Your buyer wants the lowest possible price. You must protect value. Who wins? Wait. Could both end up in a winning position?
So often, when we think about negotiating, we think of it as a win-lose proposition. We don’t want to be on the wrong side of that objective. We can all agree that a win-win is a better outcome, but how would we do that when our customer is hammering away at a price? How can we both end up satisfied with the result?
Price is a critical factor in any negotiation. We know that. And sales professionals must be able to defend their prices and effectively protect the value proposition. So let me give you four tips for effectively supporting your value during a negotiation.
Value First, Price Second
It’s essential to clearly communicate your product and service’s value to the customer. But you already know that, right? The key here is to ensure that you only get into a price discussion once the inherent value is established in the customer’s mind. If the price discussion takes place before the customer has settled in on one particular home that they love, you’re going to lose.
Why? Because there’s no such thing as a great deal on a home that your customer only loves a little. So don’t get sucked into a price conversation until there is inherent value in a specific home and a specific home site.
Set the Price Anchor
I’m going to tell you right now one of the worst things we can say to a customer is the words make me an offer. Your customer doesn’t know how to make you an offer. So if you lead with that phrase, you’re asking for a lowball.
They don’t know the bottom price, so they’re going to come up with something silly. Instead, take the opportunity to give the customer some parameters to make an offer. For example, I can say to a customer, Should you choose to make an offer, that’s fine, but we want a realistic chance of getting it accepted. So let me just give you this advice. Be thinking in terms of thousands, not tens of thousands. Now that little strategy right there will set a price anchor in place. It will prevent the buyer from coming in with a ridiculous lowball offer.
Negotiate on Other Terms
Price is often a critical factor in any negotiation. It’s not the only factor. So consider negotiating on other items, delivery times, interest rates, payment terms, or something else of value to that particular buyer. Sometimes customers just need to know they’re winning on something.
Be Prepared to Walk Away
While trying to reach an agreement, it’s also essential to walk away if the negotiation leads to a losing conclusion. By standing firm on your pricing, you can show the customer that you believe in the value of your product and that you are not willing to compromise on the price. Sometimes that is precisely what a customer needs to hear.
At the end of the day, we’re looking for a win-win solution. Be proud of what you sell and stand firm in your negotiation. Help your customer to buy the right home for the right reasons.
Until next time, my friends, learn more to earn more!