Let me start with a gross generalisation. British people don’t like talking about money.
When I am negotiating in this country, I almost always find that the customer doesn’t want to talk about money first. They are worried that if they mention a sum that is too low it will offend. Equally they worry that if they mention a sum large enough not to offend they will have offered more than they need to and got a poor deal. When the seller is also uncomfortable, this can result in a bizarre and destructive stalemate in conversation where everyone is trying to avoid the issue. When everyone is uncomfortable and communication breaks down trust and confidence can be lost. Ultimately this can kill a sale – I’ve seen it happen.
My approach is always to try to be straightforward and comfortable with the subject of money. Then others can follow my lead, and I’m giving them something to respond to. If I seem confident and comfortable I help them to feel comfortable, and if I appear pragmatic then they don’t worry about offending me by telling me their position.
Often people I work on sales with are concerned that by being the first to mention an amount they will either turn off the buyer by saying something too high, or undersell by going for a safe smaller number. No-one wants to look silly, lose a potential sale or leave money on the table.
I don’t believe I have ever lost a sale through naming a price with confidence. Sometimes people respond with a very different idea of what the price should be, more often they respond by telling me some of the constraints they are working within. Then we can collaborate to construct a deal that works for everyone.
This is yet another situation where preparation is the key to success!
It is easy for me to be confident talking about pricing when I understand
- the costs of alternatives to using the products or services I am selling
- the customer’s business and the likely value of a product to them
- whether the customer is likely to prefer to pay once from a capital budget (Capital Expenditure –CAPEX) or to spread payment over time from an operational budget (Operational Expenditure – OPEX)
- spending limits and budgets for individuals/departments/groups in a company
- the different ways in which I could package my product or service to fit the customer’s constraints
Another way of looking at this is that if I’m not prepared well enough to be confident, it’s too early to be talking about price.
P.S. The title of this post refers to the 90’s hit Dirty Cash (Money Talks)