Pricing Fuck Ups. Hard-(L)earned pricing lessons from the indie side of business. Ep02. Discounts will close the deal.
“If I discount you, I’ll close you.” Giving your power away.
Family independent business, leading their market and moving into big deals with large, established companies.
Account manager: Negotiations underway. Looks good. No price objections. Value determined. Almost at the finish line…
Boss of indie firm: part of the last conversation to finish up details and be there just in case things go unexpected. However, anxiety wins over.
He rides in on the white horse, and kills it. Not in the way that makes the deal better or breaks it. Gives away a massive discount that wasn’t needed “in order to reassure we didn’t lose the deal.”
Closed the deal AND left money on the table.
Walks out feeling like the hero.
Account manager: “Shit. There goes my commission and got extra compromises.”
The Wrong Approach
Let anxiety win over. Not being able to shut up and get on “presentation mode” didn’t let the boss read the room. He rushed into closing the deal thinking that price would be an objection. Thinking with his pocket.
Instead of being a support in the conversation, he took over, taking any authority over the AM. (Dick move, don’t be that person).
What would’ve done different if starting over
Set the boundaries of who’s in charge of the negotiation and how it will run.
Ask how far could go into applying a discount.
What didn’t happen
Start new negotiations setting a premium, fixed price.
What did happen
We left money on the table (a couple tens of thousands of dollars).
We were still seen as the specialists, but now they knew we needed the sale. We had less power in the relationship.
We spoiled the relationship, for them now wanting discount at every transaction.
Say the price, show the price and then shut up and wait. They might just buy it.
If there’s still something to work on, it can be done in different ways than money: priority service, ad-hoc training, special visits, access to more senior staff, etc.
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