How do you respond to customers that are always bargaining the price?
I’m a freshman with international trading, there are some customers always bargaining price although my margins are very low. How should I reply them? (Other than talking about the good quality).
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Jan 23, 2017
If all they want is price, then they have not worked out the value of what you are selling. Go back and work out the value proposition
Jan 4, 2017
I will go up in price... or I will start interestingly high for negotiation from the beginning. Since you know the customer, you may get a sense on his/her middle comfortable point. If you don't like doing this frequently, don't waste your time with that customer. If the customer keeps looking to work with you is because there is value in your service other than the price. Keep that in mind and let him/her know about that 'value'.
Dec 31, 2016
Look at the value your offering provides, is there a benefit you offer that is unique from your competition? Use this to leverage your value, if the buyer states you are too expensive, ask if the price was the same would you purchase? If yes, then explain the unique value you offer and explain this difference is why the price is more. This will only work if you are convinced of the value to the buyer as well.
Dec 27, 2016
Typically, I'll respond with something along the lines of "I don't dispute or react to another company's pricing as I don't know their operations and infrastructure...all I know is what it takes us to give you good value and a professional product like we've done for {INSERT YOUR VALUE HERE... the past 6 years, companies like a,b and c.... for example]." Then I'll continue with, " if there is a budget you need to stay within we can work around that and if needed reconfigure the scope of work."
Dec 27, 2016
I would make certain I fully understand the customer's needs and what they are looking for in terms of out outcomes. This usually involves asking enough good questions to get the full picture. Then I would offer them different bundles of services, with at least one that partially meets key needs, giving them a start in achieving what they want to accomplish, in the pricing area the customer is seeking, and other bundles that cost more, but more fully meet their needs. This way the customer can see what can be done to make some real progress, within their price range, and what could be done if they invest more in the project. That way you're giving the customer options, choices, without losing your ability to profit.
Dec 26, 2016
Hi Lilly. Try to find out what really adds value for this particular customer. Press the right buttons and sell instead of negotiate.
Good luck,
Piet Aarts
Dec 26, 2016
It is nature that any customer bargain on costs... First thing we have to make them to understand the QUALITY services that we provide them and the after Service. We can give them some additional (Bonus) services...
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Dec 22, 2016
Its a classic buying signal. You have to be prepared to negotiate the deal to suit you both. Some people enjoy the challenge and will respect you for indulging them. If you don't have margin to play with you have to look at upselling or bundling in some respect. Do not let them walk away!
Dec 22, 2016
I feel your pain, Lily. I am a Real Estate Digital Marketer. I work within a profession that negotiates all day long, BUT they do not generally wish to negotiate their commission and I pretty much tell them the same goes for me. They are not your client nor are they my client if they cannot afford you. Simply release them and you make room for the right person to come through the door. Bottomline is they either do not value your service or they cannot afford you. Either scenario means they aren't someone you should work with. My opinion anyway. :)
Dec 22, 2016
Price has 2 sides. Buyer and seller. Most of your negotiaters are probably from the Far East and Eastern Europe. That is entrenched in their society. The best way to do it, from my chair, "I set fair pricing based on the market and costs for production /shipping. " Be strong and attentive. They will understand or not. Always giving into their demands shows that your price has no value. "If you think you deserve a lower price, triple your volume. " I learned my negotiations in Korea. I think that they are one of the strongest negotiation cultures there is. Be strong and honest with everyone.
Dec 21, 2016
Some great answers here, covering a lot of ground around the sales process. One thing that may assist you is when they ask for a lower price, you very politely ask " Why ". Sit back and listen very carefully to their answer. Inside their words is the true reason and when you know that, you can decide the road to travel. Discount, rebate, volume, pricing schedule etc . . .
Dec 21, 2016
Hi Lily
These customers are a fact of "sales" life.
Place the following little note in your correspondence, both offline and online and in a prominent place, if you operate from a physical space as well:
We continuously conduct research to make sure we are always offering you the best prices. In this way we save you the trouble of asking for discounts so you can concentrate on selecting the products that best match your budget.
Now when people ask you for a discount, just refer them to the notice or say it sweetly to them as you smile.
It works for our businesses Lily.
Dec 21, 2016
Hi Lily,
I do not know what products or services you are selling however it is human nature to want to bargain. It is indeed part of some cultures to bargain. There several ways to deal with this. First make sure you are talking about the same thing. perhaps other vendors do not provide training or implementation , maybe other vendors do not include delivery or customization of the product or solution. depending on your product or service if you have done a great on of understanding your customer or products needs or challenges within reason the price should not be a deal breaker.
The short answer is do not give unless you get. You want to pay a lower price ok can you double or triple the size of your order. Can you pay sooner. Can we take something out like delivery or training? As a rule of the thumb trying to be the cheapest is not a great strategy.
Dec 21, 2016
HI Lily,
What a great question.
I handle many international clients, In many cultures bargaining is standard practice. Sometimes they will bargain until you are prepared to leave the table. To them, you have just reach the true price. Their thinking is you will never go under your cost, so when you reach the walkaway point, you have reached your lowest acceptable margin.
Also sometimes they will "try you" just to see how you react.
There are a number of things you can do. in short form.
1. Stand firm on your price. if they say it's expensive agree with them. they will not spend time with you if they are not interested.
2. Never give anything away for nothing. if they want a reduction, ask how many units will the order.
3. If they ask "is this your best price" say yes, I don't want to waste your time in negotiating, however if you would rather negotiate, I can always start with a higher price.
4. If they push harder still, say that you can't do anything on the price, the margins are already too low, normally we would be looking at at a price of $$$$$. We have to make some margin or we go under.
5. If they state that they will walk away, and if you have some margin, wait until they start to pack up or move, then say please wait a moment.
Play with your calculator, or step out of the room. Come back saying that they drive a hard bargain, but if they agree / sign today, I can squeeze a further 2 - 5 %, but it has to be today. You can also say that you don't know how you are going to explain this, but your order will help to smooth thing over.
This way you are saving face, they get something and you get something.
so you create a win/win position.
Lilly you are welcome to contact me if you want any further specific advice.
Dec 21, 2016
One of the things I learned through time is to offer a cluster of value vs cost propositions. It'll be something like - a) 5 trades + 10 mins consultation = $A, b) 8 trades + 20 mins consult = $B, c) 10 trades only = $C, and so on.
When you do this your ability to engage and negotiate increases. Also, those that want to pay less will get the picture immediately. It'll also over time give you a clear idea about which ones are more popular. Don't, at any rate, leave your price points unless there is a bigger catch down the line.
All the best.
Dec 20, 2016
Today it has become nature of individual to bargain for lower price.One thing I would suggest is that keep your prices flexible.And secondly if you are not getting anything then do not make deal.Thirdly if the person is adamant then try to take money in advance.
Dec 20, 2016
It's their job to get the best price from you that they can. Of course you need to try to set yourself up as a premium product, not a commodity (and it would be wise to know whether that is true or not). You can certainly discuss with them the value that they will get by buying your solution. But, even assuming that your product is different, there's no inherent connection between value, price and cost, so many customers will continue to negotiate as long as they can. That's their job. Before replying to them, or even engaging with them at all, you need to know your walk-away price and stick to it. Some will come back to you once it's clear you're done negotiating. Others think they can get a better deal elsewhere; if they can, then you'll have to be satisfied with the smaller portion of the market that does value your product more, or else you'll have to rethink your value proposition or your pricing.
Dec 20, 2016
There is lots of advice you can heed but as a younger person there are some basics you should know. First is that there is a difference between selling and negotiating. In the art of selling you learn how to combat price debates by asking the right questions and turning around requests for bargains to understand your prospect's priorities and motivation. Negotiating is what you do when something is sold and all that is left is the final price. That can be done in many ways by trading something you give for something you get. That might be volume, it might be timing, it might be a lead to another potential customer. Most important I would suggest you get in front of a good basic selling book, learn the art of the question and you will see these challenges in a new way. Good selling!
Dec 20, 2016
It's a truism that some cultures view signing the contract as the **start** of the negotiation process. The obvious answer is to sell the value of your product/service and not negotiate on price. Some customers view negotiation as sport, and that's fine, but others are just price shoppers.
The problem is that those price shoppers will never be satisfied. If you cut your price, they are likely to complain about something and ask for a rebate maybe with the threat of a bad review. And so on. I agree with the advice to fire those customers -- if you can. They're MTTTW -- More Trouble Than They're Worth.
I like the idea of reconfiguring work scope. It makes more sense and both parties are getting into a more meaningful contract while on clients budget and service quality.