Prospects may attempt to negotiate, even if there isn’t any real objection. If they do, it suggests that they are interested in your solution, but may be seeking a bit more, either to maximize value (who doesn’t love a good bargain?) or because they have a legitimate restriction and would appreciate some flexibility.
If you’re not the business owner, and many factors appear to be standardized or inflexible, remember, everything is still negotiable. Having less flexibility in specific scenarios can streamline your offerings, but should a VIP prospect express interest, there’s always the option to escalate the matter to upper management or the owner(s) for approval.
Also, although price is often the most commonly negotiated factor, don’t assume it’s your prospect’s biggest concern. Many other terms and conditions can also be negotiated. For instance, offering a bigger discount in exchange for a longer-term commitment, adjusting the duration of the contract itself, payment terms, features/services included, cancellation policy, etc. Avoid discounting if at all possible as it devalues your offerings.
The SCARF framework, introduced by David Rock in his research paper titled “SCARF: A Brain-Based Model for Collaborating with and Influencing Others“, highlights what matters to our prospects during negotiation. The acronym SCARF stands for:
STATUS
CERTAINTY
AUTONOMY
RELATEDNESS
FAIRNESS
STATUS
What is their sense of positioning in the negotiation? Challenging or proving them wrong can threaten their sense of status. While it may be necessary to challenge your prospects at times, you can avoid threatening their sense of status by recognizing the validity of their perspective. It also helps to adopt a collaborative approach rather than a prescriptive one as you RECOMMEND solutions. This can be accomplished by seeking their advice to tailor your solution for them or by collaboratively drafting a proposal.
CERTAINTY
Is risk aversion and pattern recognition at play. This is why people prefer transparent pricing over ambiguous “contact us for a quote” statements.
Be explicit, transparent, and clear about both the process leading up to the sale and the onboarding process once they become a customer. If possible, highlight and offer guarantees, or mitigate risk by reducing the scope of the project.
AUTONOMY
No one enjoys being manipulated; we all desire a sense of control and feel more in control when presented with more options. Due to this, the process of selling a solution inherently induces a sense of threat for a prospect, as it involves narrowing down their choices to your proposed solution.”
In the manipulative world of sales, this is often observed in the guise of false choices (The Decoy Effect). For instance, creating multiple packages: entry-level, medium, and premium, to create the illusion of choice, even though you are aware that entry-level is too basic for most prospects and the premium level is unnecessary. Instead of doing that, being collaborative, as previously mentioned, will help your prospects regain a sense of control. Be clear you’re 100% there to help, even if they decide not to go with your solution. Openly discuss alternatives and be gracious if they decide to go with your competitor.
RELATEDNESS
Do they perceive their relationship with you as “us” vs. “them”? Negotiations induce stress because we believe the other party prioritizes their interests over ours. When this perception exists, we seek to maximize our own value, potentially at the expense of a loss for the other party.
Turn the win-lose mindset into a win-win mindset. Demonstrate that you’re on their side and genuinely care about their success. I’m a strong advocate of Usage-based Pricing because it signals a vested interest in your prospects’ growth and success. If you “walk the talk” and use your own solution, communicate that as well. This way, prospects can readily see that your actions align with your words and that you’re a user, like them.
FAIRNESS
Do they feel that this is comparable to market value, within their expected range, or they’re being treated equally as a prospect, without any favoritism?
If you have a premium solution more expensive than many others in the market, fairness can still be communicated by clearly justifying the value of your solution. If you happen to be selling in a group setting, make it clear you aren’t providing preferential treatment.
Also read: Bad advice on Sales Negotiations