What's the best answer to, "Your competitor quoted me a lower price?"

I picked this quote up somewhere: Fast, cheap, or well done. Fast and well done won't be cheap. Fast and cheap won't be well done. Cheap and well done won't be fast.

We always sell the value. If they understand the value, the price will not be their reason for not buying.  If they are not happy with the price, I ask, "How much too much is it?" If my bottom low is too much after negotiation, I move on. 

I would look at what our governments, local, state, and federal do. How do the "low" bids work out for us in those arenas? I know in the insurance business, health and life, prices can be all over the place. I want them to be there when I need them. It is a challenge to stay in business and provide meaningful service and product when you are selling based on price. Do your due diligence, do the math. People lie, correct math doesn't.

It depends on the product. I paint commissioned original portraits, much different from selling groceries or other readily substituted items. I know my work is well-priced, and to lower my prices for a given client would only disenfranchise the client base I've developed over more than two decades.

I also understand my competitors and their work quality and pricing very well and stay on top of it. In my business, you generally get what you pay for and I encourage my prospects to become educated about the market I am in.

I have however, told my students to say, when asked "Are your prices firm?", that they canalsways say, "No. I could go higher." :)

Focus on what differentiates your product, or delivery. Emphasize the aspects of your service that add value for the customer. E.G. enhanced quality, follow up, warranty, ongoing support. 2 products that seem the same are rarely equal. find what makes your product the better value. Most consumers will shop price, but the satisfaction of low price fades quickly as the cost of poor quality becomes apparent.

Is this question directed to me? If it's about real estate contract management, my response is, "Do they have legal background? Have they worked 40 years with attorneys in every area of law, including real estate? Have they worked in the title industry? Have they been a closer? Are they a notary? If not, they can't compare with my background because I have all of the above. I'm not in this business to compete with everyone else who is. I'm here to give superior service to my realtors. Why should I sell my services short? Plus, I can help you manage the most difficult transactions and take the deal to closing. If it doesn't close, I don't get paid. I care about my clients, but my commitment is to making the deal work for all parties.... not just myself.

My answer would be the following if it is an existing customer.

We value your business and would like to continue serving you. We have carefully evaluated the project in the bid stage, and have provided you with a detailed list of deliverables. Has our competition done the same? We bid each project to you with you in mind. Let us know if there are any of the deliverables that you do not want as a part of the project, and we will revise our proposal.

My answer to a new client would be.

We want the opportunity to earn your future business. Have you carefully reviewed both our proposal and the competitions proposal to see if we are bidding on the same scope. We have not worked for your company before, maybe we are offering more than you normally require. Let me take a look at our proposal again, and please let me know if there is anything that we have offered that you do not need. I will call you later on today, after we have re-evaluated our proposal. At that time lets talk about any not needed scope items. We would like to earn your business.

First I verify the services they were quoted. We sell a different type of internet than most companies so you end up comparing apples to oranges. 2nd I would ask if they could send me the quote so I can review and see what we can do in comparison. lastly I would look at the competitors "hidden fees" and the details of the quoted price. The hidden fees can add up pretty quickly and the customer ends up paying quite a bit more than the actual quote and many times the discounts in the quote are temporary. They may only last approx. 6 months, what does the price increase to after the discounts fall off?

If you are a professional it never pays to adjust your offers for the service you provide with some one who is low balling. Explain to your client why your offer is what it is and what you supply that the other person can not at his price. If you have to walk away then walk away. They will come back.

You should also take the offer being made and call the lender giving him a similar request and see for yourself what they offer.

It depends on the situation, of course, but generally, I stand firm on my price and quote John Ruskin's bit about quality, which went something like this: "There is always someone who can offer a product at a lower price, but they also deliver poorer quality. Those for whom price is the chief consideration are that man's lawful prey."

There will be times when a Credit Union, Savings and Loan, or a local Bank may have pricing below the market to balance there portfolio of mortgages to auto loans, business loans, etc. These are situations that Mortgage Banks can't match, as we have costs of funds that are different tan using Savings Account Funds to lend. Also, quoting a price when you know that you don't have to deliver, i.e. the Buyer is at the beginning of the Process, and doesn't even have a property to bid on, means that certain Loan Officers will quote low prices just to steal a Client, and then not deliver that when it's time to lock, because the " market has changed " !