The Art of the Deal: 5 Things to Negotiate on Before Lowering the Price
It happens time and again: when sitting across from a potential customer, you’re asked, “Is there more you can do?” Instantly, many sales reps interpret this as a cue to lower the price in return to get a deal closed. But what if there were other levers you could pull to remain the deal integrity? Here are five key areas to negotiate before you touch the bottom line.
Payment Terms
One effective way to make your offer more appealing without lowering the price is to negotiate the payment terms. Offering flexible payment options can ease a client’s financial burden. Consider options like:
Installment Payments: Allowing customers to pay in smaller increments can make your service or product more accessible.
Defer Payments: By offering a deferred payment plan, it could help your customer with your budget cycles and overcome challenges for them with unforeseen expenses (especially if your product or services was not budgeted for).
Disclaimer: always check with your company’s deals desk and finance team to make sure there isn’t an impact to your compensation when offering special payment terms.
Add-On Products or Services
Including professional services (such as free installation or training) are excellent ways to enhance the overall value of the deal without compromising the overall price. You could also considering bundling in newer products or services as a way to “land and expand” for future business and it gives the customer an opportunity to try a product for an extended period of time that they might have wanted but could not include in initial negotiation.
Contract Length
The duration of the contract can also be a key negotiating point. If a customer is hesitant about the price, consider discussing:
Longer Commitment: Offer a discount or additional services for longer contract commitments, which can provide them with cost savings over time.
Trial Periods: Propose a trial period at the original price, allowing them to experience the value of your product or service before making a long-term commitment. This can become especially valuable to a client when you are trying to displace a competitive solution.
Volume Discounts
A great way to grow your deal size- and provide more savings to a customer is through volume discounting. If the customer is open to making a larger purchase, discuss volume discounts for buying in bulk. This allows you to maintain your pricing for smaller orders while incentivizing larger commitments.
Value Proposition
Never underestimate the old standby of reinforcing the value proposition: there is a reason you are negotiating… don’t forget it! You are solving a customer’s problem by delivering on a product or services. You can reinforce that value in a few ways:
Highlighting ROI: Clearly articulate the return on investment your product offers. Use case studies, testimonials, or data to showcase success stories that demonstrate tangible benefits.
Customer Testimonials or Case Studies often drive the point that your customer’s situation or problem has been experienced by others and by using your product or service, they were able to overcome that challenge. As a bonus, you can also see if your company will allow a “termination of convenience” clause in the agreement- this will reduce the risk for the client and can give you the opportunity to upsell more services with the reduction in perceived risk.
By expanding your list to include these additional negotiation points, you can create more opportunities to retain your pricing while still addressing customer concerns and enhancing perceived value.
Happy Selling!
