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Negotiating Buyer Concerns

Selling TodaySelling Today10th Edition

CH

AP

TE

R Manning and Reece

13

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Six-Step Presentation PlanSix-Step Presentation Plan

1. Approach (Chapter 10)

2. Presentation (Chapter 11)

3. Demonstration (Chapter 12)

4. Negotiation

5. Close

6. Servicing the Sale

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Negotiation DefinedNegotiation Defined

• Working to reach an agreement that is mutually satisfactory to both buyer and seller

• Negotiation is a process

• Ability to negotiate problems or objections is a most effective way to create value

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Negotiation: A Win-Win StrategyNegotiation: A Win-Win Strategy

• Personal selling is not a “we versus they” process

• If trust is strong, negotiation becomes apartnership to workthrough, if not, negotiation becomes combative

• Seek to maintain long-term relationship

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Common Types of Buyer ConcernsCommon Types of Buyer Concerns

• Customers may have concerns related to:

• A need for the product

• Product itself

• Source of the product

• Pricing

• Timing

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Need for ProductNeed for Product

• Conditioned response: “I don’t need the product.”

• Sincere need resistance a great challenge

• Not convinced of your product’s benefits

• Best way to overcome—prove your product is a good investment

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The Product ItselfThe Product Itself• Product not well established

• Product will not be popular

• Associates did not like the product

• Present product/system is satisfactory

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Source of ProductSource of Product

• Ways to overcome include:

• Identify how product solves problems

• Superior benefits of your product

• Illustrate profits from adding second line

• Place trial order to evaluate merits

• Recruit champions inside buyer’s firm

• Stay visible and connected to client

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Price Concerns:Trained BuyersPrice Concerns:Trained Buyers

• Buyers trained in negotiation

• Budget limitation tactic

• Take it or leave it

• Split the difference

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Price Concerns:Low Price Strategy

Price Concerns:Low Price Strategy

• Transactional buyers seek low prices

• Empowered salespeople able to apply various discounts

• Downside, lower profitsand lower commissions

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Dealing with Price ConcernsDealing with Price Concerns

• Do clarify price concerns with questions

• Do add value, stress service

• Do not make price focal point

• Do not apologize for the price

• Do point out price/quality relationship

• Do demonstrate difference between price and cost

• Do not make concessions too quickly

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Price IcebergPrice Iceberg

• Price is only the tip of the iceberg; remind customer of value-added factors below tip

FIGURE 13.3

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Concerns Related to TimeConcerns Related to Time

• Also known as “the stall”

• Usually customer does not perceive benefits of buying now—or sees both positive and negative in product

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Customer ObjectionsCustomer Objections

• Customer objections are often requests for more information to justify buying decision

TABLE 13.1

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Negotiating Buyer ConcernsNegotiating Buyer Concerns

• Know value of your offering

• Prepare for negotiations

• Understand the problem

• Create alternative solutions

• Find points of agreement

• Know when to walk away

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Use a Negotiations WorksheetUse a Negotiations Worksheet

• See the text for the complete figure

FIGURE 13.5

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Specific Negotiation MethodsSpecific Negotiation Methods• Direct denial

• Refute prospect’s opinion or belief

• Be firm, not offensive, think win-win

• Indirect denial

• Acknowledge prospects as partly right

• Feel-Felt-Found

• “I understand how you feel”

• “Others have felt that way”

• “Until they used the product and found it quite easy and reliable”

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Specific Negotiation MethodsSpecific Negotiation Methods

• Questions

• Convert problem into need-satisfaction question

• “How would a 30 percent reduction in breakdowns affect your company’s profitability?”

• Superior benefit

• Acknowledge prospect has valid concern and focus on superior benefit

• Superior benefits should outweigh specific customer concerns

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Specific Negotiation MethodsSpecific Negotiation Methods

• Demonstration

• Discuss competitive advantages of your product

• Demonstrations overcome buyer skepticism effectively

• Trial offer

• Prospect tries product without purchase commitment

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Specific Negotiation MethodsSpecific Negotiation Methods

• Third-party testimony

• Neutral third-party testimony adds credibility

• Almost never triggers client argument

• Postpone method

• Postpone answers to client concerns until later in dialogue

• Explain why you want to postpone

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Application: Digital ElectronicsApplication: Digital Electronics

• Go to a consumer electronics store and ask for help with laptop/notebook PCs

• Raise a series of concerns and note how salesperson reacts

• Price is too high

• Heard that brand “XYZ” is bad

• Maybe it’s not time to buy