“In time of peace prepare for war.” –Publius Favius Vegetius Renatus
We’ve all been there. You’re working through the final stages of negotiating with a prospect. Things seem to be going well. They like you. You like them. They need what you’re selling. You’re already emotionally spending the commission.
Then bam! Mr. Prospect drops the bomb on you.
“We’ve been negotiating with a competitor of yours too. They offered us a really great price. Much lower than yours. We like you but have to go with them unless you can beat this price. What can you do?”
You freeze. Time stands still as you wish this guy would spill hot coffee on his new shirt and tie. How could he do this? Things were going so well. There’s no way you can beat that price.
Then you snap out of it! You’re a professional salesperson, remember?! You aren’t some rookie order taker. They call this an objection. And this, my friend, is where the work comes in.
Time to sell.
Here’s how you win the price war.
Step 1: Run Like Hell
Not literally of course. What I mean is, do not, under any circumstances get into a price war. If you ever say, “Let me go back over some numbers and see if we can knock something off”, you have just started a race to the bottom. This is not a used car lot, and you are not going to pretend to go hash it out with your manager.
If you win them on price, you will lose them on price.
“Mr. Prospect, I’m not going to get into a price war with my competitor because it’s a losing proposition for everyone. If this is strictly about price for you- if our products truly are equal in every other way- I want you to go with my competitor. And if that’s the case I will help you. I want to be on your team and I’ll go over their proposal and help you negotiate to get an even better price! But if this decision is about which product gives you the most value, then let’s talk about this…”
Step 2: Forget Price
You need to set price aside for the moment. Ask Mr. Prospect if your product is more valuable when put right beside the competition. There are always aspects of the product that you can win on. Kindly beat Mr. Prospect over the head with those.
“Let’s set price aside for the moment and talk purely about the product. I want to make absolutely sure that our two proposals are offering the same thing. Let’s clarify that my competitor is offering the exact same product/features/service/warranty as I am. Remember that we include unlimited tech support for twelve months, which is twice what my competitor typically offers. Also, I’ve seen those guys charge extra for installation when ours is included. I’d be happy to sit down right now and review the proposals side by side.”
If you uncover some features that Mr. Prospect forgot about and locate some fee hidden in the fine print of your competitor’s proposal then this gets much easier.
I know what you’re thinking here.
What if the two products truly are exactly the same?
Then keep going.
“Mr. Prospect, if you think our two offers are exactly the same I want you to consider something else. Both of our companies have revenue and expenses. When we make a profit, it goes to three places.
2)Owner and staff salaries (this is how we all support our families)
3)Investment back into the business for infrastructure, technology, customer service, etc
So if their price is less than mine then they will have less money going into one of those categories. Which one do you think will take the hit?
*Let him answer. Wait for it before you continue.
Our company was built from the ground up on value and relationships. Just like you aren’t the cheapest provider in your industry, we won’t be either. We raised ____ million dollars in capital and have a 98% satisfaction guarantee because we run a good business and take care of clients.
So if you’re satisfied that we will add more value over the relationship let’s go ahead and close this deal right now.”
When you refuse to argue over price, you make a statement. By selling value, you will differentiate yourself from the competition and find yourself winning a lot of these types of deals.
Of course sometimes you will lose the deal. They will go with your competition to save a few bucks. That’s okay too.
Sometimes when you lose a battle you find a new way to win the war.
**This scenario and most of the SCRIPT portions are taken from a great video by Steli at Close.io. Check it out https://youtu.be/uCp1Li_qFCM