Negotiating Tips, Negotiation Strategies May 22, 2010

What's your best price?

If you are in sales, you have heard the line “what’s your best price?” plenty of times. Buyers are always trying to get the “best price.” The problem is that a buyer’s best price is rarely the seller’s best price. Sellers are trying to make money and buyers are trying to save money.

The goal in any price negotiation is to get to a place where both sides feel they are getting what they need. What is the best way to give and get the “best price?”

At FastCompany’s member’s blog, Tibor Shanto recommends using the “WOW” Approach to Price Negotiations.” (Read the post here)

Shanto suggests that sellers approach price negotiations based on setting three price levels: Wish, Optimal, and Walk away (WOW). Wish can be seen as the rack rate—the rate the seller wishes he/she could get. Optimal is the balanced rate—the rate where both the seller and the buyer are getting the best value. Walk away is the price the seller will not accept under any circumstance because it is too low.

The WOW approach makes sense because the optimal price is the win-win price. It also makes sense to think about these levels before entering any negotiation. If a seller has not established what he or she would accept as a final price offer, he or she will be open to haggling.

In general, every seller should build room to negotiate within their price structure. Sellers want to sell, but not at a loss. Buyers want to buy, but not at the expense of their budgets. Finding the balance should lead to a sale that satisfies both parties.

However, probably the best way to deal with price issues is to get into a process of value creation. As Dr. Chester Karrass says: “The way to settle price differences in a manner that leaves both parties satisfied, is to move into a process of determining what ‘non-price’ attributes are available that can increase value for both sides. Then the importance of price issues start to evaporate.”

How do you negotiate your best price?

How do you negotiate your best value?

THE PROGRAM WAS GREAT! MY SEMINAR LEADER AND THE STRUCTURE OF THE COURSE KEPT ME CONSTANTLY STIMULATED. I NOW AM BETTER PREPARED TO GO INTO AN IMPORTANT NEGOTIATION MEETING AND STAY IN CONTROL, WHILE FINISHING THE MEETING SATISFIED.

Deanna D.
CASE MANAGER at THE JACKSON LABORATORY

IF YOU HAVE THE TRAINING BUDGET AND TWO DAYS TO SPARE, YOU'LL STRUGGLE TO FIND A PROGRAM MORE FAR-REACHING, ON-POINT, AND INSTANTLY IMPLEMENTABLE.

Jeff G.
BUSINESS DEVELOPMENT MANAGER at THE M.K. MORSE COMPANY

EXCELLENT COURSE, BRINGS MORE CONFIDENCE IN MY ABILITY TO NEGOTIATE. I THINK THIS COURSE IS A MUST FOR ALL EMPLOYEES WHO DEAL WITH CUSTOMERS.

John S.
CHIEF ENGINEERING MANAGER at EXXONMOBIL

THIS WAS VERY EFFECTIVE WITH A STRONG FOCUS ON BOTH-WIN NEGOTIATING.

Kathleen L.
SENIOR ANALYST at BLUE CROSS/BLUE SHIELD OF MICHIGAN

THE KARRASS CLASS WAS THE SINGLE BEST TRAINING CLASS/SEMINAR I HAVE EVER ATTENDED. EVERY TIME WE DID AN EXERCISE IT TAUGHT YOU WHAT TO DO DIFFERENTLY NEXT TIME. THANKS.

Kim C.
PROCUREMENT at AMERICAN EXPRESS

THIS PROGRAM HAS GREATLY INCREASED MY CONFIDENCE AND ABILITY TO NEGOTIATE FOR MYSELF AS WELL AS MY COMPANY.

LaDonna E.
SENIOR STRATEGIC BUYER at HALLMARK

THE NEGOTIATING CLASS WAS VERY INFORMATIVE. THE INSTRUCTOR PROVIDED AN INSPIRATIONAL MESSAGE THAT CAN BE APPLIED TO EVERYDAY LIFE.

Mary S.
INTERNATIONAL SOURCING at FMC TECHNOLOGIES

WE NEGOTIATE EVERY DAY OF OUR LIVES, BOTH PERSONALLY AND PROFESSIONALLY. THIS COURSE DEFINES THE PROCESS AND PROVIDES TECHNIQUES TO ACHIEVE SUCCESSFUL RESULTS.

Phillip H.
VICE PRESIDENT at GE

PRIOR TO THIS CLASS I FELT AS THOUGH I WAS GETTING EATEN ALIVE BY INTERNAL NEGOTIATIONS WITH SALES REPS. NOW I FEEL PREPARED TO CHALLENGE WHAT THEY ARE SAYING AND BET TO THEIR REAL NEEDS.

Steve Q.
PLANNER at HONEYWELL

MANY PEOPLE FAIL TO ACHIEVE THEIR POTENTIAL BECAUSE THEY DON’T SEE THE OPPORTUNITIES TO NEGOTIATE A WIN/WIN AGREEMENT WITH THEIR COLLEAGUES. THIS CLASS IS AN EYE OPENER TO THIS DYNAMIC..

Stuart B.
CONTRACTS MANAGER at HEWLETT-PACKARD
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