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?