Week 43 – Close Your “Appeal Ear” – Chapter 11

At the Munich October Fest 2016 you have to pay more than $13 for a liter of poorly drawn beer, and yet nowhere else in the world was more beer being sold at this time. Why is that? I will now delve into the psychological reasons underlying price negotiation and explain how to put a muzzle on your inner price cutter.

What would you pay for a burger? $4,99? What about $5,99 or $6,99? Even $8,99? I’m pretty sure you’ve seen menus with burgers for about $20 and even more. We’re talking about burgers of a similar quality. Why is this?

Let’s compare a $4,99 to the one for $5,99. That’s a spread of 20 percent. More than many retail products bring in. In theory, a consumer would be OK with both of these prices. What’s your advantage of this insight? What can you do to render the value of your product more important than its price?

To deal masterfully with objections is a crucial skill in selling. Especially when the objection is of the “too expensive” variety. Even seasoned salespeople can stumble at this juncture. But it doesn’t have to be this way. Therefore you should male use of the right tools to deal with this issue.

The psychologist and communication expert Friedemann Schulz von Thun devised an ingenious model of communication. It claims every statement conveys four different messages: factual information, relationship, appeal, and self-revelation.

Let’s say you prepared the meal for your significant other. First, there is the “tomato-tinged carrot soup.” Then there is the “pearly barley risotto with green asparagus.” Your partner peer into the plate and suddenly says, “Wait, there’s something green in my risotto!”

Here are four possibilities of your reaction:

1. Factual information: You hear, “There’s something green on my plate,” and answer, “Yes, that’s green asparagus.”

2. Self-revelation: You hear, “If I were to cook, there would be no green stuff,” and respond, “Then why don’t you cook, if you can do better.”

3. Appeal: You hear, “Take that green stuff off my plate,” and you say, “Oh, I didn’t know you don’t like green asparagus. Wait, let me take it out for you.”

4. Relationship: You hear, “You don’t really love me, otherwise you’d know that I don’t like stuff like this,” and equally hurt, you answer, “Every time I cook you complain!”

Earplugs for Your Appeal Ear

Close Your Appeal Ear © Fotolia 2012 / detailblick-foto

Close Your Appeal Ear © Fotolia 2012 / detailblick-foto

Imagine that you could completely soundproof your Appeal Ear, the Relationship and the Self-Revelation one as well. At the same time, let’s you turned your Factual-Information Ear up high, so that you could really concentrate on the statements of the client without getting unsettled by the emotional interjections of the other messages. This would lead so some surprising results:

If the client says, “I can get that cheaper elsewhere,” you say “OK, but what does that have to do with your decision on my offer?” And if the client says, “That’s not in out budget,” you counter with, “What can you do to work your budget around it?”

Declarative Sentences vs. the Conditional

Put yourself again into the position of an experienced buyer in order to understand her attitude. She has to make sure not to pay unnecessarily high prices. That’s why buyers ask if the price can be negotiated. That is when it all comes down to the reaction of the salesperson. If he answers in the conditional like, “Well, I’d have to see…”, “we could discuss adjust the services a little more instead…” or “We should really establish a basis for comparison,” the negotiation will inevitably carry on.

If, however, the salesperson answers with a declarative sentence, the message becomes clear: The negotiation stops here! Not it’s time for a decision. “You have all the facts at your disposal, please come to a decision,” “Only you can make this decision,” “I can’t budge another inch. Now it’s your turn.”

By using the conditional, you imply that there is space for further negotiation success and the buyer is virtually forced to continue negotiating. On the other hand you will lead her to a decision if you indicate that the show must come to one. No buyer will come to a final decision unless it becomes obvious that there is no other option anymore.

Comparing Unique Products?

The business world, however, likes to compare specific product or service features. You will have realized by now that decisions are not made on the basis of facts, and yet buyers continue to exploit supposed disadvantages when comparing facts.

So how do you become immune to the tricks of the buyer in a price negotiation?

1. Get yourself into the mindset in which “Everything is open to discussion—except for the price,” and thereby achieve price stability.

2. Close your ears to disruptive emotionalizations of the customer’s statements; instead, focus on the factual information.

3. Make sure to enable the buyer’s decision by making very clear that the time for negotiation is over.

Next week I will show you how to stay calm, even in tough negotiations.

Best wishes,
Stephan Heinrich