The Importance of Price Negotiation – The Vernon Company
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The Importance of Price Negotiation

I once heard of someone who had clogged the drain in their kitchen sink. After trying to unclog the drain himself, he decided to call a plumber from a national company which specialized in blockages. When the plumber arrived, he took a look around, unpacked all of his tools, laid them over the kitchen floor and examined the sink and the drain. His estimate for the job was $400.

In his knowledge from past experiences, this man knew that it would not take long to fix the clog…maybe 15 minutes. There was no way he was going to pay the plumber $400, so he walked the plumber to the door. Before leaving, the plumber asked the man what price he had in mind. The man told him he normally paid about $80 for this type of job. The plumber left and the man called a local plumber.

A short while later, the man’s doorbell rang, but it was not the local plumber. It was the plumber “specialist.” He said he had talked to his supervisor and could do the job for $100. The man asked him to do it for $50 instead, because the plumber “specialist” had already wasted a good amount of the man’s time. Flustered with the request, the plumber “specialist” left again. Soon after, the local plumber showed up and fixed the clog in 15 minutes, charging his minimum house call rate of $75.

As salespeople, it’s important to be very careful with how pricing is presented. It is critical to not only make sure an item is priced reasonably, but that once that item has been quoted, you can stand behind that price. If not:

1. Your customer will never trust your pricing again.
2. The customer will never trust your company again.

Once the sense of credibility and trust are gone, it is very difficult to gain them back. Most times, they are gone for good.

Price negotiation is a part of doing business. It’s how you present and discuss pricing that you must be careful with. Your price should fall into a range that the customer feels is within industry standards. If you decide to reduce that price, it should be done carefully. Customers want to feel like they have done an intelligent job negotiating, not that the sales people they were working with were trying to take advantage of them.

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