You need to sharpen your pencil!
I would if I used a pencil, I use a pen.
Negotiating is not a favourite of many sales people, but when it comes to negotiating price it seems to be even more stressful. Even more so when the person doing the “negotiating” for the buyer is really haggling. In their attempt to beat the price down as far as they can without much basis; we all understand that budgets are tight, but beating the seller into submission rarely accomplishes long term good. This is why as a seller you need to have a plan so you can remain objective, unemotional and clear headed to deal with the facts when you face this type situation.
The WOW approach allows you to make decisions based on what is best for the deal, your company and the buyer; allow you to look past the heat of the moment and make more solid deals you don’t regret in the morning.
WOW stands for:
WISH - OPTIMAL - WALK AWAY
WISH – Is simple to understand, but not always to get. Regardless of what you sell, this could be your list price, ‘rate card’, what have you. If you are in transportation, it may be the ideal price for a particular lane, the odd time you may get it, and that’s great, but usually you find you have to make some concessions. At times it is not a bad thing, you may do the load for a slightly reduced rate because the client is high volume, gives you multiple lanes, and you can make up for the concession on another lane, and in the end you are whole; other times you may have some inbound freight that will balance things, etc. Other times the client just wants a lower price because they know the market is soft and wants to take advantage of you, first time you give in you are on a downward spiral that neither you or your company will ever recover from, no matter what (promises or prayers). If you can regularly get your WISH price you are doing good, and likely not in an industry with heavy competition.
OPTIMAL – Is the price where things are at a balance where everyone can feel they are getting the best possible value. The true win-win where your company is able to derive margins that allow it to grow and continue to innovate and develop products and service need to meet client demands. The point where the client is getting full value, maximum ROI and a provider who is pleased to service and support the clients’ objectives. If you are doing most of your deals in this range, you are still likely facing negotiations, but they are of the sort that makes for good business.
WALK AWAY – Can’t make it any clearer than that. If the negotiations deteriorate to where the buyer will only buy if the price is at or below this number you have to WALK AWAY, no ifs, ands, or buts. You need to know this price before you leave your house in the morning, if you don’t, your beat before you even show up. You need to be able to take the emotion right out of the process, negotiate in good faith, but if it hits and crosses this line, politely WALK AWAY. If you don’t you are doing everyone involved and most of all you a disservice. This should be a conditioned response, once it goes below the predetermined level, WALK. It may seem hard at first, but as stated above, you will never recover and you will be stuck with a non-productive account that you will hate and that will always remind you of a weak moment.
Keep in mind that the goal is to work together with the buyer to achieve a mutually valuable deal. There are many ways to achieve that in a way that allows you to maintain price integrity and the respect of the client. But if the client does not respect you enough to find that mutual point, you should not think twice WALK.
What’s in Your Pipeline?