Contrary to popular belief, buyer behavior follows certain patterns. In fact, our primary research, as well as subsequent work with our clients, shows that 97% of buyer behavior in sales/negotiation can be anticipated. And that means a company can develop strategies to deal with it.
For example, buyers can virtually always be counted on to refer to their alternatives (the seller’s competitor, doing nothing, or doing it themselves), and/or ask for concessions (price, free support, extended warranty, etc.). Globally, the most common buyer tactic is “I can get the same thing cheaper,” which follows the pattern of referring to an alternative and asking for something. In addition, even though the words change —“Your contracts are so much more difficult than everyone else’s” or “Everyone else provides that for free”— the pattern still holds. About half the time, though, customers don’t even reference their alternatives — they simply ask for concessions with phrases like “Lower your price,” “It’s not in my budget,” “Sharpen your pencil,” “I want favored nation pricing,” etc.
The main problem is that salespeople and leaders do not anticipate these tactics and do not have data ready to counter them. It's not a surprise that buyers refer to their alternatives and the supplier’s solution as the “same thing”— it’s clearly in their best interest to commoditize the supplier’s efforts and use that pressure for price reductions, discounts, and other giveaways. And yet, our experience suggests that sales teams lose millions of dollars every year because they neither expect nor prepare for these kinds of arguments. Some of this may seem “tactical” rather than “strategic,” but the reality is that this is what’s happening on the front lines. And the effect is to put downward pressure on margins and upward pressure on contract risk.
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