You’ve been there many times. You’ve convinced the customer that the product is right for them and the quality is just what they want.
Then the bombshell hits – they start talking about price.
Price is always a mirror of the value the prospect places on the solution, so if they don’t see the value, the price will always seem too high.
However, there are times when the buyer brings up the competitor’s price and asks you to match it.
This means you have to have clarity of thought to help you to redirect the conversation away from price and back onto value.
For example, if the buyer says something like: “Your competition are quoting 15% lower than your price. Can you match that?” you have to be careful you don’t get dragged into a discount war or a Dutch Auction that will just result in cheapening the perception of the product or services.
A good response may be something like:
“I appreciate you being open with me on this, though I am curious about one thing. Why are still looking and checking out our product if you can get the same value with our competitors? We’d really like your business. However, if they can give you the same value for the price you say, I really can’t blame you for choosing that option”
This is a good response for two reasons.
Firstly, it determines if the buyer is simply a price shopper, or if there might be something else on the buyer’s mind.
Secondly, it calls their bluff slightly, as you are advising them to go with the competition if price is more important than anything else.
This could help you in two ways. The buyer may be more open about what they are looking for and highlight items that are more important than just pure price. Also, they may feel they are wrong to discount your proposal simply because your price is higher. It gives them more to think about and creates some dissonance in their thought processes, as they contemplate the meaning behind the meaning of your response.
The fact that your competitor may be 15% cheaper may be a bluff or absolutely true.
At this point, it doesn’t really matter because you are trying to ensure whether the buyer is really interested in price or value. If it’s value, you should be so up-to-speed with the competition’s pricing structure that, even if they are cheaper than your offering, you have support items or guarantees or warranties or something else that is of more value to the buyer than a cheaper price.
Their answer to your question above may be that they want the product but are hoping that you are cheaper or will drop your price to match the competition.
The problem is that if you do match the competitor, they may go back to the competitor and try to negotiate down with them. It turns into a farce until one of you decides to bring some sanity to proceedings and refuses to drop any further.
Allowing the buyer to make the final choice with the questions mentioned above will help you see what’s most important. to them. The last thing you want to do is make the customer think you’re a soft touch – that will spoil the relationship for the foreseeable future.