“I Want a Lower Price” – Part 1

“I want a lower price!”

Who doesn’t want a lower price? We would all like to get a lower price on everything we buy (brain surgery and parachutes being two obvious exceptions!). As a salesperson, that simple demand is probably the one you dread hearing the most. But, when you do hear it, what do you do? Simply lower your price?

The AGREE methodology has eight simple and effective strategies for dealing with this simple demand. The strategies are presented in order of increasing risk. Under each strategy are some sample statements (in quotes) that you could say to put the strategy into action. We’ll examine four strategies this month and four next month.

Strategy # 1: Let them feel heard.

You can acknowledge their request for a lower price without agreeing to any specific action on your part.
Remember, an acknowledgement is not the same as an agreement!

  • “All of my customers, in this economic environment, are looking for the best value, which they often equate with the best price.”
  • “If I were in your position, I would be looking for the best value also.”
  •  “As a purchasing manager, I fully understand that your role is to search out and find the best value you can get in every transaction.”

Strategy # 2: Specifically define the process of the conversation you’re about to have.

Unless you are a used car salesperson or a horse trader, you are not here to play the classic
negotiation game (you know the game… they start with a low price, you start with a high price, and then we meet
at some middle ground).

  • “Rather than begin our conversation with a negotiation over price, may I instead ask you a few questions to help me better understand your thinking about our current offering and our price?”
  •  “The price we’ve proposed is the best we can do with what I currently know about your situation. Could we spend a few minutes talking about your situation? Perhaps I can provide a better price if I better understand your current situation and needs.”

Strategy # 3: Quantify, Acknowledge, and try to get their commitment.

  • “The word “lower” has a pretty broad range, from $0 up to our current price of $X. Can you share with me how much “lower” a price you had in mind?”
  • If they tell you that “lower” means a 10% discount, simply acknowledge it: “It sounds like you are asking for a 10% discount from our current price. In addition to the discount, are you asking for any other changes to the deal?”
  • At this point, don’t commit to the action you will take. Do try to get a commitment from them: “I can’t say ‘yes’ to your request for a 10% discount at this time. Before I present your 10% offer to my management, can I have your commitment that this will be the final pricing request you will make?”

Strategy # 4: Carefully change the deal, with their input.

Most companies, when proposing a complex deal, have items that vary in profitability, and therefore vary in how much they can be discounted.

  • “We can possibly lower the overall price if we make some changes to the deal. I have seen my company offer better prices in certain situations. Here are some ideas I would like to propose for our consideration:”
     
    • “Would it be possible for you to accept delivery and pay for the goods earlier than you planned?”
    •  “If cash flow is a problem, could we possibly delay part of the deal until your next fiscal year?”
    • “Will you agree to finance the deal using our credit facilities?”

These first four strategies will help you better understand the customer’s demand, acknowledge the customer’s position, and provide you the opportunity to explore possibilities and to recap the value you provide.