How do you negotiate prices and discounts without losing credibility?

3 Establish trust and rapport

Negotiating is not just about numbers and logic, but also about emotions and relationships. You need to establish trust and rapport with your customer, by listening to their concerns, showing empathy, addressing their objections, and providing value-added information and insights. You should also use positive and respectful language, avoid confrontational or defensive tones, and express your appreciation and recognition. By building trust and rapport, you will increase your credibility and influence, and create a win-win atmosphere.

4 Anchor and justify your price

When you present your price, you should use anchoring and justification techniques, to set a favorable reference point and explain the logic behind your offer. Anchoring means starting with a high but reasonable price, based on your value proposition and market research, and then adjusting it according to the customer's feedback and behavior. Justification means providing evidence and reasons for your price, such as the value you deliver, the costs you incur, the quality you guarantee, and the risks you mitigate. By anchoring and justifying your price, you will avoid underpricing or overpricing your solution, and create a perception of fairness and transparency.

5 Offer value, not discounts

One of the most common mistakes that sales engineers make is to offer discounts too quickly or too frequently, without getting anything in return. This can erode your credibility and profitability, and signal that your solution is not worth the original price. Instead of offering discounts, you should offer value, which means adding or removing features, services, or benefits, to match the customer's needs and budget. You should also use conditional discounts, which means giving discounts only if the customer agrees to certain terms, such as a larger volume, a longer contract, a faster payment, or a referral.

6 Know when to walk away

Finally, you need to know when to walk away from a negotiation, if you cannot reach a mutually beneficial agreement, or if the customer is not serious or respectful. You should have a clear idea of your minimum acceptable price, your best alternative to a negotiated agreement, and your red flags and deal-breakers. You should also communicate your expectations and boundaries clearly and politely, and be prepared to end the conversation if necessary. By knowing when to walk away, you will protect your credibility and reputation, and avoid wasting your time and resources.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?