I was recently asked to join a rep in a meeting to advise on price with a customer to close a very large sale, potentially our largest of the year. The vendor we were representing also participated in the meeting.
The company president reviewed our proposal with her accountant then left the room to write a check for the 20% order deposit we had discussed. When she returned, we noticed that the total was 2% less than our agreed upon price. How do you handle a situation like this?
First, you need to be aware of the account’s background. This case involved a dominant, aggressive owner who was ready to buy several months earlier but let us know she needed our “best price.” She even shared a competitor’s quote with us. We spent a great deal of time in final negotiations and were able to get our vendor to drop his price to a cost-plus, and we, as his distributor, reduced our margin to the bare minimum.
After so much careful analysis, how do you react to an order that does not meet your stated price? If we, as the distributor, were to accept the lower-priced order, our vendor will expect us to absorb the difference. If we were to hold a strong position and decline the order on the table, we could potentially alienate the customer and lose the deal completely.
With too many people in the room for an open discussion of the order’s history, I decided to decline the check for the time being and say that we would get back to her on this proposal.
Here are some suggestions for dealing with your “Give Me Your Best Price” customer:
- Be sure you know your customer personally and have an established sense of trust.
- Be sure you can prove the value of your product to solve their problem.
- Try to establish an agreement beforehand that obligates the customer to buy if you show them the solution to their problem.
When the subject of price rears its ugly head, go back and review these parts of the sales cycle before answering the price issue. If you hit a snag like the one above, you likely will need to work further on the proposal and the relationship. Remember, people spend more money with people they know and trust.