When a customer gives a target price, clarify the conditions first
When a customer asks for a lower price, it is tempting to negotiate immediately. In a development project, however, that number depends on materials, process, yield, volume and performance requirements.
I used a new-material refill scenario in the training to separate validation, initial production and later cost reduction.
Establish what the target means
Section titled “Establish what the target means”Is it a launch price or a price for mature production? At what volume? Does it include freight, special testing or other charges? Which performance requirements and specifications must remain unchanged?
Without these conditions, the same target can mean different things to each side.
Divide the discussion into three stages
Section titled “Divide the discussion into three stages”| Stage | Question to resolve | Inputs needed |
|---|---|---|
| Validation | Can the material and process work? Where do losses occur? | Trial records, quality requirements, consumption and yield |
| Initial production | Is the specification frozen? What is the actual unit cost? | Approved specification and production data |
| Later cost reduction | Which changes could reduce cost, and under what conditions? | Forecast, volume commitments and an efficiency assessment |
A forecast is not a purchase order. A discussed quantity is not a volume commitment. Record these separately.
An example customer response
Section titled “An example customer response”We can assess this target. First, we need to validate the material and process and establish actual losses and cost per accepted unit. Please also confirm expected volume and demand timing. Once validation is complete, we can discuss the launch option and the conditions for later cost reduction separately.
This is a communication example adapted from training, not a quotation.
Make the next step actionable
Section titled “Make the next step actionable”Sales captures the use case, specification, volume and commercial scope. Engineering defines the validation route. Production and quality provide process and yield data. The cost review must use the same version of those conditions.
The useful outcome is more than “we will try.” It is a route forward: what needs validation, who supplies the evidence, and which conditions must change before a lower cost is possible.
Adapted from sales team training. Project details are generalised; examples do not report actual project outcomes.