99THTH EDITION EDITION

CHAPTER 12CHAPTER 12NEGOTIATING NEGOTIATING BUYER CONCERNS BUYER CONCERNS

Manning and Reece

12-2

LEARNING OBJECTIVES Describe common types of buyer

concerns

Outline general strategies for negotiating buyer concerns

Discuss specific methods of negotiating buyer concerns

Describe ways to deal with buyers who are trained in negotiating

See details Figure 12.1. 12-3

SIX-STEP PRESENTATION PLAN

1. APPROACH

2. PRESENTATION

4. NEGOTIATION

3. DEMONSTRATION

6. SERVICE

5. CLOSE

12-4

WIN-WIN STRATEGYNEGOTIATION DEFINED

Negotiation Is A Process

”,,,working to reach an agreement that is mutually satisfactory to both buyer and seller. It involves building relationships instead of one-time deals.”

See Figure 12.2. 12-5

NEGOTIATION PLANNING LEADS TO ACTIONS

STRATEGIC STRATEGIC PLANNING FOR PLANNING FOR

NEGOTIATINGNEGOTIATING

ACTIONS DURING ACTIONS DURING NEGOTIATIONSNEGOTIATIONS

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COMMON TYPES OF BUYER CONCERNS

NEED FOR PRODUCTNEED FOR PRODUCT

PRODUCT ITSELFPRODUCT ITSELF

PRICE PRICE

SOURCE OF PRODUCTSOURCE OF PRODUCT

TIMING TIMING

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NEED FOR PRODUCT

Conditioned response: I Conditioned response: I don’t need the don’t need the

product product

Happy with current Happy with current productproduct

Not convinced of your Not convinced of your product’s benefits product’s benefits

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ABOUT THE PRODUCT

Product not establishedProduct not established Product will not be Product will not be popularpopular Associates didn’t like the Associates didn’t like the

productproduct Present product/system Present product/system

is satisfactoryis satisfactory

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SOURCE OF PRODUCT Ways to overcome resistanceWays to overcome resistance--Identify how product solves problems--Identify how product solves problems

--Superior benefits of your product --Superior benefits of your product

--Client profits by adding second line--Client profits by adding second line

--Place trial order to evaluate merits--Place trial order to evaluate merits

--Recruit champions inside buyer’s firm--Recruit champions inside buyer’s firm

--Stay visible and connected to client--Stay visible and connected to client

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PRICE CONCERNS—TRAINED BUYERS

Buyers trained in Buyers trained in negotiatingnegotiating--Budget Limitation Tactic--Budget Limitation Tactic

--Take-It-or-Leave-It--Take-It-or-Leave-It

--Split-the-Difference--Split-the-Difference

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PRICE CONCERNS—LOW PRICE STRATEGY

Buyers seeking low Buyers seeking low priceprice--Sales executives able to --Sales executives able to

apply various discountsapply various discounts

--Downside, lower profits --Downside, lower profits and lower commissionsand lower commissions

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DEALING WITH PRICE CONCERNS

Do add value, stress serviceDo add value, stress service

Don’t make price focal pointDon’t make price focal point

Don’t apologize for your pricesDon’t apologize for your prices

Do point out price/quality relationDo point out price/quality relation

Explain difference between price Explain difference between price and and costcost

Don’t make concessions too quicklyDon’t make concessions too quickly

12-13

PRICE ICEBERGPrice is only the tip of the iceberg…remind Price is only the tip of the iceberg…remind customer of value-added factors below tipcustomer of value-added factors below tip

Figure 12.4 12-14

PRICE VERSUS COST EXAMPLENote how Canada’s Bombardier Note how Canada’s Bombardier

positions its CRJ against Airbus.positions its CRJ against Airbus.

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CONCERNS RELATED TO TIME

Also know as “Also know as “the stallthe stall”” Signals conflictSignals conflict Usually customer does not Usually customer does not

perceive benefits of perceive benefits of buying now…or…sees buying now…or…sees both positive and both positive and negative in productnegative in product

See Table 12.1 12-16

CUSTOMER OBJECTIONS

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

See Table 12.1 in text for samples

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NEGOTIATING BUYER CONCERNS

Anticipate and forestall Anticipate and forestall

Know value of your offeringKnow value of your offering

Prepare for negotiationsPrepare for negotiations

Understand the problemUnderstand the problem

Create alternative solutionsCreate alternative solutions

Find points of agreementFind points of agreement

Avoid anger Avoid anger

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SPECIFIC METHODS-1 Direct denialDirect denial--Refute prospects’ opinion or belief --Refute prospects’ opinion or belief --Be firm, not offensive, think --Be firm, not offensive, think win-winwin-win

Indirect denialIndirect denial--Acknowledge prospects as partly right--Acknowledge prospects as partly right--Feel-Felt-Found--Feel-Felt-Found

““I understand how you I understand how you feelfeel””““Others have Others have feltfelt that way” that way”““Until they used the product and Until they used the product and foundfound it it

quite easy and reliable”quite easy and reliable”

12-19

SPECIFIC METHODS-2 QuestionsQuestions--Convert problem into question --Convert problem into question --Do you agree it’s worth paying a little --Do you agree it’s worth paying a little

more for much higher quality?more for much higher quality?

Superior benefitSuperior benefit--Acknowledge prospect has valid --Acknowledge prospect has valid

concern and focus on superior benefit concern and focus on superior benefit --Superior benefits should outweigh --Superior benefits should outweigh

specific customer concernsspecific customer concerns

12-20

SPECIFIC METHODS-3 DemonstrationDemonstration--Discuss competitive advantages of --Discuss competitive advantages of

your productyour product

--Might also involve physical product --Might also involve physical product demonstrationsdemonstrations

Trial offerTrial offer--Prospect tries product without --Prospect tries product without

purchase commitmentpurchase commitment

12-21

SPECIFIC METHODS-4 Third-party testimonyThird-party testimony--Neutral third-party testimony adds --Neutral third-party testimony adds

credibility credibility

--Almost never triggers client argument --Almost never triggers client argument

Postpone methodPostpone method--Postpone answers to client concerns --Postpone answers to client concerns

until later in dialog until later in dialog

--Explain why you want to postpone--Explain why you want to postpone

Last slide Chapter 12. 12-22

APPLICATION: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 too high-- Heard that brand “XYZ” is bad-- Maybe its not time to buy