How Do I Deal With The Lower Price Competitor?

The top Professional Salespeople believe in offering their clients extraordinary service.  This goes beyond what’s expected of them.  These Sales Superstars feel that a significant part of buying their product is the service level that you receive from them.   What happens when another supplier offers a similar product for less money?

This is a typical scenario experienced by Professional Salespeople.  It was the topic of conversation during a Group Sales Training Session I recently conducted in Toronto.  Here is what usually happens.

Two Pricing Models

In every industry, there will be two suppliers on the direct opposite ends of this spectrum.  There may be more somewhere in the middle.  Both will claim to have a competitive advantage based on value.  The interpretation of that value will be the difference.

The Higher Price Model

This supplier believes in offering a high quality product that usually exceeds the competition.   They also employ great Salespeople who believe in consistently offering exceptional levels of client service.

This company has the confidence to charge accordingly and will knowingly tell clients that they don’t offer the lowest price.  They offer value based on you get what you pay for.  They tend to have close relationships with their buyers with service and expertise being a major part of the client experience.

The Lower Price Model

This supplier decides to go the other way.  They may still have a decent product with fair levels of service, yet not to the same degree as the first.  Their competitive advantage will be price point.  They also claim to offer value in having the lowest price, knowing the sensitivity of cost to all buyers.

Here’s Where The Challenge Occurs

As a Professional Salesperson representing the company with the Higher Price Model, you work diligently to ensure your clients are happy.  You treat them with respect and over-deliver to a high degree.  You not only do everything your clients expect, you go the extra mile ensuring that they never question their business with you.  Until one day you receive the call.

I’m starting to question your prices says your client.  It appears a Salesperson for the Lower Price Model supplier has caused your client to take a second look at them based on price solely.  No reason to get upset at a Salesperson doing her job or a client doing his.

What do you do?

Have a meeting with your client.  Ask them what’s recently occurred to cause them to question price.  No, do not start mud-slinging.  Show the class you are known for and take the high road.

Ask them if they are happy with your product.  How about your service?  They will tell you that they love doing business with you on both counts.  It’s price that’s the issue.  Fight the urge to reduce price.  That’s a slippery slope that will require you to reduce price every time when the issue comes up in the future.  Don’t train your clients to expect this.

Consider that your client may actually want to keep doing business with you.  They may be trying to leverage an offer from another supplier to their advantage.  That’s their job.  It’s your job to attempt to stick to your price.

Here’s What I Say

I understand. You’re just doing your job.  We all want to get the best product and service for the lowest price.   I can’t control what my competition does.  Our business, your business and even our competitor’s business sets its prices on supply and demand.  I’m sure they have a decent product and fair service.  I don’t know why they sell it for less.  Let me ask you this question.  If they could charge more for their product based on supply and demand, do you think they would?  Our customers deal with us because they get a great product and my personal service for a price based on true value.  Does that seem reasonable?

Now shut up and wait for their response.  The first one who talks loses.

Offer Something

If possible, offer something of value to your client in the way of value as a gesture of appreciation for their business.  Try to avoid a price reduction.  No, don’t give them a free pen either.

How Can You Prevent This From Happening In The Future?

Let me ask you this.  When is the best time to fight the price objection?  Before it becomes one.  It’s your job as a Professional Salesperson to build up the value of what you have to offer in product and service.  Then, it’s your responsibility to take away the price objection by having a frank discussion on it.  That will prepare the client to better accept that you are representing the supplier with the Higher Price Model.  It also takes away the objection later when the Lower Price Model Salesperson comes calling.

One More Point

When you are giving your client the extraordinary service that you are known for, find a tactful way to remind them of the commitment you make to the relationship you have with them.

I’m really happy to give you the level of service you deserve.  All of my best clients get my best service.  It’s really important to me that you’re pleased with my service. 

Say what you will.  Internalize it and make it yours.

Consider giving your clients a quarterly summary of the value add services you have been happy to provide to them at no additional cost.

Is This Beating Your Own Chest?

Yes, it sure is.  Do not miss this step and allow your clients to take your service levels for granted.  They probably won’t get your special treatment from the low cost provider.

Suggestions like this are part of the commitment we make to our training programs.  If you’re looking for personalized sales and customer service training, please email me at dave@prosalesguy.ca.

Thanks!

Dave Warawa PROSALESGUY

PROSALESGUY TRAINING offers Group and Individual Sales Training, Sales Management Mentoring and Consultation,  and Business Consulting Services in Victoria, Vancouver, Edmonton, Calgary and Toronto.  Training can be done on site or via web conferencing.