Unfortunately, our decision is made. I know how you must feel. But everybodys looking at ways to get better prices today, so this is just another cost reduction decision. I hope you understand. At any rate, good luck. As you know, Jennifer, you win some and you lose some. And, with that said, Jennifer is dismissed with a shake of the hand.

As you might expect, Jennifer is beside herself. She cant wait to get back to her office and read the riot act to Lumbers executive vice president, Vince Carrabba, whom she had warned that her proposal to Thunder Bay was too pricey.

Vince, I told you so. You guys wouldnt listen, would you? David told me that price was the reason we didnt get the contract. Some days this whole place just makes me mad. I have to take a break.

Jennifer proceeds to her office and calls Cameron, her colleague at the firm. She asks him to meet her for lunch so that she can emote. At lunch she says, Cameron, do you realize that for the last three years I have been earning less money each year because of our prices?

Cameron, who hasnt been losing much business because of pricing-who has, in fact, increased his personal earnings substantially year after year-asks Jennifer, Have you ever thought it might be something that you arent doing or should be doing that is causing you to lose so often on price? Have you considered that the customer may have needs other than price that you havent explored fully? You cant always count on people to tell you everything, Jennifer. You may want to reevaluate your probing techniques.

Cameron, youre starting to sound like Vince, so quit it. My customers are just flaky, she retorts.

IS PRICE THE PROBLEM?

In the above scenario, could Jennifer have been having a value problem? I think so. As Tom ONeil, president of Office Works (a distributor for one of the worlds premier office furniture manufacturers), says, In todays business world, our customers are looking for the best value. If our salespeople cannot create value for their customers, then why should we expect one of our customers to pay a higher price for a similar product or service that one of our competitors offers?

I believe that Jennifer probably lost the sale because she did not distinguish her offering from those of her competitors. Customers will then take the lowest-price offering when they dont see any difference between products. Price isnt the problem. Price is the symptom of a deeper problem. Price is a polite way of bringing up other concerns, Neil Rackham says. In the later stages of a complex sale, a price objection may signal an unresolved consequence for the buyer. The salesperson should help the customer identify those concerns and worries, but cant solve them. Only the buyer can do that. 16

CONSEQUENCE ISSUES

Lets look at Jennifers example again.

In Jennifers case, Davids unspoken consequence issue may have been that Jennifers company, Lumber & Board, was a new company (only five years old) and its competitor, Able & Abler, was much more established (over thirty-five years old). David may have feared that Lumber & Board didnt have the proven track record, experienced staff, or creative ideas staff to handle the demanding project. Reducing the price will do nothing to resolve any of these consequence issues.

Sometimes the real issue is price. But before you start to negotiate price, follow these three steps first.

STEPS BEFORE NEGOTIATING PRICE

1. investigate the clients decision criteria. Find decision criteria that not only are important to the client but also can help the client separate your offerings from your competitors. Remember, its not what you perceive the criteria and differences to be, but what the client perceives.

Ask yourself if your customer will be able to measure or determine which decision criteria you meet better than, as well as, or worse than your competition. Will the decision criteria that the client is using permit him or her to distinguish among the options effectively?

For example, the customer may feel that product quality is important. Since quality is a subjective characteristic, the salesperson needs to make sure that the client can determine which of the competing product solutions is superior with respect to quality. How does the customer measure the quality difference among the various options? You may have to provide the client with some quantifiable standards used to measure quality.

Describing the decision criteria in terms of measurable, objective standards is important because customers are more comfortable using objective criteria. If your definition of quality is better than your competitors, then the customer will be more likely to use your definition. If the customer cant distinguish between alternatives because a criterion is too subjective, he or she is not likely to use that criterion when making the final decision.

In Jennifers case, the client was interested in experience. Jennifer didnt explore the definition of experience with David. She accepted the definition that experience meant years the company had been in business. Lumber & Board was a new company (only five years old), and its competitor Able & Abler was much more established (over thirty-five years old). But wouldnt David have been interested to