Sales Negotiations – The Irony of the Simple Concession
โMy budget is tight – and for me to be able to buy this gallon of mayonnaise here at Costco today, I need 10% off?โ
โI know this โbowl two games, get a third one freeโ coupon expires on Saturday, but Iโm afraid Iโm on vacation this weekend. Will you hold the price until Monday?โ
โYouโre making me pay for all of these onion rings, but I only will eat a couple of them. Can we adjust the price of those to how many I plan to eat?โ
Why donโt we ask for concessions like this?
Itโs not because these are cheap things – I mean, you probably drive an extra distance to save a couple of pennies on gas, right?
We donโt, subconsciously, because of a belief that:
a) The pricing and terms are established: You have confidence that the price is the price. Thereโs flexibilityโฆyou can pay with cash, or a credit card, and on some sites, you can finance, but itโs established.
b) We have confidence that others are paying the same amount for the same thing right now.
With this in mind, teams across the sales-o-sphere, right now, are unchecking both boxes with their clients here with a couple of days left to go in the quarterโฆ
Them: โCan we get NET60 payment terms instead of NET30?โ
You: โCanโt do NET60, but we can do NET45. That work?โ
Ooohโฆthat was easy. What else can I ask for?
Them: โI just need another 10% off this to get it done.โ
You: โWould 5% work?โ
Free slow pay. Free money. Just for asking.
It slows down your deals. It erodes trust in your pricing model. It erodes the value of your deals.
Consider This Instead…
Your pricing is (very likely) based on how much they buy (i.e., tiered pricing), how fast they pay (i.e., upfront annual NET30), how long they commit (i.e., minimum 1-year), and likely based on when they sign, too.
When a client asks for NET60 payment terms when your pricing is based on NET30, instead of saying, “We can do NET45”, can you say something like this?
“As we’ve discussed, our pricing is based on four core elements – volume, timing of cash, length of commitment, and the timing of the deal. Your pricing is based on NET30. If you need extended payment terms, we can do it, but we’ll need to reflect it somewhere else in the pricing.”
Then, go through the levers…
- Can they commit to more stuff (Volume)?
- Can they pay more upfront (Timing of Cash)? (Meaning, if they have quarterly billing NET30, and want NET60, can they pay semi-annually or annually in exchange for NET30?)
- Can they commit longer (Length of Commitment)?
- Can they help you predict timing through mutual alignment (Timing of the Deal)?
Those are all things you’re probably willing to “pay for” in the form of extended payment terms, right?ย
Establish the pricing and terms early and often. Negotiate transparentlyโฆ
I speak and teach revenue organizations on how to leverage transparency and decision science to maximize their revenue capacity. Itโs what I doโฆteach sellers, their leaders, and really entire revenue organizations the how we as human beings make decisions, then how to use that knowledge for good (not evil) in their messaging (informal and formal), negotiations and revenue leadership. I wrote a 3x award-winning book (๐๐ฉ๐ฆ ๐๐ณ๐ข๐ฏ๐ด๐ฑ๐ข๐ณ๐ฆ๐ฏ๐ค๐บ ๐๐ข๐ญ๐ฆ), and have a newish book out (๐๐ฉ๐ฆ ๐๐ณ๐ข๐ฏ๐ด๐ฑ๐ข๐ณ๐ฆ๐ฏ๐ต ๐๐ข๐ญ๐ฆ๐ด ๐๐ฆ๐ข๐ฅ๐ฆ๐ณ) now that just won its first award!
Reach out if you want to discussย The Transparency Saleย sales methodology,ย or reallyโฆanything else (sales kickoffs,ย workshops,ย keynotes, the economy, history, etc.)! Emailย info@toddcaponi.comย or call 847-999-0420.
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