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
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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
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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”
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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
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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
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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