Every business has customers that they cannot afford to lose. Converting one of these big brand customers opens the doors to dozens of other customers from the same league. One easy way to do this is by dropping the price on your product or service. But oftentimes that may not be enough since such customers are used to price wars and low ball offers from vendors eager to do business with them.
Building a relationship
A number of studies have shown that customers tend to make purchases from businesses they like and trust. In these cases, sales are less about your product features or price and more about how much trust, credibility and earnestness you demonstrate to the client. According to a survey published by American Express, nearly 59% of American customers are eager to try a new brand or company if it promised a better service experience. From a business’ perspective looking to negotiate a contract, your battle is half-won if you are successful in establishing your credentials and trustworthiness to your prospective customer.
There is a reason why it is cheaper to renew a contract with an existing customer than it is to sign a new one. Customers are wary of new partnerships that also come with their own set of uncertainties. Breaking this gridlock requires businesses to put forth pre-emptive clauses in the contract that make your offering more attractive to your customers. For instance, you could introduce a penalty clause in your contract that entails you to pay twice the penalty for late delivery during the first year of operation. This demonstrates your earnestness to the customer which makes it all the more lucrative for them to sign on the dotted line.
Don’t focus on price
Fixating your sales on the price point essentially brings down the value of your product or service. In such a scenario, the only metric for the customer to evaluate you against competitor would be your quoted price. One way to avoid this is by redefining your product package. Instead of selling your product as a commodity, redefine it to remove the ability to compare it with rival offerings on price. For instance, if you sell branded shoes in your store, you could raise the prices and include one year of free repair and servicing – this raises your product profile and also makes it difficult for the customer to evaluate your offering solely on price.
Listen to the customer
Sometimes, it is simply not possible to wean a customer off their price discussions. In such cases, you may either choose to walk away, or stop talking and start listening. If you are talking to a big brand customer, then it is a good idea to pick the second option. By asking questions and simply listening to your customer, it is possible to identify other problem areas that the client faces with their current solution. These additional details could help you define a new offering for your customer that does not compromise your price point but at the same time addresses the other concerns that the client has about their vendors.
Established customers are hard to get and as a business, it is important to go out of your way to entice your customers. This does not always have to be with the help of discounts. Using the tips above, you may be successful in acquiring high value customers at the price point you dictate while at the same time demonstrating your credibility to the client; sometimes trust is the most important metric that influences a customer’s decision to go with a vendor.