Why You Should Always Give A Price Point First

by Johnny Bravo · 1 comment

Why You Should Always Give A Price Point FirstFor the 10+ years I’ve been in sales there is one topic of conversation that comes up in every negotiation. The starting price point.

That’s right…it’s all about the bottom line.

It may be called a price point, subscription, membership, investment, budget, or any number of things. But no matter what, every product will come down to the monetary value associated with it. Or at least what each party’s perceived value of it is.

For some this is considered to be the win or lose of the deal. As I’ve eluded before, I don’t believe in win-lose deals. I believe part of my job as a professional sales person is to find the win-win in every deal.

So knowing that the starting price point will come up in virtually every conversation, we are presented with a unique opportunity. To completely take price out of the equation.

This is actually a lot easier than you might think. Especially since the standard school of thought is to hold off on naming a price until absolutely necessary.  Or at the very least, being the last one to name a price.

I however dare to go against this principle.

I believe price should be one of the first things you talk about…assuming you have all the essential information to make an educated assessment.

And believe it or not this principle applies to all aspects of price negotiation. Whether you are negotiating a sale price, a starting salary, or a car leas; the below reasoning holds true.

Why Would I Show My Hand First?

This goes against most sales negotiation techniques. Not all, but many.

Price is always thought to be such a sensitive subject that it is something to be avoided or at the vary least delayed.

Well I’d like to break that trend.

The standard thought is that if you are the first person to give a price point then you may be over paying or under valuing yourself.

I haven’t found this to be the case. Not as the norm at least.

Any successful and honest business person will be able to offer a price point that is both fair and reasonable.

In addition they will be able to back up their price point with the reason for their proposed price, or the value they are claiming.

Remember though, both parties will want the best price possible. Lowest for the buyer, highest for the seller. This is just basic economics.

But this doesn’t mean that there has to be price gouging or a sacrifice of quality to get what you are looking for.

So what are some of the other benefits to giving your price point first?

So You Don’t Waste Each Others Time

When I was working for a plastics manufacturer a normal day for me included a few conversations where a prospect would call in, thinking about starting a new business and wondering how much polybags costs.

For various reasons it is difficult to precisely determine, off the bat, how much an order would be. But it is possible to give a range of prices, from say $3,000 to $5,000 for a minimum order.

Mentioning a price like that, or something similar based off the type of product they are looking for can go one of two ways. Either it is an option for them or it is way more than they are looking for.

This is especially the case when they only need a few hundred (if even that) polybags.

But in the end neither of us is wasting the others time or energy. If we aren’t the right fit for them they can continue on their search for someone who is.

And if they aren’t the right fit for us we are not wasting time and energy doing quotes, sending samples, and providing free information to someone who has no intention of buying.

A win-win.

It Paints A Target 

Perhaps you’ve been working with property management software company for a long time but are going to start looking for a change. So you decide to “shop around” for another provider.

Some companies do often simply to make sure they are still getting a fair deal.

No matter the reasons, they want to be sure to provide as much information as possible so you can get the most accurate price possible.

Well if you give a price point first you may very well give your supplier a starting point which is lower than what they were going to offer first.

From a negotiation standpoint this means that the bar is lowered for your price which is good for you as a buyer. But if they had given a higher price first, then that would be the starting point for any negotiations.

But if you had suggested a price that was higher than they would have offered well you may be out a few coins but you will have a supplier who is happy to work with you and appreciates your understanding of fair pricing.

Which leads to the next reason giving a price point is a good idea

It Will Help With Negotiations

By knowing your budget for property management software your provider can provide options that will fit your needs.

For example they may say that they can’t meet your price with the quantity you order but if you order a little more they can meet it.

Or of course they may think your requested price is very reasonable and be happy to accept your proposed price point.

Always Go For The Win-Win With Your Price Point

No matter what, it is important that you work with a provider who is interested in a win-win deal.

This also means that you have to be willing to give and take so that you both come out ahead in the deal.

If you are the kind of buyer who is only interested in the lowest possible price then you will be missing out, and sacrificing to get that price. Whether it’s customer service, quality, or the relationships, something has to give.

That’s why you should use your best price point as the starting place, and work towards a mutually beneficial deal with your supplier.

~ Johnny Bravo

Images courtesy of kibsri /


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