Apples and Oranges

One standard negotiating technique used by traditional buyers is comparing the price of a lesser offering to the seller's price. If the seller responds to this tactic by posturing, he or she somewhat weakens the position, because the discrepancy between the two offerings has not been addressed.

A more effective countermeasure is to be prepared to cite one of your major differentiators—that is, a capability that you provide that the lesser offering does not. As an example, assume that a sales force automation package from your competitor, the ABC Company, costs 30 percent less—a big difference—but, unlike your product, does not dynamically track close rates by individual salesperson at each stage of the sell cycle. The discussion might go as follows:

Buyer: We like your system, but ABC's offering is 30 percent less than yours. What can you do for me on price?

Seller: You could choose to go with ABC, but have you considered that by having to use standard close rates for each step of the pipeline, a salesperson with a low close rate could inflate the gross forecast by entering two or three large opportunities? Can you see how that could cause you to miss your target?

Buyer: We would run that risk by using standard close rates.

Seller: One of the things we discussed was that when the forecast is being generated, our system can apply historical close rates for each rep at each milestone, so the final forecast will be adjusted. One of your major issues is forecasting accuracy. Are you more comfortable with applying customized close rates by rep?

Buyer: I would have a higher level of confidence.

Seller: So comparing our offering and ABC's really isn't an apples-to-apples comparison, is it?

Buyer: Not exactly, but I would still like to see you sharpen your pencil.

At this point, after neutralizing the unfair comparison, the seller can now begin posturing with the prepared polite "no" questions.