It does not matter what one is doing in their life; what matters is that they have to remember their own worth or value. Once you are able to understand this, you will be able to define the value of your product or service.
One thing to always keep in mind in sales is to know the value one brings to the table and the quality of service/product they are able to deliver. That should be the bare minimum in terms of the number that one should be quoting clients.
Only after that should they think about what the client is able to pay. But, one should never undervalue or bring the price below the value that they think their product or service is able to provide to the client. You must be able to negotiate with potential clients.
Life of a salesperson is very interesting and negotiations and dealing with low ball offers comes as a part and parcel of sales career. In this blog, I will tell you how you can negotiate in sales when you get a lowball offer.
What is a lowball offer?
A lowball offer is a slang phrase for an offer that is much cheaper than the seller's asking price, or a quote that is intentionally lower than the amount the seller expects to charge, that is made to a seller. When something is purposely undervalued, it is referred to as "lowballing."
It is most typical to make lowball bids in order to put pressure on sellers who may be under time constraints to sell their assets. Alternately, prospective purchasers may begin discussions with a lowball offer in order to measure the seller's perceptions of the asset's true worth before increasing their bid. Depending on how the talks progress, this may provide an edge to the buyer.
Lowball offers are also used as a manipulative sales technique that entails initially offering a low price and then saying that the quote was erroneous and that the true price is far higher. A number of clients are likely to be turned off by this strategy, believing it to be a form of bait and switch. Others, however, may accept the increased price since they have already chosen to make the buy.
How to negotiate a lowball offer?
Many businesses at the start do work to break even or sometimes at a loss just so that the relationship is maintained. This is usually considered to be normal for any business at the starting point. From a service point of view, it is also normal to do work for a very minimal cost to add the work to one's portfolio or build potential clients.
Later on, in a running business, one should not negotiate pricing; instead, they should negotiate deliverables. One needs to remember that clients also have a budget, but their lowball offer does not necessarily mean that your service or product is expensive.
The first step to dealing with a low ball offer is to understand the client's budget from their side so that one can back into a reasonable deliverable to the service team. When the clients do not provide any information on their budget, it is best to discuss with the client what the project's primary goal is and what their vision is for the final outcome.
Once the goal and the vision of the final outcome or result are defined, you can put forward a lower but reasonable offer, focusing on the key points. For example, maybe the client does not need two revisions, or maybe there are certain aspects of the project that the client can help out with that lower the overall deliverables.
Sometimes, even after this discussion, clients might still ask for a discount. The two most common phrases that you will get to hear as a salesperson are "Person XYZ offered me something cheaper" or "I am an old client; can't you give me a better rate."
The best response to this would be to say that you are fixed on your price as that is the policy you follow in your business model. However, if they are willing to lock you in for a longer period of time or they purchase xx amounts of hours for you with a validity of a period of certain months, you can take a certain percentage off the total. This will make it feel like they are getting a value deal, and the salesperson would be locking in the client for a longer period of time with higher revenue.
At the end of the day, the best way to negotiate a lowball offer is just by understanding the clients' requirements and wants. After which, you would break it down for them and explain what you can do for them on their budget.
It is very important to keep cool when you are in the situation of having a low ball offer before you, and you will have to act smart on how to turn the table around. The more one talks to the client and the better understanding they have of the project, the better they can quote the client.
Sometimes the client's main objective is to do the task for as little as possible. In these situations, it is best to put them down and guide them in a direction where they can get their work done at that price point. This way, one might not get the deal, but they will definitely maintain the relationship for a future project.
Tips for handling low ball offers
Here are some tips for handling lowball offers:
Always respond gracefully
When you respond defensively, you will only create a barrier than making progress or entering into a negotiation. As a salesperson, you should always deal with a client professionally, strategically, and gracefully.
Be prepared with counteroffers
You need to be a skilled negotiator who is able to overhear the buyer's innermost thoughts. You'll be able to tailor your response to meet the needs of the consumer once you figure out what's most essential to them. A lowball-offer issue might take a few days to work through. It takes time to find a good balance, so be patient.
Negotiate other terms
You may be unable to progress on pricing, but you may make progress in other areas. During the conversation, determine the settlement date, terms, and conditions. You need to give them what they want in order to receive what you want in return.
At this point, one thing that I would like to highlight is that "Any negotiation has a limit." A low ball offer is something that all salespersons have to deal with.
I hope this blog was useful for you and that you will be able to deal with lowball offers in the future. To know more, visit www.webdew.com.