Here’s a core issue that I believe defines the difference between success and failure when you negotiate with prospects. I call it “bid urgency”—the pressure salespeople feel to offer a price for materials before understanding the situation with prospects. Bid urgency is the enemy of profit. It’s the weapon your prospects use to create a competitive advantage. Your sales success requires you prepare countermeasures that offset the pressure of bid urgency.
Let me clarify that I’m focusing on sales activity with prospects, not existing customers. The sales process for a customer should be very different. Customers are loyal buyers who know your company’s products, personnel, and policies. You can depend on their transactions and probably should act with a sense of bid urgency to satisfy their needs. The same isn’t true for prospects who haven’t bought anything from you … yet.
Bid urgency begins before meeting a prospect. Typically, during an introductory phone call, the prospect will ask the sales rep to price on an upcoming project. The salesperson rightly suggests a meeting prior to delivering a price, but is rejected by the buyer. Instead of insisting that a meeting is essential, the salesperson who feels bid urgency accepts the negotiation tactic and blindly offers prices without knowing any critical information about the client or the project.
It’s possible (or likely!) that the buyer isn’t genuinely interested in choosing you as a new supplier. The buyer might be trying to keep an existing supplier honest—or worse, it’s even possible the buyer is doing a favor for his existing supplier by passing on your pricing information as a form of market reconnaissance. In fact, many salespeople voluntarily invite bid urgency with the question, “Do you have anything coming up that I can bid on?”
A prospect is happy to offer a set of plans or a material list. After all, it takes only a few moments to provide the information; it’s the salesperson who invests hours creating a bid. This is exactly the problem to be avoided, because it can cost you hundreds of hours during the course of your career. Deal with this by request a meeting with a prospect prior to delivering a price.
The prospect usually answers, “I’ll tell you what. Put together a price. If you’re in the ballpark, then we’ll talk.” The salesperson accepts this because he or she hasn’t created a successful countermeasure.
Instead of succumbing to bid urgency, I recommend you hold firm on your request for a meeting. Tell the prospect, “There is really no value in me giving you a price until I know more about your business. I guarantee I’ll be high and, truthfully, I don’t need the practice at bidding.”
After the prospect incredulously doubts your sincerity, calmly add, “Really. I don’t know about your delivery and service expectations. I don’t know what volume of business you might commit to or what other products we can add to the mix to become more competitive. I don’t know enough about your construction practices to show you ways I can save you money. If you can invest 10 minutes to share details about your business, then I can offer you my best price. So when can we meet?”
This approach helps you filter out time wasters from legitimate prospects. It also saves you lots of wasted time reacting to the false bid urgency prospects use as a negotiating tool. Slow down the bidding process with prospects. You’ll gain more control of your time and be richer for the effort.