This was a question posed on a sales & marketing forum I wandered into the other day. I had a few moments, so typed an answer away to help the fella, called Bjorn. I was delighted when he later awarded my experience as “best answer”. Thanks fella! Here it is:
The cheeky clichéd answer is “never” 🙂 A lot depends on whether you are making a usp of cheapness. If not, then the most successful reps I meet all defend their quoted prices vigorously. The longer they stick to talking about why any perceived premium is worth the extra, the more likely they are to succeed.
In addition, there’s common recognition that you only mention your figures once asked to by the buyer, and even then it can pay to be a little vague, as no-one ever buys a “price”, they should really focus on whether the offering is right for them first.
When someone negotiates with you on price, the chances are high they are interested. If you are a single bidder, then any price reduction MUST be conditional on something else going your way. Delivery times, longer-term commitment, payment terms, the list is endless.
In competition, should you establish you’re not merely being used as a stick to beat up a preferred alternative vendor, then where you are the dearer, it’s always worth planting such seeds as “what happened last time you bought the cheapest?”, “when you bought the last thing similar to this, did you buy the cheapest?”.
And here was Bjorn’s response:
Thank you for answering! Good to read that you keep the exchange principle in mind when dealing with (price) negotiation. I often see salespeople split up the pie in more pieces for them or the client, instead of making two, three or more pies.
Good sales to you!