A lot of focus is given to product pricing and price negotiation as part of closing sales. I have stated this before, and I will state it again - price is one of the less important aspects of selling technology.
Product is linked directly to value. It is much easier (not to mention profitable) to work on increasing your value rather than cutting your price. Since value is almost always perceived rather than measured, you the talented salesperson can increase your product value by taking the steps I preach.
Even when the product you are selling is 100% identical one can increase his price be making the sales process and post sale service more appealing. A good example is shopping with Amazon. Using price comparison engines I can almost always find identical products at a lower cost than Amazon. Still, the comfort of shopping on Amazon's excellent site, the guarantee they provide for shipping and returns and the knowledge that my credit card information resides in the safest place are worth 10%-15% more at times.
Here are a 10 steps I would like you to try:
1. Start by telling your customer that you are NOT the cheapest product out there.
2. Explain that the quality/service/support etc. cannot be delivered at the lowest cost.
3. Explain the differentiators you provide and ask the customer if they are worth money to him
4. If the customer tells you that you are too expensive, consider that you did not explain the benefits/value correctly to the customer.
5. If the customer does not see the benefits, offer a lower cost alternative, with less features.
6. If the customer states that even your stripped down proposal is still too expensive, consider waling away.
7. If you are still interested, ask the customer what price he believes could make the deal happen.
8. Don't hesitate to counter offer
9. If you are still far away, consider waling away. There are plenty of opportunities out there and not all of them fit your product/service. Trying to fit a square peg into a round hole is not a good idea.
10. Other tricks to move negotiation closer is asking the customer to make some modifications to his purchase. Can he order a larger quantity? Can he provide a long term commitment to buy? Can you get great terms?
REMEMBER - NEVER EVER DROP PRICE WITHOUT A CONCESSION FROM THE CUSTOMER - this only weakens your position and makes your proposal look inflated thus ruining your credibility.
I can write 50 more pages about price negotiation, but there have been many great books on the subject (I intend to list a few in a future post) . Again, it all comes down to establishing value.
I will revisit this subject in future posts.
Now go and sell.......
