How to Handle a Request for Price Reduction

Originally Posted on LinkedIn 6/30/25

Salespeople, what do you do when your customer or prospect asks you to reduce the price of your bid?

Scenario:

The purchasing manager comes back to you asking you to drop your bid price by 6%. You want this deal. You need this deal. And you know you’ve ‘built in’ 9% of padded margin, so you are certain you can say ‘yes’ to the requested 6%. So, you want to scream ‘YES!’ …

Don’t. Ever.

If you drop your price absent justification for doing so, while you may gain this contract, your credibility is lost for future negotiations.

To explain: your job while negotiating is to convey to the other side of the desk that there is ‘no more money left on the table.’ If you reflexively say ‘YES’ to a price drop request you will unintentionally instill in your customer a) “well, that was too easy…I should have asked for 10%”, or even worse, b) “if he had the 6% all along, why is he trying to beat me out of the gate here? I thought we were friends”

Do not feel pressured to give your decision on that first call. It is reasonable to ask for a day or two to diligently review your numbers. Then when you call back, justify your discount:

“Hey, I spent the day on this, I ripped these bids apart, reviewed the take-offs, spoke with my labor manager, I found a few errors, and here is the best we can do” and then extend whatever discount you are comfortable with.

This leaves the purchasing manager feeling as though they’ve done their job; and you want them feel as though they’ve won! Here, you gain the contract and maintain credibility.

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