1. You must be the buyer’s #1 choice

This goes back to an earlier post wherein I spoke about differentiation. In that post I quoted Tom Reilly:

Value added salespeople sell three things—the product, the company, and themselves.

Step #1 is similar in that it states, “If you are the number one choice, it is because you have put in a superior sales effort and proven that you are the best solution; therefore, you should command a price premium. Never enter into a negotiation without knowing you are the Buyer’s #1 Choice.”

2. Know the financial benefit your solution creates

This has been a struggle for digital sign software companies for sometime. Struggling to show an ROI is quickly becoming obsolete. However, if one is unable to show the financial benefit the solution produces, “you will be forced to defend your price rather than focus the negotiation on the value your solution provides.”

3. Anticipate getting the squeeze on price

Ron Hubsher states in the book:

“Price negotiation is not cost justification. If you are the Buyer’s #1 Choice, your buyer wants to buy from you. The next question is, “What is the lowest price I can get it for?” Buyers will try to squeeze you on price. You must be prepared to resist squeezes by refocusing the conversation on the benefits of your solution. By refocusing on the benefits of the solution, you are giving a polite ‘no’ to their request for a discount and offering them a face-saving way to agree to the sale.”

4. Remove decision making obstacles and be proactive on budget

“If you know the budget and decision-making process, you can proactively remove obstacles that you may encounter and proactively get budget allocated from the current budget and future budgets so that you can command price premiums and get your full asking price–or better.”

5. Use non-monetary “trade-ups” to expand the pie

Using a non-monetary trade-up is a great way to avoid price negotiation. Giving non-monetary value to the buyer which are low cost to the provider aids in the process of sales.

“You have the opportunity to increase the value you deliver to your buyer and at the same time create more value for yourself as well. You can do this and still maintain a price premium by creating a set of non-monetary trade-ups.”

6. Never give without receiving

“‘Never give without getting’ is a fundamental of negotiation. If you give without getting the buyer will perceive that ‘give’ to have little value and it will have set you up for future discounting with the buyer on future sales opportunities–as well as encourage him to ask for more discounts on this sale.”

7. Know your “walk away” price and conditions

“When you are prepared to walk away, the buyer knows he has gotten all he can out of you. It also allows the buyer to rethink his position and consider the poor alternatives which may occur by not completing a sale with you.”

Some great pointers here from Mr. Hubsher. For more information, or to buy the book. Visit his website.