Counter your Customers’ Negotiation Tactics
It is amazing how many concessions you make when flattered. It feels so good to be praised that you want to thank the person, and what better way than to give them what they want. Resist it politely and stay firm.
Customer: Would you do me favor? Just add this survey question? I’d do it myself except that you are so much better at it than I am.
You: Thanks for that. Normally I’d be happy to do it, but unfortunately it’s too late; the survey has gone to printing.
Watch out for the “Poor innocent me” ploy, sometimes used unconsciously. Empathy again wins the day, when teamed with firm resistance.
Customer: This has been the week from hell. I’ve had extra projects dumped on me, my wife is having surgery Monday and my car is in the shop as a result of an accident. Could you do me a big favor and give me X?
You: Believe me, I know exactly how you feel. I’ve had days like that, too. I wish I could help but we have already agreed on X.
You have come to an agreement, have it documented, perhaps even ratified and all that is left to do is get signatures. With pen poised to sign, your customer pauses, points to an item, usually the price, and says “How about knocking another 5% off and I’ll sign this immediately?” From where he sits, what does he have to lose by escalating demands? In your haste to close, you just might cave in. The correct response here is simply “No”.
If you want to disagree with your customers, mention your reasons first (or they may not get listened to). If they are accepted, you may not have to point out that you disagree. To make your point use benchmarks, such as standard operating procedures, or professional standards rather than opinion or speculation. Don’t rebut every point your customer makes, even if you are convinced your customer is wrong. If you feel that you must launch an attack on your customer, do it abruptly, rather than building up to it in a way that allows them time to develop a counter attack.
Customers may try to get a lower price by asking for a breakdown of your system’s components, and then trying to negotiate a lower price, component by component, or by putting out to bid individual components. Similar to the escalating demands tactic, at the last minute, the customer tries to return to an item agreed to earlier and tries to open it up again for negotiation. The hope is that by creating confusion, they will be able to get a better deal on the current item.
Customer: You guys are tough. This is still more than I would like to pay. What is the breakdown; how much do you pay for labor? How much for overhead? What if I bought …?
You: Mr. Customer, I’m confused; earlier you agreed on the total budget and that it represented outstanding value. By your own calculations, you expect a 10:1 ROI. And that’s what really important here, isn’t it: not my costs. So, what day is best for your kick-off meeting, Thursday or Friday?”
Escalating Authority is a classic tactic that attempts to get you to make concessions, especially on price, by claiming that your proposal has to go to a higher level because it is 10% or 5% higher than the “company guidelines.” The hope here is that you will be reluctant to in effect start all over again with someone else and will make the concession. The “company guideline” might well be fictional.
“What if I bought …” is a tactic similar to the escalating demands tactic. At the last minute, your customer tries to return to an item agreed to earlier and tries to open it up again for negotiation. The hope is that by creating confusion, she will be able to get a better deal on the current item.
You: Ms. Customer, sorry, but I’m confused. We agreed to that item yesterday, and in fact, at the time you seemed to be pretty pleased with the solution. Has something changed? If not, lets move on; we’re on a roll here.
Walk away and wait is another effective tactic when your customer senses you would like to close as soon as possible. Your customer abruptly brings the meeting to an end, without responding to your proposal. Your phone calls are not returned, no email, sometimes for weeks. The hope is that you will assume that your price is too high, and when you eventually re-establish contact, that you will have already lowered it. Be patient. Stay in touch, continuing to show your interest but not your anxiety, in resolving the issue or closing the deal. Conversely, don’t immediately make a counter proposal when your customer makes an offer. Remember everything is negotiable, including arbitrary deadlines for a response