A Research-Backed Sales Negotiations Tip on Setting a Price
Want to know the top tip on suggesting a price during sales negotiations? Be precise.
As you know from your sales negotiation training, the time inevitably comes when you must share the price of your offering. Hopefully you have already persuaded your client of the value of your service compared to the alternatives but still, putting forth an actual price can be a sensitive and important moment.
There were probably many crunched up notes as you struggled to balance the cost to you, the value to the customer and include a number that would make your time and effort worthwhile. Our advice? Do not offer a round figure. Here is why.
Our sales negotiation training experience in role plays and research from the Harvard Business School shows that precise numbers are much more believable and acceptable. Social psychology suggests that market outcomes improve when prices are not rounded off.
Just think of your own reaction to buying a car at $40,000 rather than $41,250. Even though the first price is cheaper, the second price implies that someone went through careful analysis to come up with the figures. Social psychologists say that we just naturally assume that there is more logic and thoughtful calculations behind a specific number. And, vice versa, we assume that a ballpark figure is only a guess based on vague and perhaps inaccurate knowledge.
This holds true whenever you cite numbers. How about when you agree to reconvene in a month versus in 30 days? The specific number of days shows true determination to meet. You are likely to pull out your calendar and mark just when that meeting will take place. On the other hand, a “month” is likely to become a month-and-a-half or even two months or more.
People simply attach more credence to precision. Exact numbers in a price imply that there is a lot of data to back it up. Specific timing implies that you will plan around a certain date. Be smart when you quote a price…be precise and your target will be more receptive.