I was once part of a $20 Million company that was oh-so-close to the next volume discount with a major manufacturer. We gathered the salespeople together, and made the huge push to sell that extra million.
Thanks to a lot of hard work and effort, we hit the target, and saw our product discounts increase from 32% to 40%. Eight points of badly-needed margin. We were excited about the additional profit we would earn.
How long do you think it took the sales team to totally give that extra margin back to the customers? Less than a week! Within one week, our company gross margins were exactly what they were before the extra volume discounts.
Use the "Reverse Flinch"
Of course, "The Flinch" works just as well for salespeople. Imagine for a minute you are in Mexico negotiating with a street vendor for some item of tourist trash. This process is the same as the one above:
Q: You can have this sombrero for 700 Pesos
A: 700 Pesos!?!
Q: For you, I can sell it for 500 Pesos
A: 500 Pesos!
Q: Tell you what, I'll throw in this nice handbag....
And so on...
Now, go ahead and do this with YOUR customers!
When you get to the price negotiation with a buyer, start the flinching off on the right foot.
Q: Do you have a budget in mind?
A: $45,000
Q: $45,000! For this type of solution?
A: Well, we might be able to go up to $50,000, if the ROI is there.....
Q: $50,000 !?!........
Make "The Flinch" part of your own standard negotiating tactic, and watch your margins blossom!
Don't forget, this tactic works equally well with spouses, kids, relatives, and neighbors. Even In-Laws, if you dare!
In other words, the longer the customer takes to make a decision, the better the price they get! No wonder sales are taking longer and longer.
