6 Golden Rules for Negotiating Money with Prospects
A common challenge for many B2B Sales People is negotiating money and budgets with prospects or clients. Indeed often times Sales People struggle to even discuss money in the early stages of a sales enquiry, let alone in a boardroom with Senior Level Executives. This discomfort around talking and negotiating money is neither healthy or a productive recipe for successful selling, and in some cases can ruin sales careers. There can often be many different reasons causing the discomfort and unfortunately like everything in sales the answer is never simple. We have however developed some rules that have helped clients over the years as follows:
1. Fix your own head – It’s easy to think your prospects have the exact same beliefs about money as you. They might, but usually they don’t and they know that you are not offering your solutions and services for free, and more importantly they are expecting to pay for it. Remember if you don’t believe what you sell is worth it, you are going to have to be a really good actor or your prospects will “sniff you out”. Your mind set should be “this is the best xyz ever and you would be nuts not to buy it at this price”. Remember this is your mind set, we are not advocating you say this. The minute you don’t believe your xyz is worth it, then when the buyer says “that’s too much” you will subconsciously agree, and are unlikely to successfully handle the objection.
2. Beware the savvy buyer – the easiest way for any buyer to get rid of any sales person is to tell them they have no money. Don’t believe this – every buyer has money, this is just the first step in them negotiating money. If the buyers toilet flushes, if their office lights are on they have money. Our job as sales people is to “convince them” of the value they will receive by spending their money with us.
3. Be up front – Be honest, authentic and don’t be afraid as negotiating money is a natural part of the sales process. If you cannot give specific costs then give indicative costs to help manage expectations and in the event your pricing is not aligned with the prospects budgets, qualify the opportunity out politely and respectfully. It’s better to know sooner rather than later if there is no fit so don’t waste your time and that of the prospect.
4. Price Conditioning – Prospects and buyers can become price conditioned, for example if they have been buying a similar solution or service to your for the last 2-3 years at a certain price. Double the price for the same service for example is for many buyers too much of a leap, and they struggle conceptually to retain the connection between price and value. It is still possible however to sell your services and solutions to buyers at a higher price, just be sure to establish what would need to be different about your services that would help the buyer justify the higher price.
5. No budget means no sale – or does it? – Corporations are typically working to internal budgets which have been derived from Improvement Plans that are aligned to the corporations strategy. On the surface when things aren’t then budgeted for they don’t happen. Whilst in most cases this is true, in some cases the buyer could be contacting potential solution providers to establish costs before applying for the budget. It’s important to establish which scenario you are facing as this at the very least, will change the timescale and next appropriate steps.
6. Walk away – Not every prospect and buyer is a good financial fit for your business and it’s better to walk away from poor prospects, than try and shoehorn them into a product or service, or even worse drop your price to fit. You are unlikely to make the sales and more importantly if they become overdue on their terms, or even worse don’t pay, you will only regret “helping” them.
If you need help negotiating money and budgets then by simply adding Budget to the agenda on your first meeting helps start the money part of the sales conversation with any prospect. Like sales people, buyers are also very busy and they are equally keen to talk about budgets and make sure their expectations are aligned with sales people. Whilst the context of our Golden Rules is within new business development the rules equally apply when addressing price increases for existing customers as part of account management.
Get the Harvard Business Tool that CEO's use to Drive Sales & Dominate Their Market
- Next Generation Sales Enablement - 20th December 2017
- Sales & Marketing Graduates Deliver Real Value - 16th March 2017
- The Smarter Way to Sell More - 21st February 2017
- Why Choose You? - 21st January 2017
- 3 Lessons Every Business Can Learn from Candy Crush - 21st December 2016
- 5 Reasons Sales Pitching is NOT Selling - 7th November 2016
- How to get the Most from Sales Graduates - 24th October 2016
- Getting the Most from Sales Training Programmes - 10th October 2016
- How to Improve Sales in any B2B Sales Organisation - 26th September 2016
- How to Stop Competing & Still Win New Business - 7th September 2016