 In a conversation with a professional buyer friend of mine who works for a fortune 100 company I asked for some advice on how to negotiate the best price from buyers like him. I reasoned that the more I knew about the buying process the more prepared I could be when faced with a negotiating situation. Our conversation quickly went from the basics of establishing credentials, needs assessments, and market pricing, to a discussion of how bad does the seller want to make the sale. The buyer said “If I can smell fear I know I can push hard for a lot of concessions and a rock bottom price but it also makes me think twice about dealing with the vendor.”
The smell of fear changed the whole approach the buyer took and the dramatically changed his confidence level regarding how much power he might have with the vendor. Once he sensed he had the upper hand and the vendor was still qualified he took great pride in seeing just how far he could push the vendor to strike the best possible deal. This very aggressive approach to negotiating often resulted in his company getting goods and services for far less than what their true market value was.
Perhaps you have been in a situation when you sensed fear. If not as a purchasing agent maybe you have sensed fear on a personal level. Have you purchased a house from someone in foreclosure or divorce situation? Have you ever bought a car from someone who is days away from having it repossessed? Have you purchased a concert ticket from someone minutes before the event when there are no other buyer in sight? In each of these situations the seller is often under tremendous pressure that can push them into a panic like mode. When faced with these sorts of pressures sellers often give up and take whatever is offered them.
Like the old deodorant commercial that used the catch phrase “Never let them see you sweat” not allowing a buyer to sense your fear, even if the making the sale is crucial to your success or survival, can make the difference between making the sale at good price and terms, or being forced into so may concessions that it becomes unprofitable, or perhaps even losing the sale entirely.
Knowing the value of your product, understanding the needs of your buyer and having confidence in your ability to deliver are all ways to help you present your product or service in the most favorable light and mask the scent of fear.
If you know how important your product or service is to your prospective customer or how much time, money or quality benefits your product or services offer, you can speak from a position of strength. In the process of researching your prospects needs and in asking probing questions you may discover that the buyer actually has a high level of fear themselves. Maybe they need inventory quickly to keep a line running or they are having quality problems with a current supplier, or perhaps they are paying too high of a price for what they are getting. If for example, you know that by adapting your product your client could save thousands of dollars a month and that they really don’t have any similar alternatives you have real negotiating power.
Having confidence in your product or service generally comes from having had success in selling and delivering it. Success breads success and confidence. If you are just starting out or don’t have a lot of established customers look for similar situations you may have been in with a prior employer, or draw an analogy that the buyer can relate to. By carefully practicing your sales presentation and by listening to a prospects needs you can come across as cool and confident. When you are negotiating from a position of strength your ability to command a fair price is greatly enhanced.
About the Author – Scott Francis is President of Topline Development LLC a Strategic Marketing Consulting Group that provides helps companies determine how they can make the most amount of money with the least amount of resources. To learn more about Topline Development LLC visit their web site at www.ToplineDevelopment.com or contact Scott directly at scott@toplinedevelopment.com. |
