We've all been there. You are sitting around the bargaining table, and you think you are finally getting somewhere, then the other party drops their offer, and it is... somewhat higher than you anticipated. What do you do?
While you can laugh in their faces and demand a better price, this might not prove to be the best course of action. And you can definitely forget about nurturing a relationship later down the line.
If you know that you need to operate on a tight budget or you haven't got the most wiggle room, it can be difficult to know where to begin with lower price negotiation. We all know that good manners cost nothing, and so with that, we need to think about how we can negotiate our way to a cheaper price and the best deal possible politely.
Understanding the other party's perspective
A good place to start will always be by considering the perspective of the other party. Placing yourself in their shoes should help you understand how you look during price negotiations. This helps you to create a better impression and begin to build those key connections and relationships that can make future negotiations much easier to manage.
Most obviously, you need to make sure that all communications are respectful and that you need to actively avoid causing offences.
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If you are on the phone, be mindful of conversations around you that might be audible to the person on the other end of the call.
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If you are emailing back and forth, watch who is included in replies, CCs, and BCCs.
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When attending a meeting in person, pay attention to who you might see or talk to on the way in or out of the building (and the same can be said if the seller is coming to your premises!).
Never go into a negotiation without first clearly defining terms and expectations. Allowing both parties to do so means that negotiations and haggling can be approached fairly and honestly.
Preparing for the negotiation process
Preparation is key for any negotiation process, and you definitely need to put time in when you know that you will probably need to request a discounted price at some point. Asking for a lower price is not a reflection of your negotiation skills or that the vendor is offering something that is priced too high.
By preparing for the negotiation ahead, you can create a smoother road for you to navigate. You know precisely what you want, and you know the objectives that you wish to specify. When you know where you want to go, it is much easier to get there!
Never underestimate the power of research and the favourable position it can put you in. With proper research, you should be able to work out several important factors that can aid you in bringing down the price.
Firstly, find out what the actual market value of the product is. A product rarely has a single supplier. Even if it is new to the market, you should be able to discover its true market value, and that will give you some power when trying to leverage a price.
If possible, you should also look for quotes or prices from other providers. Not all vendors will appreciate it, but sometimes when you point out that they have a higher price than one of their competitors, they can be persuaded to drop the price to something more reasonable.
You should also determine what your price ceiling will be. Though you will obviously want to go away with the best price possible, there is always a chance that you may have to negotiate and compromise a little. Confirming your maximum potential price and knowing that you have no room to extend it gives you a non-negotiable to help build a foundation for your arguments.
Crafting your proposal
Once the other party has made their proposal, you can begin to think about how you would like to negotiate the price in return. Getting a good deal is the end goal here, but you need to make sure that you do it politely and in a way that sets up future negotiations for success, too.
When creating and structuring a counteroffer, you need to make sure that you offer a reasonable amount. Just because you think that you have been highballed does not mean that you get to come in and offer the lowest of the low as a rebuke. The first quoted price is only the beginning, and you will have plenty more opportunities to go back and forth as you discuss more prices.
Any counteroffer should be justified and backed up by market research. As mentioned above, you should have a clear idea of what the market value of the purchase should be. This will allow you to accurately craft a counteroffer of a reasonable amount.
You should also use this as an opportunity to highlight value propositions that will arise as a result of the new price. You always want to make sure that the final price reflects the value of the deal for both parties. This is a partnership being created, and this should be seen in the price you finally agree on.
Always remain flexible and indicate a willingness to negotiate and reach a deal. Though you may have a price ceiling or a time constraint holding you back from repeated discussions and a lot of negotiation, you should remain open to the discussion that you can commit to.
Communicating effectively during the negotiation
Effective communication during a price negotiation is a must, especially if you know that you will have to request a lower price. Communication is one of the negotiating skills that can never be undersold. When trying to politely negotiate a fair price, you need to communicate openly and effectively with the other party. Now is not the time for aggressive tactics and underhand suggestions. Instead, be open and affable, and you will hopefully see the negotiation become easier to manage.
Most importantly, you need to make sure that you choose the right words and phrases to clearly get your point across in a respectful manner. Be mindful of what you are saying and try not to deliberately offend. Use a friendly and professional tone of voice when speaking, and don't be afraid to crack a joke or two if you think it is appropriate to do so.
Just as a quick example, you do not want to say:
If you don't reduce the price, we'll take our business elsewhere.
All you will do here is incite the vendor to call your bluff and invite you to, indeed, take your business elsewhere.
A more polite request might look something like:
Is there any flexibility in the pricing for long-term clients like us?
If you have an outstanding relationship with the vendor, know how to use it! Politely knowing how to respond to counteroffers and other requests can help to create a better deal for everyone and let them know that you truly value your partnership.
7 tips for haggling and negotiation
If you do need to get into the nitty gritty of haggling and negotiation, you need to know how to do it right the first time. Negotiating prices can quickly descend into frustration if you aren't careful, so you need to ensure that you remain respectful even if asking for a serious discount. Here are seven of our best tips to help you ace your price negotiation.
1. Do your research
We said it above, but we will say it again here; do your research! Our research has found that 41% of negotiators claim that they occasionally have no time for preparation, but heading into a negotiation blind is never the way to go.
Only by doing your research will you be able to discover whether there is a chance for you to push for a better deal and a discount. You need to know what the markets are like, you need to know what demand is like, and you should know what your competitors are doing and who they are speaking to.
Knowledge is your biggest asset here, and you must leverage it if you want the most success. You cannot hope to get ahead in your discussion and get the outcome that you most want to see unless you put the work in. There is no excuse for forgetting to do your prep work, and you will most likely feel its loss keenly as you progress through the price negotiation.
2. Nail your opening lines
Your opening lines will be crucial when asking for a discount. Though it might appear different to other opening tactics, they are actually quite similar. You should open a price reduction negotiation with the acknowledgement of the deal currently on the table. Acknowledge your willingness to reach a final offer and state what it will take for you to get a deal that you deem to be acceptable.
Stay confident, stay calm, and make sure you express yourself well. Though the sellers may not appear to be interested in your request at first, you should hopefully be able to go on to negotiate a better price.
3. Keep an eye on body language
Body language plays a big role in the psychology of negotiation. A person might be sitting there laughing and joking, but if their body is tucked in and their shoulders are up by their ears, they might not be as comfortable and as jovial as their words make them seem.
By keeping an eye on body language and other non-verbal cues, you will know when to push in a negotiation and when to pull back. Though you may want to try to add a few more clauses to the deal or net a few additional add-ons, the body language of the other party might suggest that they are growing tired of the proceedings. It might be better to leave with the deal you already have on the table rather than risk losing it all as you push for more.
4. Get the timing right
Negotiating a lower price successfully often comes down to getting the timing just right. This doesn't necessarily mean launching your proposal at a certain time in the meeting itself, though this could play a big role in actually landing you the deal.
What we instead wish to refer to is choosing the right time of year. Very few markets experience constant demand all year round. Choosing to approach a seller in a quieter month might net you a better deal than if you were to approach them when they have multiple buyers to choose from.
5. Highlight the unique features of this partnership
What do you bring to the table as a buyer? What value will a long-term partnership bring to both parties? Whether you are banking on an existing relationship to bring you the deal you want or you are trying to foster something for the future, you may need to remind the other party of this unique value.
You should be able to offer them something none of your competitors do. If they sell their products or services to you, you will be able to make good on that deal in a way that no one else does.
6. Leverage multiple items
You might sit down to acquire one particular product or service, but as the negotiation continues, you decide to ask for more. Rather than leaving with one, you will end up with a bundle of many.
If a vendor is firm about the price of one item, they might be willing to be more flexible about another. You may be able to get a better deal overall than if you tried to negotiate the price of each part individually.
7. Ask for add-ons
At the end of the deal, you may be able to ask for a few add-ons to be thrown in. This is not the same as leveraging multiple items; instead, it should be considered to be the gain of additional services that complement the main acquisition.
When leveraging multiple items, you are trying to acquire individual deals under one umbrella for equal or well-balanced value. Asking for add-ons will see you instead look to improve the overall value of one of your acquisitions.
Politely negotiate your way to lower prices
Asking for a lower price often forms a key part of a negotiation session. Knowing how to ask for one politely allows you to also work on building a rapport with the other party that could hopefully lead to a long and mutually beneficial relationship. Here are three key takeaways to remember when negotiating your way to a lower price:
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Professionalism and politeness are a must — Never compromise your manners.
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Focus on mutual value — Appeal to their need to also make a deal and the value that you can build together.
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Establish clarity on the next steps — Outline how making a deal with the lower price can kick the rest of your plans into motion and establish deadlines for delivery or implementation.
Do you need some help brushing up on all of your negotiation skills, and not just asking for a new polite price? Scotwork's experts can help. Our team has over 45 years of experience in negotiation across all industries, and they are ready to bring your skills up to scratch.
Get in touch with us today to find out how we can help you elevate your negotiating skills — as politely as possible, of course.
