Recently, a post on LinkedIn proposed a scenario, with the author soliciting opinions as to how one would solve the challenge. The situation is pretty simple, and here is a summation: The salesperson works on a deal for months, and the client tells them they are the preferred partner. The salesperson has been clear on the investment from the very start, only to show up to get ink on paper to have the client ask for a massive discount.
The responses from readers can fall into several different categories, none of whom recognized or acknowledged the tactic being used, indicating the general lack of negotiating training when we provide B2B sales training.
You Suck at Sales
The most significant number of responses (including by word count) were critical of the hypothetical salesperson, believing that the salesperson did something wrong, even though there was nothing in the fact pattern that could have reasonably led them to that conclusion.
Some respondents suggested the salesperson was delusional, didn’t have the right decision-maker, positioned themselves as a commodity, lacked a solid value proposition, was unclear on the pricing, didn’t demonstrate the return on investment, did their job wrong, or used a sales process that needs an overhaul.
While any of these things may be true, there is no evidence, even though no evidence of an error isn’t evidence of no error. These answers focused on criticizing the salesperson and not solving the scenario. None of these responses offered any advice as to how to respond.
Several responses proposed merely walking away, with a few being insulted by being asked for a massive discount. There is no reason to walk away from a quickly recognized negotiating tactic. The problem is that we no longer train salespeople to negotiate while purchasing professionals and buyers taught to acquire deep concessions using strategies unknown to almost all salespeople.
An ask for a massive discount is not something that should automatically be responded by a view of you getting up from the table and walking out of the room. You can’t be a peer, consultative, or a trusted advisor by being offended or intimidated by being asked for an outrageous concession, as childish as the request may be.
These answers don’t recognize the request as what it is, a negotiating tactic. There is nothing to suggest a deal isn’t possible. There is nothing to indicate that the client isn’t prepared to pay the full price.
Ask the Client to Justify Their Request
Another category of answers can fall into the category that believed the salesperson should begin by trying to understand why the prospective client needs the discount now. Many solutions center on challenging the client with the question, “What changed?” or “Why are you asking for this discount now?” You may know this as the “I’m confused” approach.
There may indeed be a reason that the prospective client needs the discount, but their need for a massive discount doesn’t change the economics of your solution, nor does it change the value it creates for them. People who spend money on behalf of their company generally try to do what is right for their company, asking for a discount, mostly as a way to ensure they aren’t paying more than necessary.
You may do as much harm by asking what changed as good. By asking the client why they need a price concession, you can sometimes create the belief that there is some valid reason that would allow the client to ask for a massive discount, something that does little to improve your position in a negotiation.
You would much better served by saying, “No” and remaining silent than to try to argue your way to avoid a price concession at the five-yard line.
Restate the Value of the Solution
You get much closer to an effective response when you restate the value to the client, addressing the things that compelled them to explore change in the first place, reminding them of the better future your solution is going to provide them. This category also includes responses that suggested that the salesperson the price by reducing the outcomes, another strategy that can prove effective, as it allows you to justify the delta, the difference between your price and your competitor’s price, or what it costs your client.
Most salespeople can do reasonably well by just knowing how to have the conversation these respondents recommended. But there are still other choices, but to understand what they are, you’d have to recognize the tactic the client is using.
Breaking the Anchor
The person setting an anchor in a negotiation is determining where the bargaining starts, in addition to gaining the advantage of shocking the person with whom they are negotiating, especially an unsuspecting salesperson who believes they already have the deal locked up. Not only does the salesperson, their sales manager who likely wants—or needs—the deal as bad as the salesperson.
The large number creates a response and to ensure that anything the client gives back is more than it would have been otherwise. Most salespeople will very easily split the difference, giving back some number close to fifteen percent, even though it isn’t necessary—and a concession isn’t a negotiation.
All of the people offering their advice didn’t recognize the tactic as an anchor, again, because we don’t train salespeople to negotiate. This tactic is no evidence that there is no deal possible here; quite to the contrary, it’s almost certainly there is a profitable deal for both parties still available.
There are several strategies and tactics available to you, many of which might work to protect the investment you are asking for and ensuring you and your client both succeed.
When someone provides an anchor, the best response is to break the anchor, making the prospect give up their starting point. Negotiation training would help salespeople recognize tactics designed to elicit larger concessions and better position them to prevent their clients from underinvesting in the results they need.
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Filed under: Sales