1) “It isn’t fair to my other clients who pay full price!”
I put that one in quotes because that’s what I say, word for word when someone wants to play “Let’s make a deal with Uncle Paul”
When you think about it, it really isn’t fair to reward people based on their ability to negotiate.
I do, however believe in giving reduced pricing based on volume.
In other words . . . want a better price?
Have me coach or train more of your team and you’ll see the pricing I gave you go down.
Everyone get’s the same opportunity. I find things are fairer that way and my clients agree!
2) Quite selfishly, I don’t want to condition that type of behavior with my clients.
I know, I sounded like a real ass when I said that but I’m being straight with ya;
I DON’T want to condition that type of behavior!
Why? Because I don’t want to haggle over every deal going forward nor do I want clients who want to think it’s “Castain’s Bargain Basement Training Emporium”.
I also know something about myself that others might not be so quick to admit;
I won’t be excited about doing work for you if you aren’t paying me what I’m worth!
If I’m not excited about doing work for you, I have no business taking you on as a client.
Which leads us to . . .
With the exception of a handful of people in 3 1/2 years of owning my business; 3) I’m hardly ever asked to lower my price. By the time I’m in front of the bulk of my opportunities, my prospect is 95%-98% sold already because of the amount of content marketing I do via this blog, my podcast, my social networks, YouTube and the communities I manage like my LinkedIn group, Facebook Fan Page etc.
By the time we talk about my services, I’ve demonstrated my expertise and value via my content and there is a high level of trust.
And I guess we could add a fourth reason . . .
Call me standoffish but if I know negotiation ISN’T an option and I’ve predetermined it as “Out of Bounds” then I’m forced to be a damn good sales person vs. the cheapest!
Helping people reduce pain and embrace opportunity typically comes with a higher paycheck!
Your Turn . . .
Where do you stand when it comes to lowering your price? Are you willing to negotiate or do you also stand firm on your pricing? Please weigh in with your thoughts.
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Its an interesting premise to take. I think culturally, I and most Indians are keyed in to negotiate almost about everything. Even my 10 year old son intuitively understands the concept of negotiation. So following a no negotiation policy is even more difficult in India than anywhere else.
That said, it is all the more reason to do so as a salesman. This differntiates you from your competition. Sure, in the beginning you might lose a lot more deals because of this but in the long run, you will make much more money doing this.
Thanks for reminding this Paul..
Great points about cultural differences Mukesh!
Thank you for pointing that out!
Paul,
I believe that negotiation is a two way street. In exchange for a lower price, you give me something I want; maybe greater volume, maybe a longer term contract, maybe we share some of the responsibilities, etc.
Negotiation is not a take it or leave it exercise.
I don’t blame customers for asking for a better deal as long as they understand that you get what you pay for. I have customers who understand that in order for me to give them my best, it has to be worth my time too. I have fired customers who seemed to think that I should be working for little or no compensation.
Cheers,
Marc
Thanks Marc!
I appreciate your thoughts!
Hey Marc,
I like your stance…always have since I’ve known you…I also agree with Uncle Paul…If you negotiate with your first opportunity then the Customer expects that’s the way of future business…negotiate for something you want for the deal too…as you say negotiation is a two-way street!
Cheers,
Larry
Thanks Larry!
For me it’s a “Do not enter” because I just don’t go there 🙂
Amen, Larry.
Interesting points, Paul. I am involved in teeing up enterprise software deals but not in the pricing or contract areas. Non-negotiation seems like a tough stance to hold, especially in the competitive world of IT and software. I support the benefits you’ve identified with non-negotiation. My question is how do you transition there without losing your shirt and possibly your job? Enterprise software is a high ticket item with relatively few annual deals, so you don’t have to lose many to have significant financial pain. I don’t believe you can just post a sign and flip a switch, so please help me understand what a transition might look like (outside of base jumping without a parachute). 🙂 I would be glad to share your feedback with my counterpart in the field.
I’m sorry Jordan, “transition” to what?
Transition to a no-negotiation approach to selling.
In total agreement with you Paul.
I own a service oriented company and hold that a professional is worth his wage. I will steer a price negotiation to a reduction in the scope of work, but never a reduction in quality. There are some people who are simply not my customers and I’m okay with that. We offer a fair price and will work with customers to an extent with payment terms or financing, but not to just lower our price for the same service.
There is a fair percentage of the population who understands price negotiation simply as the same service at a lower than quoted price. These are people who know the price of everything and the value of nothing. My customers are those who shop for best value and I will close those customers almost every time, even if my price is higher than my competition. It’s unfortunate, but there is a reason that bottom feeder contractors exist and they live off customers who only think in terms of dollars.