How to negotiate price increases, both getting a price increase for sellers as well as defending against price increases for buyers, is a HOT topic at the moment. Geopolitical decisions have disrupted global supply chains and sellers have all the power right now. Buyers are often negotiating delivery dates, and quantities, sometimes price doesn’t come up at all!
That said, sellers are still afraid of their customers and buyers of the world are generally competent at creating FUD (fear, uncertainty, and doubt) to gain leverage in price increase negotiations.
Whether you’re a seller or a buyer, we have the perfect material for you. Negotiating for Success – Price Increase.
How to: Tips for Sellers and Buyers
As a seller, did you know there are tactics a buyer can traditionally take to defeat, minimize, and/or delay your request for a price increase? Take a look at the tactics below and ask yourself if you know how to defend against them. As a buyer, ask yourself how you can use these tactics to defeat, reduce, and/or delay a price increase.
10 Negotiating Price Increase Tactics
- The Praise/Guilt Offset, where a customer tells a supplier they “thought they were a world class partner that had lean 6-sigma processes in place to drive prices down.”
- The Power of Work, where a customer makes a seller do all the work to prove they deserve the increase.
- The Budget Cycle, where a customer says they understand, but the timing isn’t right, so the seller will have to wait.
- The 3rd Party tactic, where a customer says they’d agree, but someone else (the CEO, etc.) is saying no.
- The “Fine, but you owe me” tactic, where a customer agrees to some increase in exchange for some future favor.
- The Praise/Guilt Offset: Sellers should explain they are world class and the increase would be even higher without those efforts
- The Power of Work: Sellers should NOT provide data, or only provide the minimum amount possible – and don’t do any work. The customer will only use any information provided to create a beneficial position for themselves. Not to mention it delays any increase, a win for the customer.
- The Budget Cycle: Sellers need to be strong and demand the increase immediately. Any delay is a win for the customer.
- The 3rd Party tactic: Never take a no from someone not empowered to say yes. Demand a meeting with the 3rd Party.
- The “Fine, but you owe me” tactic: The seller should take this as a sign they are the customers best option, and not enter any future negotiation “owing something” but rather consider raising the bar and asking for even more.
Negotiating Price Increases Workshops
Need help understanding how to capitalize on the above tactics to increase sales? TableForce developed and delivers proven processes that secure, and defends against, price increases We’ve done so for decades. Our regular repeat clientele confirm value.
We have one client who tasked their sales team with getting a price increase. Their sellers who took our workshop delivered an average of 2X vs their sellers who didn’t take the workshop. The manager of the team was promoted into a large global role!
FACT: The global supply chain is getting hammered. Sellers are being told – “get us an increase”. Buyers are being told “do not take any increases”.
FACT: If you don’t get in front of this, you will not succeed. Both sides.
FACT: Our Negotiating for Success – How to Negotiate Price Increases workshops helps you get in front of this. Fast and effective. Proven.
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