How to See Through Low-Ball Tactics by Your Negotiating Adversary

You are in a negotiation with a potential customer. ?You have made your offer, confident that it reflects the value and quality of your solution. ?But then the customer surprises you with a counteroffer that is half what you requested. ?They claim that your competitors are charging this and that they can easily switch to them if you disagree. ?How would you respond?

Here are some excerpts of a low-ball offer that I received recently:

Customer: "I like your approach, but I have to be honest with you - your proposed quote is over 50% higher than other sales coaches from whom we invited proposal. ?I would like to work with you on a longer time basis if you can bring your fees down. ?As a listed company we have to go with best price and value supplier."

Me: "Thank you for your reply. ?What is it about our approach that you like? ?As you mentioned, you are looking at the best price and value. ?It really depends on how you define as value and what value you'd like to get. ?Let me know. ?Thanks!"

Customer: "I like the approach of skill assessment before training. ?I assume you'll also do a post-training assessment to evaluate scores after training to showcase their learning. ?Value for me would be the ability of participants to get hands-on knowledge and skills to sell in a B2B sales environment effectively. ?Covering pre-sales meeting preparation, qualifying leads, sales process management, and follow through till getting an order for qualified leads. ?The usual stuff that's covered in sales training."

Me: "Thank you for your candid response. ?Yes, I usually do a post-training assessment and post-training coaching. ?It's great that the things you value seem to align to how the Sales Map assessment was designed and how our programmes are structured. ?If these are important to you, and if you deem us more suitable to empower your team to sell to enterprise customers, perhaps you can do something about the budget. ?After all, if your team could close a couple of enterprise deals, you would have returned your investment easily."

Customer: "Yeah c.j., but I'd still like you to reconsider your fees as another supplier proposal also promises similar value at 2/3rd your fees."

If you have experienced this low-ball tactic, you have been manipulated by a cunning and ruthless negotiator. ?They are trying to exploit your insecurities and emotions, make you doubt yourself and your solution, make you feel guilty and greedy, and make you lose control and power. ?They are playing a game with you, and they might be winning. ?The worst-case scenario is not you feel compelled to give a steep discount. ?Your worst-case is you gave a steep discount and still lost the deal!

Seeing through the Low-Ball Offer

A low-ball offer is significantly below the seller's asking price or a deliberately lower quote than the price the seller intends to charge. ?To low-ball also means to give a false estimate for something deliberately.

How do you know if someone is trying to take advantage of you with a low-ball offer? ?How do you deal with it? ?How do you turn it into an opportunity?

When negotiating with someone who offers you much less than what you are asking for or what your product or service is worth, these are important questions. ?A low-ball offer is a common tactic that some people use to manipulate you, to make you doubt your value, and to make you settle for less.

But why do they do it? ?What are they really after? ?What are they really saying?

One way to find out is to compare their offer with the market value of what you are selling. ?A low-ball offer is usually more than 25% less than what you are asking for or worth. ?In the above case, the customer asked for a 50% discount and then reduced the discount request to 33%. ?While 33% was still a steep discount, it was a significant reduction. ?However, if the customer had budget constraints, they would have explained that their budget was limited rather than drastically increasing their asking price. ?Their emphasis would have been how their budgets were limited and not using "other providers" to try to pressure the seller.

Another way to find out is to understand their motives, interests, concerns, constraints, alternatives, and emotions. ?They may test you to see how confident you are, how prepared you are, and how flexible you are. ?They may have problems like budget limitations, competitive pressures, or personal issues. ?They may be trying to manipulate your emotions and expectations. ?They may be trying to pressure you into accepting a deal that is unfavorable to you.

How to Respond to Low-Ball Offers?

When someone gives you a low-ball offer, don't let it affect your emotions or actions. ?Here are 5 steps to deal with the situation:

1. Don't react, respond. ?When the customer throws a low-ball offer at you, don't let it affect your emotions or ?actions. ?Don't get angry or defensive. ?Don't get desperate or discouraged. ?Don't accept or reject it right away. ?Instead, take a deep breath and pause. ?Then respond with a question that shows your curiosity and confidence, such as: "That's interesting. ?How did you come up with that number?" or "That's quite a difference from our offer. ?What are you basing that on?" or "That's a very low offer. ?What are you trying to accomplish with that?" ?By asking a question, you shift the focus from the price to the customer. ?You also show that you are not intimidated or influenced by their tactic.
2. Don't assume, discover. ?When the customer gives you a low-ball offer, please don't assume they are telling the truth or have the power. ?Refrain from assuming they have other options or don't value your solution. ?Refrain from assuming they are ready to buy or not interested in buying. ?Instead, discover the facts and the feelings behind their offer. ?Ask open-ended questions that probe their motives, their interests, their concerns, their constraints, their alternatives, their expectations, and their emotions, such as: "What is your goal for our discussion?" or "What are the criteria that you use to evaluate our solution?" or "What are the challenges that you face with your current situation?" or "What are the consequences if you don't solve this problem?" etc. ?By asking open-ended questions, you gather more information and insight about the customer and their situation.?
3. Don't argue, educate. ?When the customer gives you a low-ball offer, please don't argue with them or try to convince them that you are wrong or right. ?Don't tell them why they should pay more or why you deserve more. ?Please don't compare yourself with your competitors or criticize their offers. ?Instead, educate them about the value and the difference of your solution. ?Tell them stories and examples demonstrating how your solution can help them achieve their goals, solve their problems, overcome their challenges, avoid their risks, and satisfy their needs better than any other option. ?Use facts and figures to support your claims and show them your solution's return on investment (ROI). ?Use testimonials and referrals to show them the proof and credibility of your solution. ?Educating them about your value and difference increases their perception and appreciation of your solution. ?Be bold and confident to hold your ground.
4. Don't compromise, collaborate. ?When the customer gives you a low-ball offer, don't compromise your position or price just to make a deal. ?Don't split the difference or meet them in the middle to end the negotiation. ?Don't give away something for nothing or expect something for nothing. ?Instead, collaborate with the customer to find a win-win solution that meets both parties' needs and interests. ?Appeal to their self-interest and emphasize how much more they will gain if they collaborate with you.
5. Don't appease, walk away. ?According to negotiations guru Jim Camp, "The most powerful negotiation tool is the ability to walk away from the table without a deal." In negotiations, it is critical to know what you want to achieve from the negotiations rather than to get an agreement at all costs. ?If the other party does not seem sincere to work with you, you should walk away. ?Many salespeople are afraid of walking away from a "potential customer." ?However, if the fear of walking away is losing business, then realistically, would the salesperson be able to win the deal within acceptable conditions had he not walked away? ?The key to good negotiations is to identify suitable opportunities and not be distracted by negotiations ending nowhere.

So, how did I eventually respond to the above customer? ?I said, "Our fees align with the market rates in Shanghai, especially for customers who are more discerning about the workshop's effectiveness. ?Hence, if you say that you are looking at providers that are 2/3 of our quote, I'm worried for you. ?Some companies want employee training without much expectation, but that is not your case. ?At our fee level, let me know what else we can do?to make it palatable for you. ?Looking forward!"

And I have yet to hear from the customer after that. ?Perhaps he realized then that I would not budge on price, and he just went to a much cheaper offer. ?

In our business, we provide workshop outlines, pre-workshop interview questionnaires, and other related collaterals. ?We sometimes share digital copies of our workshop materials (PPTs, worksheets, and others) with our customers and participants. ?This information can easily leak into the open. ?In another case, a prospective customer passed our workshop outline and pre-workshop questionnaires and then asked another training provider to quote. ?The training provider then quoted a really low price that was at least 33% below ours.

This customer then told us that they had appointed this?training provider. ?My partner and I do not know if the customer was implying to get us to make a counteroffer or simply stating the fact. ?In any case, I'm worried for the intended workshops' customers and participants. ?It takes a lot of skilled work and insights to create a practical programme that could resolve the work challenges. ?Anyone who could create a solid programme by borrowing our programme outlines and questionnaires does not need to cheapen themselves with a drastic discount. ?They would have no issues selling their services at higher prices. ?Therefore, the training provider that got the contract at such deep discounts will likely fall below expectations.

In any case, when faced with low-ball tactics or offers, the salesperson would have to be prepared to walk away. ?Sometimes, salespeople can persuade the customer to change their minds. ?In most cases though, low-ball tactics are merely wasting the salesperson’s time and resources. ?Making an earlier exit might be a smarter strategy.

c.j. is a bilingual sales facilitator and coach in English and Mandarin and has rolled out coaching projects throughout the Asia Pacific region. ?He is the IAC Singapore Chapter Leader and an ICF Professional Certified Coach. ?c.j. is accredited in various assessment tools such as the Cultural Navigator, TTI DISC, OD-Tools Trait Map and Motivation Questionnaire, Belbin Team Roles, etc.. ??He is the co-creator of Sales-MapTM?sales proficiency assessment and author of the book "Winning the B2B Sale in China"

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?c.j.是一名精通英语和普通话的双语销售导师和共享领导团队教练，并在整个亚太地区进行过各个方面的销售团队教练项目。?他是IAC新加坡分会的负责人，也是ICF专业认证教练。c.j.获得了各种评估工具的认证，如文化导航仪、TTI DISC、OD-Tools特质图与激励问卷、贝尔宾团队角色等。??他是Sales-MapTM 销售能力评估的共同创造者，也是《中国式B2B销售宝典》一书的作者。

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