How to Better Handle Pricing Pressure During Sales Negotiations

How to Better Handle Pricing Pressure During Sales Negotiations
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Better Handle Pricing Pressure During Sales Negotiations
Almost every sales leader wants their sales team to better handle pricing pressure during sales negotiations to increase win rates, reduce sales cycles and improve margins.  Our sales negotiation research backs up their desire.  Based upon research over 3 years in 19 countries, across a wide range of industries, we identified the “most difficult” and “most common” verbal sales negotiation tactics.  The results surprised us.

97% of Negotiation Tactics Are Predictable
While negotiations often feel unpredictable and challenging, 97% of the verbal tactics used globally followed a very, very predictable pattern that could be reduced to just two main propositions related to how to better handle pricing pressure during sales negotiations.

  1. Alternative – The buyer’s alternative to you (most often your nearest competitor)
  2. Price – Or offering something else for free or discounted

So Prepare For Your Negotiations Accordingly
All of us in complex sales understand that when clients pressure us on price, we need to clearly articulate value in a way that matters to our buyer during the sales negotiations process.  But it is easy to get flustered in the moment and offer concessions or discounts that will haunt us in the end…with less revenue and/or with a precedent that will dictate every future negotiation with this client.

Three Sales Negotiation Tips
However, sales negotiation training professionals have three tips on how to better handle pricing pressure during sales negotiations and better manage the conversation when a client pushes back on price:

  1. Don’t Capitulate
    When a buyer says they can get a similar deal for less, acknowledge that may be true but stand by your price for what you offered. Differentiate from your cheaper competition based upon the unique and compelling value you bring and leave it at that.  It is a slippery slope if you offer concessions without getting equal value in return.
  2. Don’t Get Drawn Into an Item-by-Item Rationalization of the Overall Cost
    You can never win at this game. Your fees are your fees based upon the value you provide.  If they want to rationalize your offer at the item level, consider offering three options instead with varied price points and commensurate value propositions.
  3. Play the Take-Away Card
    Ask which part of the proposed solution they would like to eliminate to meet their desired budget. If you have thoroughly understood their situation and crafted the solution with their best interests at heart, there will likely be no feature they would be willing to subtract.

The Bottom Line
While high stakes sales negotiations often feel unpredictable, 97% of the verbal negotiation tactics follow two main propositions related to alternatives and price.  Is your sales force adequately prepared for pricing pressure during sales negotiations?

To learn more about being better prepared for pricing pressure during sales , download the full research report How to Prepare For High Stakes Sales Negotiations

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