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

"Ok." This is said a lot but it's not really believable in many times. In 25 yrs I have found that before giving an estimate it's a good idea to ask the right questions and qualify a client 1st. This way through interviewing them you decide if you want them as a client 1st. If price is the deal breaker and you require more than your competition to operate it's not a good idea to lose money just to have a client.

I recommend saying, "that's great!" and move along with my proposal, giving the customer response no value or credit. Before giving a price, I suggest building the value into the proposal first. Otherwise all the customer hears is the price without knowing what it represents.

If all they are willing to pay is peanuts, all they will get are monkeys.

Try this:

You are looking for qualified sales leads and qualified customers. You are the one who qualifies them. You do not get qualified BY them, you do the qualifying OF them.

You do this by learning how to ask questions. One such question is: "are you solely price focused?" If they say "Yes" then they are not a qualified sales lead/customer for you. Learning how to ask questions is an art form and one I keep relearning all the time.

You can also ask about "what is important to them about this project?" "How will they judge success or not for the project?" "Why do they want to perform this project?" and on and on.

Note, you are asking them all the time. You learn not to get diverted from this focus. Don't get into telling about you and answering their questions about you. I have learned to refocus such "who and I?" questions with questions:

"Who are your most important customers? Does most of your business come from a few types of customers? Would you like to expand that field of types to include more types and what would those new types look like? Do you have a plan to increase that field of types? Do you need any help in doing this?"

"Do you need help in identifying new types of customers for you? Can you handle any big increase in sales? Would that create problems and what would those problems be? "

(Note that I just asked about handling big increases in sales. Implying that that is our focus and they will go with that.)

I can go on.

Note I have focused on them and their concerns and what they need to increase sales and profits. I spend zero time talking about me at all...!!!

Then along the line you ask: "I know we can be of significant help to you. Would you like to pursue this?"

Now if they balk at answering these questions - and it does take some training to learn how to do this without pressure, without judgment, and to be genuine... then, if they balk... they are not a qualified customer for you and best to drop it. How and why you ask about if price is a focus for them is hard to say. But, if you ask them for their budget for this and they refuse to answer that... then they are not qualified customer because they lack trust.

And I would say just that. "To work with you we both need to trust each other. You gain nothing from not telling me your budget and you deny me the ability to tailor our services to you properly... just like telling a real estate agent you won't tell him your budget for buying a home... he cannot even get started without knowing that... you want an $88,000,000 estate in the Hamptons or an $800.00 rusty mobile home in Arizona?"

Learning to ask is an art form. You can often close a deal right then and there with a significant check to get started. Phooey on the competition.

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Great answer, Mark. This is how we handle it. I would add explicitly what you implied here:

"If, after your excellent presentation, which shows the value of your services, someone asks for a discount, you must have a couple scripts ready, like:"

This presupposes the fact that this is a SALES CALL. I have found that many business owners don't consider themselves salespeople and that's too bad. I think everyone from parents, to waiters, to surgeons, to plumbers (me) are sales people. Of course, I am also a salesman in our real estate firm.

Any sales training must deal with price objections and the response will always be showing why the value of your service is higher than your competitor. Get trained. It can be fun.

Mark puts forth very workable scripts (yes, you need some rehearsed stuff) but it takes practice and confidence to get them to feel (and sound) natural. Sales classes, public speaking training, an acting class, a mirror, a spouse. I review sales calls with my wife all the time. I've gotten "that's good" as well as "you actually said that?"

If you don't get the job, ask why. Ask the price. You have nothing to lose if you already lost the job.

A note: If you consistently lose jobs to lower prices, there may be something else to look at. I once became accustomed to pricing jobs for VA medical centers in the NY metro area. The prevailing wages were crazy. I became down right lousy at pricing private retail work, pricing myself out regardless of value. Aside from that, we ought to sell value not price.

I just say please make sure they have the same type of insurance as we do to protect you as a buyer. Often times my completion does not. I offer to provide proof of coverage. I tell them that if they do then that is a good number. I also bring 43 years of experience to the table if they are in a situation that they need a variance or something out of the ordinary my experience may bring them my way.

I have to agree with Mark. When you give them your best price quote, then if you go at a lower price it lowers their confidence in your truthfulness. And they will develop the habit of always trying to negotiate your pricing in the future. It is never a good practice. However, if it is a first time bid and it's a large one that can get your foot in the door and has services on it where they will have to work one on one with you to learn to trust and rely on you and also to learn your customer service skills, then you may want to consider doing it. Because then they will return to you with confidence because of the relationship you built during that contract. And if you already have a relationship with the customer and this is honestly a true I'm giving you the opportunity since I do almost all if not all my business with you, well then you have to make that call at that time. But always remember it's always about having the opportunity to build that relationship. That's the most important thing. Don't let price be the builder, let you and your skills be the builder of that relationship and you'll have a customer for life.

Have a blessed day, Deb

I ask to see the other quote, explaining that I would like to compare apples to apples and determine if we our quoting the same quality, their our a lot of variables that come into play in the printing industry. Coast 2 Coast Printing & Marketing, we do have competitive pricing because I work from a home office and do not have the overhead, but we still give great personalized customer service, competitive pricing and the best quality in the industry.

I find that people are not really concerned with the price, it's the actual VALUE they are getting. A low price is only attractive if it's providing the same care and attention, and we all know often it doesn't. More than once a direct competitor has entered a bid that is border line ridiculous. I've used the comment "At that price you could actually be selling to me. If the lowest price is all that matters then I can't compete with that, because I don't want to know what service level I need to provide to reach that point."

I have declined to compete against a low ball bid many times, but left my offer standing. While I may not win that initial invitation, there is a pattern of winning in the long run. These are instances where quotes are provided in a competitive manner in writing. Low ball quotes leave very little room for mistakes, errors and warranty processing, and will often accidentally bleed themselves out, OR the customer becomes dissatisfied with the cycle.

For customers that walk in with what appears to be a random number, I refrain from exposing the "lie". Sometimes people are desperate to stay with in a budget, sometimes they are uneducated on costs, and sometimes they are simply trying to be overly aggressive because of previous sales tactics against them. I have had great success in identifying how they got that number, and the motivations behind needing to hit that number. Often, not always, I can secure service, but at the very least I provide proper education and maybe empower my customers a little.

As for competitors actually low balling and damaging a market. Competition is healthy only when it's healthy competition. I don't have to make the call in this regard, and I'm glad I don't. So far our policy is to adhere to our pricing matrix and remain honest, fair and transparent. We are permitted to talk about the margins we make, and the amount it costs to do business. The products and labour have costs, and its our responsibility to make the service and care we provide closes the gap for pricing disparities. We can't control what our competitors do, but we can influence the customers. By honouring our warranties, providing extra care and truly valuing our customers we insulate against quote-jacking.

In regards to that quote. A lot of the time it is simply individuals looking for a deal.

I tend to call their bluff more of ten than not. I make it my practice to never bad mouth competition; but I do tell them this:

"Whether you choose to go with my services or decide to let another firm handle your case, I wish you the utmost success in the matter"

I sincearly mean that.

A lot of the time they do tend to try and banter and I tell them "I run a firm not a market". You have to be firm, but reasonable, with your price structure.

Know your value and take into consideration your overhead as well as the case load. You can't have a bleeding heart for everyone that walks in the door. I do in fact offer discounts (more often than my accounting team likes), but there are times when you need to stand firm on your decision(price) and people will respect you for that.