Friday, September 5, 2008

"Flashback Friday": "Sharpening Your Pencil" a Little is Alright to Close a Sales Deal

Many times, when a customer is right on the edge of doing business with you, they might ask you to sharpen your "pencil" just a little. Especially if it is large business deal, you will have to think really hard about whether or not you need to do this. If the deal is still profitable, my advice is to go ahead and get the dotted line signed.

I'm not talking about a huge price drop here, either. When I refer to sharpening the pencil, it requires a reduction in price by less than 5%. While your price might be justified and already strong, it is simply a last bit of leverage the customer is exercising on the "deal". Sure, you could hold your price and still get the business in many cases, but at worse the deal could fall apart if the customer gets the least bit insulted.

By agreeing to this concession, this also puts you in a position to ask for something in return. There will be no better time than now to get the type of quality referral we dream about as salespeople. I'm not talking about a name and a phone number here, either. This will be the best time to ask for a three-way lunch or personal referral letter to a prospect of huge importance that this customer knows. If you ask this in return for your price concession, your customer will gladly help you in this area as this will not cost them anything.

Negotiation is relevant in all aspects in life, and this includes sales. Don't ever be afraid to ask for something in return, especially if you are making a concession on price.

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