Lower Our Price or Lose the Deal
By Larry Caretsky
“Boss, we need to lower the price to win this deal.”
How many times have you heard the desperate cry of your sales staff suggesting they can only win a new business opportunity by offering a lower price? Inexperienced sales people often fall into this trap. They truly believe that they need to do this and may fight you if you suggest otherwise. Here are a few tips I have learned over the years that will not only enable them to win the business but gain valuable experience as well.
First, it’s important to respect the fact that your prospect may be an experienced and shrewd negotiator. You see, competition can be real or imaginary and an experienced buyer can make it seem very real, causing the sales representatives to panic that they are going to lose the deal if they don’t lower the price. In reality the prospect may have already decided to buy your product or service but is just testing the water to see if they can in fact get a better price. In fact, it’s rare that a prospect does not float the idea of getting a discount if they buy from you. Why not ask? The worst that can happen is that you say no. So, what can you do to win the business and retain your price points?
Well here are a few things you should not do.
Do not get belligerent and suggest that your company is the best in the industry which is why you may cost more than the competition. No one wants to hear this.
Do not bad mouth your competition. No one wants to hear this either.
There are certainly sales situations where the prospect may be torn between your product or service and that of a competitor. This happens when the prospect does not see any additional value by going with you and may ask for a discount to differentiate you from the competition. Do not allow yourself to get into this situation because the prospect may in fact select the lower cost option if they truly believe both are the same.
The winning approach is to reiterate why your product or service will do a better job of addressing the prospect’s initial business requirements. At this stage of the sales cycle the prospect is struggling to find that one differentiator or reason to select you over your competition. Take them back to your value proposition so that they make their decision based on your ability to address their needs better than your competition. To be successful you need to fully understand what you do better than your competition and support this via things like case studies, product reviews and customer references or testimonials. The prospect is looking for that comfort factor that instills confidence that they are making the right decision by selecting your product and company. If you provide this, you will win the business without lowering your price.
About the Author:
Larry Caretsky is the president of Commence Corporation a provider of CRM software and sales enablement consulting services. Visit commence.com/sales-enablement to learn more or e-mail firstname.lastname@example.org.