Have you ever been in a tough negotiation when on holiday? Price negotiations about a bag or a piece of handicraft often end up in an endless debate about the price until both parties agree. We see the same happening in B2B sales. There are several ways to avoid these situations of bargaining.
When you ask the salesmen on the craft market in Bali what he wants for that beautiful bag, the game begins. He asks 50 dollars, and you know it’s way too much. So you start to open the negotiation with a 15 dollar bid. Then it begins. When you have traveled across the globe, I am sure you have faced a situation like this. The remarkable of such a conversation is that it happens in B2B sales too. But you can do a lot to avoid bargaining with your customers. Here are the tips for doing so.
Built a relationship
When you are planning to sell something, you must start building a relationship. Compare it with the salesmen in Bali on that craft market; he tries to build a relationship by asking questions where he shows his interest. Where do you come from? How long do you stay here? What do you think of Bali? Do you have children?
The same goes up for B2B sales. A good deal has never been made without a good relationship. When you invest in a relationship with a customer, it will be more likely that he thinks that you deserve the deal. Automatically, it will decrease the risk of bargaining when your transaction is in the closing stage.
”A good deal has never been made without a good relationship.”
CEO of Sales
Demonstrate your added value
If you can deliver something unique, there’s no need for a customer to question your price. But when you are in Bali, and you would like to buy that bag, you know that there are hundreds of shops selling the same, so you start bargaining.
It’s no different in B2B sales. Understand the Unique Selling Points (USP’s) of your product. Know exactly what distinguishes you from the competition. When your customer starts bargaining, counter back with your arguments. Make sure you stand out.
Deliver unique insights
Give the customer a reason to choose you. Let’s go back to that salesman in Bali. If he has some very great tips for you to explore the island, you may think that you need to give something in return. In other words, you likely become less brutal in your negotiations.
In B2B sales, it’s no different. Give your customer valuable information. Be a trusted advisor. Show unique insights. The customer won’t start bargaining if they see you as relevant to his organization.
Give your best price from the beginning
Experienced tourists know that their first bid should be around 30% of the opening price when buying on a local market. So if the salesman in Bali comes up with 50 dollars, we all know that this is not his best offer. So, we start bargaining until both parties believe they have the best price.
This method of negotiating is commonly accepted in touristic areas, so it’s ok to do so. But when you do the same in B2B sales, there’s a high risk of not being seen as credible.
When you start quoting, be realistic. When the customer begins bargaining, you should be highly convinced that you gave him the best price. It’s ok to give a few % discounts when they give something in return, but never ever give discounts of more than a few % without a good reason. When you give discounts of more than 20%, the customer won’t take you seriously anymore, and he will likely doubt if you are the right supplier to start a partnership. And he might be right…
Bringing it all together, what are your experiences with bargaining? How comfortable are you in your negotiations? Do you have tips or other insights? Share them with us!
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