This happens so often it surprises us when salespeople ask how to combat it.
If it happens to you often, you need to plan how to create value before price is discussed.
Here are some tips on how to beat the competition without lowering your pants on price.
Make Sure You’ve Qualified The Prospect First
Many salespeople think their job is to simply close every prospect, but there will be many who simply aren’t a good ‘fit’ for your business.
You may have to dis-qualify some prospects and work with those who do fit your profile for custom.
Work out if your solution actually will solve a problem for them.
Build on that problem so the prospect feels it needs to be solved, and solved quickly.
Without that force being applied, there won’t be any drive to change the current situation.
Ensure The Buyer Is The Key Decision-Maker
Have you ever worked with a prospect only to find they were just one person in a chain of decision-makers?
Find out early on in the discussion what their level of influence is within the process.
That way, you can talk their language when it comes to making the decision to proceed.
Earn The Right To Find Out Their Buying Criteria
By that, I mean you need to build the value in your products and services before you start presenting solutions.
Their buying criteria is the ‘how’ they make a decision.
Is price the most important issue they are going to use to make a decision?
Most times, it is not.
Could it be longevity, peace of mind, brand image, service back-up, reliability, delivery dates, warranties, ease of use, compatibility with other equipment, ease of contact, or a myriad of other things?
Find out the most important areas they focus on to make decisions.
If they do say price is the main issue, ask something like “is there anything else that is important to you, or will you be definitely choosing the cheapest option?”
Their answer will inform you of what you can concentrate on when you present solutions.
If you have an advantage or benefit over the competition who may be cheaper, you can bring up this part of the conversation with the buyer when you are presenting your solutions.
Ask If It’s Price Or Cost They Are Referring To
This is a question that can cause confusion because many buyers only concentrate on up-front price and see that as the ‘cost’.
You can explain that you’re proud that your price is higher than the competition because you have invested in making the product and services better in areas that are important to this prospect.
It sounds something like:
“Yes, Mr Buyer, you’re right to say our price is higher, and that helps us to make it longer-lasting/easier to use/faster in production/offer a quicker ROI/(or whatever the main criteria are for the customer to make their decision). That means that your costs over the next 2-5 years will be lower and outweigh any savings you may make upfront.”
This sequence will give you a better chance to determine the real reason why buyers are making their choice and overcome the cheaper options offered by the competition.