Credible Threat
Yes, salespeople are notorious for not being natural negotiators.
Happier to give the shop away to quicken or avoid any relationship-straining haggle rather than buckle down into a serious hard-nosed deliberation over the basis of future client-supplier relationship.
Another sales negotiation tidbit picked up lately reminded me of one of the chief offenders which make sellers cower away from ground-standing.
The situation I was privy to was post-sale. Sometime into the supply, an annual budgetary review triggered demands for a re-negotiation by one party.
A kind of take-it-or-leave-it ultimatum. Purely based on altering price.
The (smaller) side being asked to change (reduce) the financial arrangements were not happy.
They did not feel it was in keeping with the spirit and results of the relationship established.
As usual big guy wants more, little guy feels squashed.
Arrogance versus indignance?
A lawyer was called in.
They duly advised the party looking down the barrel.
Their central plank;
think about ‘credible threat’.
Is the supposedly dominant side really suggesting they rip up the partnership? Lose any previous benefits? Deny themselves the improvement from them further accruing in future? Go through all the trauma of changing-up (tip: switching costs in b2b supply are often examined, and can easily waste costs of 20% over and above envisaged outlay)?
Think what you’ve bought to their table. Maybe they dismiss such as chicken feed.
Is ditching you if you fail to comply really a credible threat?
Who would be most put out? What do they think?
How is what you’re doing making them look good? And bringing them cash rewards?
How would they like it if you sadly went elsewhere, which might happen to benefit their next, maybe as yet unseen, competitor?
You could call their bluff.
You may decide only clients that truly love working with you, what you do, and what you let them achieve ought be your sole focus.
Waverers you must wave bye bye.
It could be merely the aggressive opening shot in a price negotiation.
As in this case, the lawyer believed any move by his client to instigate breach of contract proceedings would swiftly lead to initial position pullback and compromise offers.
As I’ve blogged before, the biggest single improvement any salesperson can make to their negotiation skills is to stand your ground.
Whenever asked for discount, show incredulity.
You gonna make/save them tons, yet have the audacity to expect to pay less than the going rate?
‘You’re kidding, right?’
After that, being on the look-out for and knowing what is or is not a credible threat will take you the level above, for which your commission cheques will surely thank you.