Negotiating is about value, not money.

When you negotiate solely on price, you have already lost. Price negotiations only end in two undesirable ways: you lose your margin, or the customer does not buy.

Being empathetic and viewing things from the customer's perspective is crucial. What do they truly desire? While it's true that everyone wants to pay less, we must remember that we, as consumers, often choose to invest in products or services that we perceive as valuable, even if they come with a higher price tag. Look in any parking lot, and what do you see? Expensive cars were purchased when there were many less expensive alternatives. People buy what they perceive as value and will pay more to get it. This understanding should guide our negotiation strategies.

Successful negotiators are not just creative. They are also deeply curious. They ask questions that delve into the value their service, solution, or product offers. This curiosity fuels their negotiation strategies and keeps customers engaged throughout the process.

What value do you genuinely offer your customers? There are four types of value: functional, Financial, Social, and Psychological.

Functional value is what a solution does. It's the core reason a customer must have or use this solution. Functional value is often necessary for survival, and in terms of straight worth, these forms of value could be considered priceless and pre-empt other forms of value. Some examples of functional value include:

• Equipment, property, and operations essential to provide core business
• Replacing damaged facilities or equipment
• Salaries of key personnel
• Meeting regulations
• Compliance with laws

Financial value is where the price paid is relative to perceived worth. This value creates an opportunity cost between other values and monetary costs. We typically think of and use this type of value to justify costs. Typically, we think of financial value as anything that does the following:

• Saves money
• Saves time
• Makes money
• Reduce costs

Social value is how a product or service connects the consumer with others or improves the corporate image. Social value examples include:

• Anything that creates goodwill
• Rewards customers
• Establishes affiliations
• Improves public relations
• Informs or creates loyalty

The most influential value is psychological value. It reduces fear, uncertainty, and doubt in customers' minds and allows prospective customers to relax and feel better. Some examples are:

• Anything that reduces anxiety, warranties, support packages
• A general sense of superior quality
• Increase in overall comfort level
• Credentials
• Increasing safety or promoting wellness
• Design aesthetics

When negotiating with prospects and customers, keep these in mind to explore opportunities where value may exist that you can tap into to understand and fully deliver what your customers want.