Price negotiation: 5+1 ways to win with purchasing managers

Price negotiation: 5+1 ways to win with purchasing managers

Price Negotiation with Purchasing! Photo: Kzenon/ Resource: www.bigstock.com

As a small business owner in B-to-B you may find yourself struggling during price negotiations. I know: It’s sometimes not easy to cope especially with the purchasing managers of large corporations.

But watch out: Don’t believe the 3 myths for price negotiations with purchasing managers. I busted them in my latest video and blog post: Purchasing Manager Myths – Busted!

I want you to successfully sell your products and services into B-to-B corporations. So, here are 5 useful tips for dealing with the procurement department in these companies:

1. Don’t lower the price without getting something in return

Only make price concession if you can get a comparable value in return. Example: You are prepared to reduce your price by 2%. Then you should not deliver the product, but the customer should pick it up instead.

Never, ever lower the price without getting something in return, only to get the order! And I mean never!!! If you do this once, you are finished. During future negotiations, the buyer will continue to press you for price reductions.

2. Avoid negotiating under pressure

By all means: Avoid negotiating when pressed for time, or if you are under pressure to succeed. Most people – including myself – are poor negotiators when they have their backs against the wall.

3. Prepare thoroughly for the price negotiation!

Figure out what is truly important to the customer, what his needs are, and how you can meet these. What value do you provide for the customer? Articulate your value propositions before the negotiation. Write them down. This will force you to focus your thought process.

4. Don’t let the buyer nickel and dime you!

Some buyers attempt to negotiate every detail to reduce the price each time. Instead, note the buyer’s needs without making concessions, and then negotiate the package as a whole.

5. Don’t lose your cool

Don’t take the procurement manager statements personally. It’s just about business!

The ultimate additional tip!

Do you still have a queasy feeling when you think about the next negotiation with a procurement manager? Then I have the ultimate tip about how to confidently get your arms around any negotiating situation with a buyer:

  • Attend a procurement seminar!

Attend a one day procurement seminar focused on your industry! You will learn a lot about the tricks, the needs and the problems of procurement people in your industry. This is a great way to learn what makes buyers tick!

What tips do you have for price negotiations in B2B ?

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  • Heather Stone

    Bernd. Number one is so important, because I think there’s an instinct with many small businesses that dropping prices will lead to more interest and sales. It can also lead to more work at less pay. Thanks.

    • Bernd Geropp

      Heather, you are absolutely right. You loose credibility with your customer if you lower your price without getting something in return. Thanks for your comment.

  • Henning Russlies

    Hey Bernd, very good points! Thanks for it! In my opinion it is also very important that you establish great relationships with procurement professional of your customers. For some types of procurement professionals this is really challenging. One good thing to do is to share market information. The procurement professionals should be keen on market trends and changes in cost structure. On the other hand it is important to get insides from the procurement strategy, processes, methods, personnel and organization. For example it is very important to know how procurement success is measured. Most of the time it is not only savings. It could also be supplier performance that you can influence. Just ask and help to achieve the goals of the procurement department of your customer. Looking forward to see you next month in Düsseldorf, best regards, Henning

    • Hi Henning, you are right. That is important. Looking forward to meeting you in Düsseldorf.