It’s funny to me how many people think that it’s the sales professionals who are playing the games in the sales process. I believe that buyers play at least as many games as sellers. I’m going to address one of their most common below.

You’ve most likely been a victim of this little game many times. In retrospect, I know I certainly have.

The Game
I know a Purchasing Director at a large company. He has a staff of buyers who collectively conduct hundreds of buying transactions per week.

For all purchases above a certain dollar amount, he requires buyers to ask for a 5% discount at the very end of the negotiation process.

He estimates that 70% of the sellers give in to this request. Do the math. For each $100 his company spends, they realize, on average, a $3.50 savings. Multiply that over hundreds of millions of dollars and suddenly the Purchasing Director looks like a hero.

Why It Works
This is negotiation 101 stuff. Once sales professionals have invested time and resources in landing a sale, buyers know the selling company is frequently more willing to be flexible on pricing. The purchasing professional is counting on your thinking, “After this much time, I’d hate to lose this sale for just a 5% discount.”

Notice that the purchasers are asking for a 5% discount. They fully intend to buy the products and services, even if the discount is not given. They are bluffing. They feel there is no harm in asking. And they’re right.

Sales Tips For Handling This Tactic
If a buyer wants a last minute price concession, you can be 99% sure it’s a bluff. Remember, they’ve invested time and resources in you too.  Use one of these sales tips the next time you run into this negotiating tactic:

Your best technique is to just say no. The statistics are on your side, by the way.

Agree to the discount, but inform the purchaser that you won’t be able to deliver the products/services that had originally been discussed. This is called decoy marketing (see Further reading below).

Let the buyer know your price will soon be going up and he or she is, in effect, getting a discount by your excluding them from the price increase. Take the offensive.

Inform the buyer (after you’ve made some important looking phone calls to your sales manager) that you are in a position to give them the discount if they add an extended service plan, agree to exclusively buy a certain product from you, etc. Always make customers earn a discount.

Remind the buyer that you started negotiating with a highly discounted price. There is no more room. They’ve hit your wall.

Tell the buyer that as much as you would like his or her business, your company has never given discounts and isn’t planning to in the future. Then ask for the PO number.

Sales Blog Epilogue
I can easily steer you in the right direction on this buying tactic. If a customer asks for an 11th hour discount, say no. The odds are with you.

©2010 Scott R. Sheaffer

Related posts:

1. You May Be Blind To This Customer Negotiating Tactic
2. What is Decoy Marketing?
3. Buyers’ Candor About Their Buying Authority Is At A Two-Year Low

Tags: closing, negotiation, objections, pricing

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