Every negotiation argument has one vulnerability. The weakness lies in the spot that threatens the achievement of any one of your goals based on a real or perceived vulnerability in your argument. When planning for a negotiation it is wise to consider your weaknesses and plan for effective responses.
The concessions that one offers should be non monetary so that it does not sacrifice the price of the product. If the client will not accept a non-monetary concession than it may be necessary to give a price break your treatment of concessions will determine your success or failure in a negotiation and long-term relationship building. Despite your best attempts to sell value and remain firm on your price, some clients will press ahead with their request for a discount. After a solid attempt from you to reassure them that your price is fair, if your prospect is still pushing for a discount, you have a choice. Walk away from the business because you want to maintain your price or slowly start to give concessions in an attempt to win (or save) the business.
If you want to give concessions, following a simple system will ensure a profitable negotiation.
1. First find something else to give up that does not reduce your price like free shipping, extra manuals or training. The key is to have the list of things you are willing to offer prepared in advance, so you can draw on it during the negotiation. It is hard to think creatively in the heat of a negotiation, so planning ahead can give you a ready-made solution that leaves both you and the client feeling satisfied with the transaction. Your goal is to maintain the price integrity of your product while delivering extra value to the customer with a service that does not cost you anything or very little.
2. An unconditional money back guarantee, future discounts based on volume, a gift certificate for them to use later etc are good options. Some of your customer will take you up on the offer to provide a non monetary concession. The other half will continue pressing for a price discount because in today’s marketplace it has become all too common for one supplier to attempt to trump all others by lowering their price.
Never reduce your price without getting something in return. Getting something in exchange for a pricing concession is key to managing customer expectations that future discounts will not be easily dished out. It could include references or case studies, a bigger order, introductions to senior level executives or cash up front, etc. Again, whatever you ask for, prepare the list in advance so you can respond quickly and smoothly.
The best is finding better clients - ones that focus on value and not price - is making sure you are 100% confident that you are delivering such a high value to the marketplace. When you do believe this, you will not have any trouble asking for something valuable in return for your price discount. Creating equality in your client relationships ensures that you will have a long lasting trust based relationship.