Sales Best Practices
The Right Way to Talk to Prospects About Pricing (without Caving) - Part 3 of 3
Mark Kosoglow, VP of Sales, Outreach
We’re proud of recently closing two business deals with new negotiation tactics that required consultative skills. If you missed my initial posts, check out week 1, and then week 2 for the first two tips in my three-part post.
Now for my final negotiation technique:
3. Learn how to deal with procurement office snags. Procurement offices, in theory, make sense, but I’ve rarely come across one that seemed to add value to a deal.
I guess they guard against people getting overcharged and ensure technical issues are in order. Of course, I’m always looking from the outside-in perspective, but dozens of deals with finance or procurement offices and committees has taught me that a salesperson who’s handed off to procurement had better rely on more than the procurement person saying yes.
You can train people who are going to benefit from the product on how to talk to and deal with procurement. I have had limited success with this. In the recent large deals we won, I went back to the prospect after procurement-office pushback and said, “Your procurement department is saying the price is too expensive.” He said, “No it’s not, I’m going to talk to them now.” While I had my doubts, it proved effective.
However, it's difficult for your prospects to explain to someone in procurement why they should pay $100 a month instead of $50 when procurement won’t be using it, even if you have showed value to your advocate and fixed their problems. Most procurement people aren’t wired to understand that conversation.
A better tactic for you, the salesperson, is to know procurement is part of the roadmap to closing a deal and to prepare for it. If a VP or CEO says to procurement, “Yes. We will do this according to these terms,” then you’ve just removed pricing objections from procurement’s arsenal of WMDs (Weapons to Mutilate Deals).
How can you get that buy-in and endorsement prior to the procurement forms being submitted? There are many roads, but the main thing is to do some construction so the VP’s exit is prior to procurement’s exit. To do this:
- Broadcast data-heavy results to C-suitors
- Get an intro from your point person to a procurement influencing leader
- Ask to see the procurement form and search for clues of whom to influence
- Ask to create a one-page value document with metrics to be signed by influencers prior to your deal being submitted to procurement
To recap my three techniques for negotiating around the price objection:
- Create value for your prospects
- Fix their problem
- Learn how to navigate procurement office snags
Keep these tips in mind as you talk about pricing with potential clients. Price objection is value ignorance in disguise. It’s important to deal with the value objection first and help prospects understand the ROI, time saved, and increase in efficiency your product will provide to their company.