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Facing Bargaining

Despite offering an explanation and price justification, it is not always possible to successfully close the price conversation. Customers may persist in asking for a lower price. Customers are also encouraged to do this by the fact that, very often, brands and retailers do offer price accommodations. These price accommodations are possibly to:

  • - Compensate for pricing differences between different markets
  • - Sell some products faster (former collections, overstock)
  • - Match local customers’ buying habits (when a certain level of discount is the norm)
  • - Facilitate closing the sale

Since prices might be not fixed—accommodations exist. It is normal that customers ask for, and will do their best to obtain, the best price. Of course, the best approach by brands would be a no-discount policy, which many brands and retailers are indeed implementing. The right attitude when facing

Table 5.6.C Defending the different prices

Desire

Customer's State Of Mind

Bargaining

Real price

The price published is not real

"I can buy cheaper in others countries or in another place anyway"

Fair price

The price is too high compared to the product's value

"I will not buy at this price; it's far too high for what it is—no way"

Good price for me

I need a special gesture

"I will not buy at this price for sure. What can you do for me?"

Best price only for me

I want the best possible price

"I'm not interested in your company's policy or whatever. You need to give me the best price you can. Ask your boss"

a price reduction request is to understand that your customer is right in asking—since this accommodation exists everywhere. And, rest assured, if your customer did not want to buy, he would not bargain (Table 5.6.C). You are very close to the decision being taken!

Four situations depend on the customer’s desires in terms of price:

  • — A real price
  • — A fair price
  • — A good price for me
  • — A best price only for me
  • — Real price

In order to reassure a customer on price reality, you can prove the value by being particularly transparent in explaining pricing. Be aware of the prices offered in different countries and the practices of other retailers. Customers may have the impression that they can get lower prices somewhere else, from someone else.

John: “By the way, I just have to check at an independent car dealer and I

am sure that I can order at a much lower price!”

Henry: “I am not sure which car dealer you are thinking about. Only three independent car retailers offer this model along with our brand’s direct sales showroom. We know that sometimes commercial practices might differ slightly, but it would never be as important as you might think.” John: “But still, they can be cheaper than you right?”

Henry: “I really cannot say that. You need to compare the entire offer and the global package. We commit to deliver to you on time and very quickly. As I mentioned, I obtained important free options for you that my Management does not always offer to other customers. I really believe that we must have you as our client, and that you can even bring us more high-profile customers like you.”

John: “I am sure that a car dealer will also be very happy to offer me free

options. Everyone does it.”

Henry: “John, if some car dealers can offer so much why would our showroom still exist? Actually, we are doing very, very well. I often have customers taking time to check all the possible distributors, showrooms and come back to my offer. When the price is the same, what you really need to care about is the reliability, the service. Again, I can reassure you that if you have any possible questions, you can just give me a call and I will take care of it personally.”

- Fair price

Customers believe that it is possible to ask for a price decrease because the product value isn’t worth the price published. The best way to defend fairness in pricing is to not open the door to this discussion in the first place.

Let’s get back to Lisa’s price objection:

Lisa: “For this price, I am pretty sure I can find similar bags at top

prestigious brands.”

Lucy: “But maybe not as exciting as the one which is on your shoulder now.”

Lisa: “I mean that the price seems too high compared to what it is elsewhere. I would say that the price is at least 30% higher than it should be, compared to other brands.”

Lucy: “I understand that you need more confidence in our brand. We are

one of the most prestigious leather goods Maisons and our prices reflect the brand value and the extraordinary quality. Our prices are not only true, and established with a consistent price policy worldwide, but also fair—totally reflecting the commitment and the quality behind each creation. Please be fully reassured on our pricing.”

- Good price

Some customers will look for a “good price”—a price that is more advantageous compared to the “fair price.” The customer wants an improvement; it could be an additional gift or some price accommodation. He wants to feel it is a good buy. Customers want to make sure they can benefit from promotions, and not miss a possible opportunity in the purchase.

Table 5.6.D Responding to price bargaining

Customer

Response Angle

Fair Price

I am a fair person

"Sir, this is fair and you are not paying more than anyone else"

Good Price

I am a reasonable person

"Madame, this is a very good offer and you can be very happy with it"

Best Price

I am a champion

"Sir, we have already offered you the very best that we can offer. No one can get a better price than you"

- Best price

they can. Other customers will be “sportier”; they want to be sure to get the best price. Good is not enough; they want to be sure that no one can get a better price than they can. They might be business people or VIP clients of other brands. For them, negotiating is part of daily life and they negotiate sharply (Table 5.6.D).

Time To Summarize

Objections

An objection leads to a decision.

An objection is positive: it’s only the expression of a fear.

An objection is no more than a question.

An objection is only an expression of the customer’s point of view.

Dealing With Objections

In 3 steps: genuinely accept, deal smoothly with the objection and close politely.

There is no right or wrong, only different points of view.

Balance the customer’s objection with your own position/proposal.

Creating doubt in the customer’s mind is good enough.

 
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