Laying the Groundwork for Successful Sales & Negotiations
Do I need to give a discount?
There’s a lot to cover here. What we’re talking about is the intersection between sales and negotiation which are indissolubly connected. If you’re selling almost anything there will come a point when you enter into a negotiation about what you’re charging, what you’re delivering, and the quoted price. (If you're interviewing and are being offered a compensation package, you will be the one to initiate this negotiation. And, I hope you do!)
What are the best practices to avoid cutting into your profitability with discounts?
If you’ve read any of my previous “Worth More” newsletters, you know I hammer on the topics of trust and integrity. The reason is that if you’ve done the work to earn trust and always approach your clients and prospects with respect and integrity, you’re already halfway there.
The importance of trust cannot be overstated.
Trust is won in very specific and consistent ways. And lost in myriad ways. For example, sellers often get caught in “half truths.” Maybe over lunch or a casual conversation–usually not in a more formal setting of an office meeting, though it can happen there, too. They slip and say something they shouldn’t. They may name drop a competitor they work with to impress. They don’t realize these clients know each other and can verify if you’re saying the same things to both of them. They can find out what each is paying you, what their proposals or contracts include and exclude.
It may not be what you say, but how you say it that raises red flags.
You may literally be telling the truth but in a haughty and condescending way. Both you and your company become repellent, as opposed to attractive. You want to attract! It is a learned discipline to hear yourself the way others hear you–to see when you give off signals that cause suspicion or are just smarmy.
No one intends to be smarmy!
They are doing something else, trying to exude confidence or authority or whatever they think is needed in the moment. But it comes off wrong. A HUGE topic! Think of all the disagreements and arguments that happen because people don’t understand each other and take things in a way that was not intended. Skills in this area are of the utmost importance for sellers and negotiators. And they can be learned!
That said, if you’ve already established yourself as a trustworthy advisor whose word can be counted on, fantastic! You want to keep that impression strong. When you have trust and you present your proposal, the client will naturally see that you have their best interest in mind–because you do! They will trust you are bringing a fair offer. They’ll take your proposal at face value. I’m not saying they won't ask for a discount. They may. But the request is usually less forceful and easier to manage when they already believe you.
On the contrary, if you DON’T have a solid rapport, it’s likely your client will test you. This is especially so with new clients. They’ll ask for a lower price or more deliverables or both! They may push. Hard. In my coaching programs, we prepare for this. It’s not bad or wrong or an indication of their dislike for you or your offering.
So do not get angry or dejected!
This kind of pushback may very well be a way to find out if they can trust you. A way to see how your first offer compares with your best offer. This is reasonable, acceptable, and an expected business practice–don’t let it throw you!
How deeply to discount and what elements of your proposal should be removed if you choose to discount (and there should ALWAYS be removals) is not a one size fits all answer. I would look at many elements of your specific situation; your business, your client, your competition, your profit margin, and your goals before advising on this.
Again–and as a foundation for everything that follows–I underscore the importance of building trust, working with integrity, creating a rapport of consistent reliable service starting with your very first contact. I’m here to help!
Comments