In the midst of this time of great upheaval, negotiations are becoming more important than ever.
Everyone is feeling the psychological effects of dealing with uncertainty and being forced into isolation, and that has an impact on how people approach buying decisions. Most people feel a little bit frightened and unsure, and that may make it more difficult for buyers to pull the trigger on a purchase. Some are very legitimately worried about their company’s ability to survive the crisis, and as a result, they will push very hard for the best possible bargain.
And a smaller but still important subset of purchasing professionals will see the pandemic as an opportunity. This group has been trained well in the art of negotiation. And if they think they can use the emergency as a way to obtain a better price, you better believe they’re going to jump on that opportunity.
In this atmosphere, it’s more important than ever that your sales team understands the psychology of negotiation. Nothing can replace a complete course of negotiation training, but if that isn’t in the cards for your team right now, we have a couple of tricks that pricing can use to help your sales team get on a more even footing with their better-trained buyers:
- Make sure everyone understands your value. Both your sales team and your potential prospects need to understand what makes your product different from competing options. And only after you have done that education with your customers should you reveal your price. To accomplish this goal, we recommend completing the tutorial on Exposing Your Differential Value Step-by-Step. You then need to infuse all your marketing and sales material with the message of that differential value.
- Leverage “spread” pricing. People have a natural inclination to choose the option in the middle. If you offer three different versions of your product with low, medium, and high prices, you will sell more of the middle option than if you just offered one product at the medium price. And you might even sell a few of the higher-priced options that you weren’t expecting to sell. To learn more about how different pricing options affect buyers, check out The Fundamentals of Price Structure.
- Focus on loss avoidance rather than upside gain. If I offered you the opportunity to gain $10, you might be interested, but maybe not. However, if I told you I could show you how to prevent yourself from losing $10, you’d probably be all ears. Human psychology primes us to be more attuned to avoiding loss, so if you can position your offerings as a way to avoid loss, you’ll be able to charge more. Selling Value? Focus on the negative provides a deeper explanation of why and how this works.
For a whole lot more tips and trips like these, watch the webinar on Pricing Psychology in B2B. It provides a lot of insights that will be value for your pricing team as you interact with sales and give them the tools they need to charge the best possible prices. And it’s information you can use both during the coronavirus crisis and after.
We hope that you and your families are well. Stay safe.
Exposing Your Differential Value Step-by-Step
This tutorial cuts through the apparent complexity of value-based pricing to provide simplified, step-by-step process for understanding and exposing the differential value of your offerings.
The Fundamentals of Price Structure
In this on-demand webinar, we explore ten different approaches for structuring your prices to align to customer needs and priorities---from bundling, add-ons and multi-part prices to volume schedules, surcharges, and more.