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How and When to Make Concessions in Sales PDF Print E-mail
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Sales Cycle - Negotiation
Written by Joe   

Getting What You Want From that Big Deal

In any large complex sales deal it is inevitable that the customer will try to get you to make concessions. They will try to get you to bring the price down, or they will try to get you to throw in bonuses. What you need to know as a successful sales representative is when and how it is appropriate to make concessions. If you don’t go through this process correctly, you are either going to come across like a pushover, or like a jerk that no one will want to work with ever again. On the one hand, if you make too many concessions, the customer will find it easy to abuse you and they will cut into your profits over and over again, setting a poor precedent for the future. On the other hand, if you don’t recognize the times when it is necessary to concede, the customer will leave the deal feeling like they’ve gotten mistreated and won’t come back to you in the future.

In order to fix this problem, you need to be ever prepared to handle your customer’s demands, knowing when it is OK to say yes, and when you need to say no. This article will begin to help you understand this delicate balance. However, if you still need more help with this process I suggest checking out our podcast SalesRoundup.com. You can find a truckload of addition helpful information on this subject there.

But for now, let’s get down to the real dos and don’ts of concessions.

Never Make A Concession Unless You Have To

You should never be the one to introduce the topic of discounts into the discussion. Rather, you should act at first as if concessions are not even within the realm of possibility. Wait until the customer expresses an interest in getting a discount and then make them work for it. The customer needs to feel like you are reluctant, or else they will not feel like they are getting a deal.

Always Get Something In Return

When you do decide to make a concession, it should rarely be one sided. If the customer wants you to change your price, ask for something in return. Ask them to promise to close the deal at an earlier date than planned or to buy a great quantity of your product. This way, you are both gaining something from the change in plans.

Know Your Customer’s Needs; Make Sure They Know Yours
Know what your customer is hoping to get out of this deal and communicate to them effectively what they need to do for you in return. If you do your research properly, you should already be well acquainted with their buying procedures before you have even met.

Follow a Healthy Negotiation Pattern

This is perhaps the most essential point of all. Customers go through a very unique psychological process during the negotiation period. The people that you are working with need to not only get a good deal, but they need to actually feel like they have gotten a good deal. This only comes from getting concessions from you slowly and arduously. They want to feel like they have put the proper effort in and will now enjoy the benefits. In order to make this happen, you need to give concessions slowly, a little bit at a time. If the absolute lowest price that you can charge is $8000 and you concede from $10,000 to $8000 on the first day, the customer will be frustrated later when they find that you are unwilling to go any lower. Instead, concede a little bit at each session, until the customer feels like they have worn you down to your absolute, lowest price. This boosts their self-esteem by making them feel like they have driven a hard bargain, making them feel optimistic about working with you again in the future.

This post was inspired by the SalesRoundup Podcast episode titled “Let’s Make a Deal - Behind door number one Principles of Negotiation”  we recorded in March of 2007.