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December 26, 2018

Negotiating Tip 63: Positioning The Initial Price

An easy way to avoid “sticker shock”

Sam from Denver sent an email to me commenting on one of the modules in my Negotiating Blueprint Video Series.  He shared that he achieved immediate success from learning how to better formulate and communicate an initial offer or proposal. 

He coined the phrase "positioning your initial proposal" and I'd like to expand on what he meant by that. 

Don't underestimate the importance of that first offer or proposal and its influence on the final outcome of negotiations.  Put another way, how we begin determines how we finish. 

If we simply state a price and await a response or counter offer, we miss sending a message that could influence our negotiating opponent.  Instead of just quoting a price we'd pay or a price we'd sell for, why not add a modifier?

That modifying phrase positions your price and, to some degree, brackets our opponent. 
 
  • As a seller, you might say,  "I'd want $350 for this."

Better positioned, you might say,  "It's worth close to $500, but today I'd consider something under $400." 
 
  • How much effort did it take to add a few words to modify or better position your price. 

If your item has a price tag on it that already states the price, don't give up on the positioning opportunity. 

It might sound like,  "As you can see this item is available today for $350.  That's a mark down that we probably won't be able to duplicate in the future."

One result that my friend Sam in Denver achieved was that by sharing that he has already discounted the price, his opponent seemed more prone to seeing the good deal value and, more importantly, he didn't request a further discount.
 
  • Will this positioning of the price work when we're the buyer?  
 
  • As a buyer, you might say,  "I'll give you $350 for that." 

Better positioned, you might say, "This item could very well work for me and I was thinking of paying no more than $300 for it.  I could possibly extend to $350.  Could that work for you?"

Compare the two buying proposals.  Can you see the stark differences in how they'd be received? 

Again, taking a little extra effort to position your price proposal can dramatically impact the final result.  

That's what good negotiators do.  You should too as you KEEP Negotiating.

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