Hold Your Ground on Price Increases

Hold Your Ground on Price Increases

Do you experience this situation? One of your largest and best customers hasn’t had a price increase from your firm in a long time. Maybe it has been 3, 4 or even five years or more. You may have made attempts in the past only to get shot down by the buyer over and over again. Now, your profit margins on this account have diminished over time and you really need to change the momentum in price negotiations.

Take Action

What can you do? Actually, there are several possible tactics to help change the momentum in this game but we will only discuss one today. First, we must understand how the buyer works. Buyers will first test your price and then test your resolve. Will you adhere to your price or will you cave?

Buyers push back because so many sales people easily cave in. They have learned that pushing back works. However, the buyer knows who will cave and who will hold on price. Buyers are less likely to push back on those that have a history of holding firm to their price.

If you have had as history of caving on price, try this. When a buyer resists simply explain again the reasons for the increase. Return the discussion to the points that you originally made that support the price increase. Yes, you will repeat yourself but we want to send a message to the buyer that there is no room for negotiation. You may decide later to negotiate but we need to resist the buyer’s push back at first.

You might notice this technique is commonly employed during television interviews where the interviewee wishes to avoid the topic or stall the interviewer. Restating your reasons on a topic reinforces your position and sends a message the interviewer (or buyer) that there is no room for negotiation. Remember, the buyer is taught to test your resolve. If they can get no movement on your part they will often retreat.

About the Author

Ralph Zuponcic

President, PricePoint Partners

Ralph is a national authority on strategic pricing. He has been featured in publications including The Wall Street Journal, Fortune Small Business, CFO Magazine and Marketing News.

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