Half the budget! Is this a bluff?

I had the situation I think last Friday when one of my clients called me and she was in a position where she was working with an existing client so she’s the account manager. And she had a particular challenge because on the one hand, their relationship was very good and now she was asked to hand in an offer for a specific extension of the current solution. The reaction of the customer was very aggressive and she asked herself if this was just a bluff….

Transcript

Hello everybody, this is (Armin Rau, Founder of Armin Rau - opening doors, making you grow. Today, we’ve got another moment of truth for you.

Moments of truth normally are the topic when clients call me and ask me, “Armin, what should I do?” Now, I had the situation I think last Friday when one of my clients called me and she was in a position where she was working with an existing client so she’s the account manager. And she had a particular challenge because on the one hand, their relationship was very good and now she was asked to hand in an offer for a specific extension of the current solution.

Now, it turned out that the offer in terms of price was double of what the customer expected and that led to quite an intense reaction from the customer side. The guy was extremely angry and yeah, really made her feel this anger. Now, the first thing here now is, what she did right, she asked, “What would happen if you didn’t introduce the solution?” And so, it turned out that this would actually - this would actually cause a lot of trouble and extra work and it - they didn’t really want that.

On the other hand, she also found out, and this is what she did very well, how much the budget should be. So, she got an indication for the budget. Then she asked what - if they could actually live with a reduced specification of the solution. So, in concrete terms she was asking if less licenses would do because they offered a company license that was quite expensive and probably forgot to check if that was really needed. And it turned out that he was actually trying to buy the system only for two or three, or three and a half or three or four users I think. And that, all of a sudden, reduced the price in a significant way.

What I would like to say here is that basically, what she did, she did everything right. The only thing that she wanted from me, she wanted to ask me, “Do you think that this is a bluff?” Because at the end of the day here, his budget was approximately half of that why had offered. Now, here we’ve got a very interesting situation because the customer called her and he was very, very angry. Now, this shows to me that he really wanted to buy. He wants this solution and now he’s so angry that it did not fit his budget. That’s my interpretation of this situation. So, complaining about the price is actually a strong, strong buying sign.

So, one thing that you must not do in such a situation is to just reduce the price to the needs or to start it going to bizarre mode and you know think about various prices. No. Ask questions again, ask if the specification can be reduced, if functionality can reduce and so on, exactly what she did here and in this situation, when somebody calls you and is really angry, don’t get upset yourself, don’t be - don’t get nervous, that is a strong buying sign and it’s a moment of truth because in this moment, the one thing that you’re not going to do, you’re not just going to reduce your price without any reductions in functionality. So, that was it for today for this moment of truth. If you would like to have more tips and tricks from me, please register for a private planning session with me. It’s just 30 minutes, it’s completely free and you will have the opportunity to share maybe one of your moments of truth with me. See you soon. Armin.