4 Tips to Successfully Negotiate B2B Deals
Many B2B sales are done with a direct sales force that negotiates with procurement agents. Procurement agents are MUCH better prepared to negotiate than salespeople. They have most of the information. They know what decisions the buying committee made. They know the budget and competitors pricing. In fact, the only thing they don’t know is the lowest price you are willing to accept. That’s the one data point they really want to know.
They read every action as a signal of your willingness to accept, or what we can call WTA. When you look desperate, they know you have a lower WTA. Offering big discounts quickly looks desperate. You must, must, must be patient.
Imagine Scenario A
Procurement asks for a 20% discount. You’d be thrilled to accept that deal, but you think you can get more. You go back in with a counter saying, “the best we can do is 10%”. What do you think procurement is now thinking? “I’ll get at least 15%, probably more.” They probably will too.
Imagine Scenario B
Procurement asks for a 20% discount. You’d be thrilled to accept that deal, but you think you can get more. You go back in with a counter saying, “the best we can do is 2%”. Now, what do you think procurement is thinking? “I’ll probably get about 5%.”
Remember These 4 Tips For Successful Negotiating
- If you have to offer discounts, start small and go in small steps.
- Make every discount look like the best you can do.
- Don’t respond quickly.
- If you want to win deals at higher prices, you have to look like you’re not willing to accept a low price, even if you are.
Business is not a zero-sum game, but price negotiations are. Every dollar you discount is one the buyer gains. This is possibly the only time the buyer and seller’s interests are not aligned. You have to learn to play the game like you’re playing poker; hide your cards, bluff, don’t give away your position. If you want to win at higher prices, you must look like you’ve given all the discount you can, each step of the way. This can only happen when you’re patient.
Patience definitely wins when it comes to negotiating!
Mark is a pricing expert who helps companies understand value, how to create it, communicate it and capture it. He has a PhD from U.C. Berkeley and an MBA from Santa Clara University, plus 25+ years pricing experience. As an educator, speaker and coach, Mark applies innovative, value-based pricing strategies to guide growth and increase profits for large and small companies.