What are some responses to tactics used by buyers trained in formal negotiation?
• Budget limitation tactic: Is the buyer telling the truth or testing your price? Take the budget limitation seriously and use appropriate negotiation strategies. Reduce price by unbundling, or eliminating some items.
• Take-it-or-leave-it tactic: When buyer says "take-it-or-leave-it?" You can lower price, but this would reduce company profits and your commission. Confidently review the superior benefit of your product and make another closing attempt. Appealing to the other person's sense of fairness may move the discussion forward. If final offer is totally without merit, consider calling a halt to the negotiation to allow the other party to back down from his position without losing face.
• Let-us-split-the-difference tactic: Salesperson might find this price concession acceptable, if not, the salesperson might make a counter offer.
• "If...Then" Tactic: "Unless you agree to a price reduction, we'll have to look elsewhere." Response depends on balance of power conducted during preparation. If buyer has a number of options that offer same benefits as yours, you may have to concede. If your product offers clear advantages over the competition, then you may be able to resist the challenge.
• "Sell Low Now, Make Profits Later" Tactic: "If you can reduce the price, I will give you all my future work." This may be a genuine statement and may give you a foothold in your buyer's business. You might respond with "I am unable to discount, however, if you do give me this job and future jobs, I will discount your future work." This can create value for both you and your customer.
• Plan negotiating strategies in advance and have clear goals. Decide in advance on the terms you can (and cannot) accept. It is important that you have the authority to set prices. Buyers want to do business with someone who has decision-making authority.