Price Negotiation & Deal Management Flashcards
7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Price Negotiation & Deal Management flashcards as text
What is the purpose of 'price guardrails' in deal management?
Answer: To prevent sales teams from pricing below defined thresholds without escalating for approval
Price guardrails define floor, target, and ceiling price levels that structure the negotiating authority of sales teams, protecting margin while enabling controlled flexibility.
When a customer threatens to switch to a competing supplier in order to secure a lower price, this tactic is best described as:
Answer: Competitive leveraging
Competitive leveraging uses real or implied competitive alternatives to pressure a seller into price concessions, one of the most common tactics in B2B purchasing negotiations.
What is 'pocket margin' in the context of deal management?
Answer: The actual profit margin remaining after all on- and off-invoice deductions are subtracted from pocket price
Pocket margin is derived by subtracting all applicable costs and off-invoice deductions from the pocket price, revealing the true profitability of a given transaction.
Which approach should a pricing professional prioritize when facing aggressive price pressure from a customer?
Answer: Reframe the conversation around total value and ROI rather than focusing on price alone
Shifting the discussion from unit price to total value—ROI, total cost of ownership, service quality—defends price by proving that the full solution justifies the investment.
What does a 'deal scoring model' in a deal desk environment typically evaluate?
Answer: Strategic value, profitability, and risk of a proposed deal to prioritize approval decisions
A deal scoring model assigns quantitative scores based on profitability, strategic fit, volume potential, and risk, enabling consistent and objective deal approval prioritization.
In negotiation, which principle explains why making a small concession early can be an effective tactic?
Answer: Reciprocity—people feel compelled to return favors, creating pressure to concede in kind
The reciprocity principle means that when one party makes a concession, the other feels social and psychological pressure to respond with a concession of their own.
Which of the following best describes the 'price realization gap'?
Answer: The difference between the intended target price and the actual transaction price achieved
The price realization gap measures how much value is lost between the intended price and the price actually captured in transactions, serving as a key indicator of negotiation and deal management effectiveness.