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Think! Inc. - business negotiation, redefined

Stop Giving Away Your Value

Corporations Fall Prey to Pricing Games Too Often, Says Think!

CHICAGO – Despite the complex sales processes used by Fortune 500 companies, many sales teams fall prey to the last-hour pricing games during deal negotiations. However, sales teams often set themselves up for this downfall by commoditizing their own services during the sales process, according to Tim Caito, Partner and Vice President of Worldwide Sales for Think! Inc., a progressive business negotiation firm.

“During my consulting, time and time again, I hear how customers agree that a product is clearly superior but that the price is 20 percent too high. Rationally, it’s impossible to say a product that produces significantly better results should cost as much as one that doesn’t always work, and yet that’s what we often hear from customers,” said Caito. “Somewhere along the negotiation process, there’s a significant disconnect between the actual value of the product and the cost.”

In order to avoid the pricing game, sales teams need to showcase their value right at the beginning. Often, sales teams do not bring up their product’s unique qualities early enough in the process. Instead, they often present those differences at the end of the sales process to show why the customer should pay more. According to Caito, three major changes in the marketplace has made the value-sell more difficult.

First, the buying process has become more formalized and structured. Professional purchasing people are purposely brought into the process at the end because they focus on the economics of the purchase, not necessarily the quality of the product. By infusing the value of the product with those who recommend you to the professional purchasers, that value is often brought to the table by the corporation’s own internal staff, making the value proposition sell that much easier.

Second, deals are becoming increasingly complex. One of the most common comments Caito hears during negotiations is the deal has come full circle from where they started a year ago. Because deals have become so multifaceted, price quickly becomes one of the first and easiest common denominators among competitors.

And third, many sales teams believe the buyers are the one with the power in the negotiation. However, this is not always true. Approximately 50 percent of the time, according to Caito, the seller has the power in the negotiation because they are offering a product or service that cannot be fully offered by any other competitor, leaving the buyer without a viable alternative.

“By waiting until the end of the deal process, many sales professionals become tactical and reactionary and fall prey to the pricing game. Negotiation needs to be a parallel process of the sales cycle rather than just a step, ensuring customers are willing to pay for the value you can bring them,” said Caito.

About Think!

Think! Inc., headquartered in Chicago, Ill., delivers high-performance negotiation systems to optimize the sophisticated sales processes of Fortune 1000 companies. Through strategic negotiation, Think! helps companies align their deal-making initiatives with their corporate goals. In addition, the process of strategic negotiation helps businesses understand negotiation from both the buyer and seller’s perspective, as well as act on that understanding to integrate negotiation more fully into the sales process, helping all sides achieve a much more desirable outcome. Think!’s clients include Federal Express, Monster.com, Ryder, Honeywell, Coke, Microsoft, Johnson & Johnson, Symantec and Lucent Technologies. For more information, visit www.e-thinkinc.com.

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