Managing Demands for Price Cuts and Extended Payment Terms
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Managing Demands for Price Cuts and Extended Payment Terms
Business-Critical Intervention
What does it cover?
This Business-Critical Intervention is designed to help salespeople manage customer requests for concessions while maintaining long-term trust. Many organisations are facing customer demands for price cuts and extended payment terms. Yet even a 1% price concession across the board can lead to a 10% fall in net profit and cashflow. Equally, increasing days receivable from say 40 to 45 days can have a significant impact on your balance sheet. This intervention draws on three modules from our award-winning 3D Negotiating Client Value programme:
Identify and Improve
your BATNA
Impact: Margin; Contract Size
Identify and improve your Best Alternative to a Negotiated Agreement (BATNA) in both perception and reality. Defend your BATNA against procurement tactics. Understand the customer’s BATNA (using the Kraljic Matrix) and influence their perception while retaining trust.
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Trading Gives
and Gets
Impact: Margin & Cash Profile
Create value by proactively suggesting Give/Get trades. Respond to customer demands using a robust and scientific approach to minimize value leakage, uncover more information, and signal a strong BATNA. Maintain trust while trading.
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Defending Value
Impact: Margin & Cash Profile
Defend against a wide range of tricks used by aggressive or well-trained negotiators, maintaining composure and focusing on what is known, rather than on the fear of the unknown. Reinforce value insights, manage stakeholders and protect trust.
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