Ahhh…the American free market. It may be the greatest invention of any society to date.

But it has its cons too…

What if your competitors start dropping their prices to snatch up your customers?

That’s a good thing for the market. But a MAJOR obstacle for you!

In her post on a similar topic, sales thought leader Colleen Francis says you don’t have anything to worry about.

Because price is really just another objection.

Here’s what you can do if you know your competitors are dropping prices, and your customers want to focus on having you give them a deal:

1. Give a Small Concession – Free of Charge 

The moment you cut your prices for anyone – that’s the second you lose a huge psychological battle. In the prospect’s head, they think,”Wow. I got that service for a discount. I wonder if it was really worth that much in the first place?”

Now they’re skeptical on value. In their actions, they’ll be more likely to complain about your service, negotiate further deals, and be otherwise difficult to work with.

Instead of cutting your price and risking that situation, offer them a small concession free. They’ll feel like they’re getting something, and you won’t get caught in a lose-lose situation.

2. Ask For a Written Offer from the Other Competitors They’re Considering

Many prospects bluff. Some will insist they have a better offer somewhere else.

Get it in writing just to make sure.

This also does a couple other things for you:

1) You’re doing market research so you know what your competitors are up to

2) You know exactly what your prospects are getting, so you can point out the value you offer that your competitors don’t

In the case of #2 there, you now have firmer ground to stand on during negotiations. So now it’s easy to add value to your offer, or just let the prospect walk.

3. Prospects Part with Their Money When They See You Offer More Value Than the Security They Get from their Money

Remember all that prospect research and qualification you did earlier (you did do it, didn’t you?)? All that information now comes in super-handy.

You should have an accurate understanding of your prospect’s problem. So you should be able to fit your product or service squarely into that.

If that doesn’t sell, you’ve just run into another tire-kicking price-shopper.

4. “We’re happy to cut X, Y, or Z from your package to meet your pricing needs.”

Of course, this one only works if the prospect’s expectations for your solution are realistic. You can’t cut several options from the deal if it’s likely not going to achieve the outcome they want.

You’ll pay for it long-term:

• You won’t earn a referral

• You lose out on on-going commissions

• You’ll spend more time finding and closing new prospects

But if you think the customer is reasonable in their expectations of your product or service, try to negotiate a reduced service scope that meets their budget.

And then if they like what you do, you may be able to upsell them on additional options and features later on.

5. Finally, Be Willing to Let ‘Em Go

Not every deal is closable. And some customers are unrealistic. Let this prospect go because more good ones will come in later on down the line.

At the end of the day, your industry isn’t “too competitive.” There’s always a way to make a deal happen, provided that everyone at the table is reasonable.

And if you find competition’s stiff, it’s time to open up discussion with key leaders in your company about improving your product or service.

 

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