We’ve all been there.
The final stages of the negotiation process.
A deal about to be signed.
And then…
The other party uses the “d” word,
Discounts.
This can send sales reps into a tailspin—what should you do, what if they walk, how much should you give?
As common as this scenario is, many salespeople are unprepared for it. They often feel there's little choice but to settle for a less-than-ideal deal. Or emotions get in the way, damaging the chance for a long-term relationship.
While every negotiation setting is unique and needs to be treated as such, there are right ways and wrong ways to deal with price pressure.
Here are five guidelines to ensure you and your sales team don't sell yourselves short.
PRICE PRESSURE OVERVIEW: WHAT IT IS (AND WHAT IT LOOKS LIKE)
Price pressure is the push buyers exert on sellers to lower their prices or improve deal terms, often at the expense of profitability.
It’s a common challenge in negotiations, particularly in industries where cost plays a significant role in decision-making.
For sales teams, price pressure typically surfaces during late-stage negotiations.
At this point, buyers may want discounts or concessions to secure a better deal, often leveraging urgency or competitive comparisons to shift the conversation away from value and onto price. This is especially prevalent in commodity-driven markets, where differentiation is limited and price becomes the primary battleground.
TOP SKILLS TO HANDLE PRICE PRESSURE WITH CONFIDENCE
Before you jump right into a price pressure negotiation, it's important to take a step back and consider the variables at play—and the skills you have at your disposal to handle them deftly.
To avoid making costly concessions, try using these three techniques throughout your sales process:
- Acknowledge and Defer: Let them know that you understand their concern and agree to postpone the price discussion to a later point in the talks.
- Deepen and Broaden: Get deeper into the “why” of their expressed needs—is this deal the linchpin of a promising promotion or a key stat line on a bonus metric? You can use this information to expand the buying criteria (the things they consider when making a decision).
- Explore and Compare: Keep exploring where their price resistance is coming from by asking the right questions. Use their answers to build fair, 1:1 comparisons.
So what does this look like at the negotiation table?
Keep scrolling to find out!
5 SMART WAYS TO DEAL WITH PRICE PRESSURE HEAD ON
With the foundation in hand, you can start putting this theory into practice.
Here are five approaches to consider.
1. PRIORITIZE VALUE POSITIONING
When you position your case around price, you're not only focusing on the wrong thing—you're actually encouraging the other party to do the same.
Instead, position your case around value from the beginning of the negotiation, by creating a strong, value-based theme you repeat often.
Here’s an example:
Imagine Jerry, a sales negotiator for a high-end computer graphics card manufacturer. Jerry’s product is priced higher than competitors, and during negotiations, his client questions the premium cost.
Instead of diving into price comparisons, Jerry shifts the conversation to value by positioning his graphics card as the “technology of the future.” He highlights how its advanced architecture reduces rendering times by 30%, enabling the client’s design team to complete projects faster and with greater precision.
Jerry reinforces this theme throughout the negotiation, using data points like case studies from similar clients who reported increased project efficiency and faster time-to-market. By focusing on outcomes—speed, reliability, and innovation—rather than price, Jerry changes the narrative. His client begins to see the graphics card not as a costly purchase but as a strategic investment that solves critical business challenges.
Showing this kind of conviction often lowers the buyer's expectations regarding price concessions and reinforces the value of your offer.
2. DON’T COMPARE PRICE AGAINST COMPETITORS
When exerting price pressure, customers often play the competitor card.
Imagine a buyer says, “Why are your prices so much higher than Company X, Y, and Z?”
This is a classic tactic to shift the negotiation into a purely cost-driven discussion. A less experienced salesperson might ask for competitor pricing or start justifying their numbers—falling straight into the trap of price comparison.
But a skilled negotiator knows better.
Instead of engaging in this price-focused dialogue, the salesperson redirects the conversation to value. For instance, they might say, “I understand you’re looking at cost, but let’s talk about what you’re really trying to achieve here. Our solution reduces downtime by 40%, saving your team hundreds of hours annually. Does Company X offer that kind of efficiency?”
By emphasizing unique benefits—like time savings, reliability, or post-sale support—the salesperson reframes the negotiation around outcomes rather than price.
They might even highlight where competitors cut corners to offer lower prices, such as inferior materials or limited customer service. For example: “Competitor Y may be cheaper upfront, but their product requires frequent maintenance, which could cost you more in the long run.”
This approach not only steers the buyer’s focus back to value but also positions the salesperson as a strategic partner who understands their needs—not just a vendor trying to close a deal. It’s about showing why your offering is worth the investment, making price pressure far less effective as a negotiation tool.
3. BUILD FLEXIBLE PROPOSALS
We can’t say this enough: great negotiators are strategic planners.
That often means anticipating the strategies, objections, and approaches of the other party and preparing accordingly.
To do this, you need to walk into the negotiation room with some flexibility, especially in your proposals.
There are a couple of ways you can do this:
- Start with a higher price to accommodate a price concession.
- Scope more features into your initial proposal than you would otherwise, giving you items to remove that can justify cutting the price.
Remember: when a customer expects to get less by paying less, they'll be less inclined to exert price pressure.
4. CONCEDE WITH CAUTION
If you follow the previous guideline, you'll have breathing room to make a few concessions.
When it comes to making concessions, the how and when are often more critical than the what. Conceding too quickly or too much can weaken your position and embolden the other party to demand even more.
Instead, concessions should be made slowly, reluctantly, and with purpose—each one carefully calculated to maximize its perceived value. This approach not only protects profitability but also ensures the other party respects your position.
Let’s say you’re negotiating a contract for a software solution. The buyer pushes for a 20% discount right out of the gate. Rather than immediately conceding to keep the deal moving, you hold firm initially, testing their resolve.
You might respond with something like, “I understand cost is important to you, but let’s first ensure we’re aligned on how this solution addresses your needs.”
As the negotiation progresses, you begin making small, deliberate concessions—perhaps offering a 5% discount after confirming their commitment to a three-year contract. Later, you might concede an additional 3% in exchange for expedited payment terms. Each concession is smaller than the last, signaling that your flexibility is limited and reinforcing the value of your offer.
By doing so, you convey seriousness and control while maintaining leverage. The buyer feels they’ve gained something valuable without eroding your margins.
5. SECURE A STRONG COMMITMENT
If you’re going to “give up” something big—price—you should get something big in return.
So when you have little option but to make a price concession, only do so in exchange for a strong commitment on their part.
For instance, you could get them to commit to the deal in a shorter period of time, or suggest they commit to a longer-term contract. Just make sure the commitment you receive satisfies a genuine need.
Imagine you’re negotiating with a client who insists on a 10% discount to close the deal. Instead of simply agreeing, you use the opportunity to secure a longer-term contract.
You might say, “We can explore that discount if you’re willing to commit to a three-year agreement instead of one year. That way, we can provide the pricing stability and support you need over the long term.”
This approach reframes the concession as an investment in the relationship rather than a simple price cut. By tying the discount to a multi-year contract, you protect future revenue streams and reduce the risk of customer churn.
TURN PRICE PRESSURE INTO OPPORTUNITY
For many sales pros, cost pressure is an inevitable part of the negotiation process, but it doesn’t have to mean sacrificing profitability or value.
With RED BEAR’s proven negotiation strategies, your team can confidently navigate even the toughest demands, turning challenges into opportunities for growth.
Our tailored approach equips sales and procurement professionals with the tools to protect margins, secure commitments, and build stronger partnerships.
Contact us today to learn more about how we can help you maximize the profitability of your agreements.
