to convince me that I should lower my fee, but I politely refused. In the end, my clients booked me because they viewed my competitor's presentation as worth the price -- namely zero. My seminar was perceived to be more valuable due to my confident negotiating posture. If you do lower your price, be sure you made your buyer earn the concession. Don't give in right away. Ask for concessions in return, such as additional business.

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November 2005