I know... perish the thought that we actually "sell" on price. Many so called "experts" will say "I never sell on price". But what if it really gets down to the fact that "price" seems to be the only difference and you feel you have no other options. Or, let's consider the fact that sometimes we have a "price" advantage, so it might (on occasion) be worth using low price as a strategy.
Before we "go there", first decide if you have exhausted all of your options? Do you know why you are worth more and have you created a "value translation strategy" that gives you an advantage? Have you done a good job of managing and controlling the call in a way that helps you "create difference" and helps you avoid the "feature benefit trap"? If not, your selling strategy may actually be leading you to the price objection (see other "sales strategy" posts)!
Have you explored all of the other advantages your customer gets when they buy from you that are not product related? Can you split shipments, offer dating or extended terms, help lower inventory carrying costs or eliminate paper invoicing with electronic ordering? Make sure you think "beyond the product" to extract ever bit of value you and your company can deliver.
So for now, let's assume you've done a good job managing the call and you reach that "control point" where you have to decided to accept the "price only" option. It gets down to "the best price wins". You go in with your best price in hand (notice I said "go in" not send in!) and you make the offer knowing you have an extra 10% to work with... they're notorious for "grinding you at the end", so you're prepared with one more bullet. They look across the table with that steely gaze and say "you've got to do better"?
Offering to do better at this point is a huge mistake. If you give them your extra 10% now, every time you come in they have to say to themselves "based on the last situation I guess everytime I buy from this sales person I have to assume that they have not given me their best price". Your actions create distrust.
You're better off saying "I wish I could but I can't". How you say this is probably more important than what you actually say. It must be said quickly, courteously and without reservation. Your ability to respond immediately communicates to your prospect that because you answered so quickly and without the need to think about it, it must be true (we'll learn more about this "Subconscious Selling" in future posts).
Now, you will hear one of two things:
1. "O.K., I can accept your price (it was just a test (remember, they always lie!) or
2. If you can't get lower... you lose.
With the second response you know they mean business. Now, instead of dropping the 10%, first ask what they mean by lower... they might say 5%. But don't give in yet... tell them that you have already given the best price you are able to authorize, but that you would be willing to fight for them and try to get more. However, first they'll need to give you a purchase order at the price they want that you will take back and get approved. With a commitment from them like this, you're sure the company will be able to compromise...but they would be unwilling to compromise unless you have "paper"! Empty promises will never get fulfilled! If they're serious they should have no problem with this request.
What does this get you? First, credibility, they believe they got the best price up front so they are less likely to question your offer the next time. You've also shown them that you will go the extra mile for them. Plus, you didn't just "drop your price" giving them the opportunity to go back and use it against you with their current supplier!
When all else fails and they tell you it's price, make sure you know how to "manage to win"! This strategy gives you options and will let you make "the price only sale" with dignity!
Action Step: Learn the strategy and role play it with a co-worker. Remember, practice, practice, practice!