Today’s uncertain and volatile economy is challenging the relationships we enjoy with our clients, especially when we must have ‘that difficult conversation’ about increasing our prices (yet again!).
We have found that many Account Managers and Sales Professionals find this both stressful and uncomfortable. Increasingly, these conversations are late, and may not even be delivered in person, with organisations often choosing the weak option of informing their customers through email, and crossing their fingers that there will not be any reaction.
Inevitably the customer pushes back, possibly threatening to take their business elsewhere. The result is that the Seller caves in ‘to keep the customer happy’-rarely a text-book ‘Win-Win’ outcome.
At RLA, we have developed a robust Negotiation Skills programme which will equip your team with the tools and techniques to both maintain profits and harmonious relationships with customers.
So, what are our Top 13 Tips for Account Managers/Salespeople?
- Have the conversation as early as possible. There should be no surprises. Give your customer time to ‘come to terms’ with the price increase.
- Have the conversation face to face (ideally at their venue), rather than virtual/telephone and definitely not by email. Visiting the customer tells them that they are important, and demonstrates both respect and professionalism.
- Plan and Rehearse what you are going to say. Don’t assume the customer will understand why you put your prices up without a robust explanation and justification.
- Forget about ‘Aiming High’ and starting off with an inflated price, planning to meet the customer in the middle. Your audacious initial price may scare them off and blow your credibility and trust.
- When you visit them, get to the point quickly and concisely. Don’t waffle and waste their time. Look and sound confident. Look them in the eye when you present the price.
- Don’t imply that the price is open to negotiation by saying things like ‘We need to agree on the price’, ‘we need to discuss the price’, ‘we need to negotiate the price’, etc. All of these suggest that the price is already movable. State ‘Our price is £XXXX’ not ‘it’s in the region/ballpark of £XXXX’. Be firm from the outset.
- Once you have explained and justified the price increase, Shut Up! Let the other party digest what has been said.
- If the customer reacts, remind them of the value they are getting from you. Don’t forget your Unique Selling Points if they mention your competition. Rarely are they comparing apples with apples.
- Think about your Bargaining Chips. Negotiating is all about trading concessions/bargaining. Think about what is low cost to you, and potentially high value to your customer (such as value-adds like credit terms, enhanced service levels, training, support, lead times, etc.) and what is low cost to your customer and high value to you (such as payment in advance, longer contracts, referrals, a bigger share of the wallet, etc.) The Golden Rule is that if you offer something, make sure you ask for something in return.
- Another Price = Another Package. If we must reduce our price, we need to change the package in some way (i.e., take something out)
- Don’t be afraid to ask for some time to develop a creative solution.
- Be prepared to walk away if you feel that you can’t find a mutually acceptable solution/compromise.
- Hold your nerve. Maintain an aura of calmness. Focus on your breathing if you are feeling any anxiety.
RLA Sales Negotiation Masterclass builds a Negotiating Toolkit guaranteed to help your team improve their revenues and profits.
‘In life, you don’t get what you deserve; you get what you negotiate.’ – Dr. Chester Karrass.
