Pricer’s Points: HBR Article Review – Negotiation with Clients You Can’t Afford to Lose | Garth Hoff
1) Change the focus of the customer from seeing themselves as a “strategic account” to you as a “preferred vendor.” Strategic Accounts try to use their clout to demand extra discounts. Preferred Vendors provide the best solution for customer needs regardless of price.
This is a major shift for most sales colleagues but a critical shift in viewing pricing power. I’ve seen areas in a business where this was in part achieved in how they respond to pricing requests. Using metrics that are “anti-procurement” but very value-based as well as other marketing text that reinforces the preferred vendor status can be very successful.
2) Limit involvement of Sr. Execs. In the negotiation. Build peer relationships in advance of the negotiation. Remove discount approvers from the negotiation table.
Tough one because execs always want to be directly involved in the “big deals.” I think this issue is really about getting C-level engagement early in the process when it matter most – not parachuting in at the last second to “save the deal.”
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