You’ve done it. You found and qualified a prospect who could genuinely benefit from your product or service. Through your sales meetings, the prospect now agrees that your product is the best match for their organization and goals. They want to sign a contract! While this is all exciting, experienced sales reps know that the sales process isn’t over yet. Now you’re in the dreaded bargaining stage.
The Bargaining Stage
The bargaining stage is one of the parts of the sales process that reps hate the most, and for a good reason. You could have found the perfect match for your product or service only to have it fall through if the prospect has unreasonable expectations for how much they should pay for it. According to a previous SalesFuel blog post, based on data from HubSpot, prospects may push back against your price based on:
- Your competition’s lower prices
- A lower perceived value of your product than you anticipated
- The cost they’ll be paying to switch to your product
Katrina Kirsch, writing for HubSpot, says that understanding the bargaining stage is the key to overcoming price objections. “… If you approach it like any other skill, you’ll improve your ability to strike a deal that works for you along the way.”
How to Bargain
Before you can enter the bargaining stage, you need to know:
- Your needs
- Your prospect’s needs, interests, values, and must-haves
In fact, Kirsch says that, “the work you put in before a negotiation is often more important than the act itself.” Doing your research beforehand gives you a clear picture of what both you and your prospect are hoping to walk away with at the end of the negotiation. Knowing that will help you set the boundaries of how low you are willing to drop your price, the add-ons you’re willing to include, and an estimate of the terms your prospect is willing to accept.
What to Know About Yourself
Specifically, you need to go into the bargaining stage with a clear best alternative to your initial asking price. You need to know the lowest you’re willing to go and the most you’re willing to give without cheating yourself of what you know you deserve. Know your product’s worth and don’t sacrifice too much just to land a sale. If the sale doesn’t benefit both you and the prospect, it’s not a worthwhile endeavor.
What to Know About the Prospect
If you're unclear about what the prospect hopes to get from the bargaining phase, just ask them. It never hurts to be direct with your prospects. Krisch recommends asking a question along the lines of, “What are your top must-haves for this agreement?” If the prospect has must-haves that you don’t fully understand or feel you can agree to, ask another question: “Can you explain why [insert top must-have] is a non-negotiable for you?”
Once you pair your prospect’s must-haves with what you’re hoping to get out of the bargaining stage, you’re ready to negotiate. “The veil of secrecy makes the bargaining zone tricky to navigate,” says Krisch. Take the mystery out of the picture and you’ve just made what may have been a dreadful process that much easier on yourself. Now you’re ready to strike up a deal that will leave both you and your prospect walking away from the sale satisfied.
Want even more insight to take into your next negotiation? Download a free chapter of the Sales Cred book authored by our CEO, C. Lee Smith.
Photo by PeopleImages on Unsplash
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