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

Hi Jeff, great question.

And no simple answer.

Just remember that YOU pick your customers. If you took a low offer now, you will never get it back up. Plus it shows you are desperate for business. And the low payers are usually the worst. Is that what you want for a business?

The problem you face is your business is viewed as a commodity. When prospects don't see a difference between you and your competitors, they choose on the difference they do see- price.

You should have a number of 'differentiating' scripts, practices, handouts, and systems that make your business different. And use them throughout the discussion.

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:

"I'm not sure where I could reduce our service to lower the cost. You may get a lower estimate, but you won't get better service than our happy customers report- as you can see from the many testimonials..." (Of course this assumes you have testimonials and a handout.

OR

"Many of our customers have come from our competitors. Turns out low price wasn't the bargain they thought. We want you as a customer for life! And we do that with great service and price that's a great VALUE. But we aren't for everyone, some people don't care about the service or the results, they only care about the price..."

Hope that helps.

Mark

Picasso was in Manhattan eating dinner at a fine restaurant one evening when a lady recognized him and approached him in a very excited manner. She grabbed a napkin off of his table and asked "Oh Picasso would you please sketch me something on this napkin?" Picasso simply nodded and grabbed a pen and sketched a drawing on the napkin without saying a word. When finished the lady reached out to take the napkin from him and he pulled his hand back and said to her "That will be $50,000 please." The lady gasped and exclaimed "But Picasso that took you less than 5 minutes!" Picasso drew the napkin back towards his chest and told the lady: "No mam. That took 50 years!"

Experience and reputation demands the higher prices for what otherwise looks so easy, so simple to the uninformed observer. I have over 40 years and my reputation is impeccable. Therefore you can expect that my service/ product is going to be far superior to the competitor who quoted a lower price. In fact I do not even consider them a competitor for we do not serve in the same league. Should your budget demand the lower quote please feel free to purchase from the company that quoted you the lower fee..... Thanks for inquiring regarding my services/ product.

I give a fair price for my services. I am comparable with everyone else. I hope so at least. I don't low ball anymore. I want good quality clients that will appreciate my service and hard work.

I normally respond with "Fantastic, go give them a try and I will see you soon when the bubble bursts" I never get into the game of bargaining and selling short just to get the job. I believe in what we offer as value and quality and will only look at doing something special if i know the business is struggling and needs help to survive. Often if you sell out, you cheapen what you believe in and that should be yourself and your services.

Aloha Jeff, I couldn't resist this question.

There is a time honored restaurant near the French Quarter in New Orleans established in 1946 called BRENAN'S Where the average breakfast costs between $30 to $50 for Ham & Eggs or other similar kinds of breakfast favorites. IF you don't mind standing in line for a couple of hours, and IF you get in!

They invented Eggs Benedict and no matter where else you may think they are as good, they're not the real deal! Personally, I would pay a lot more for Brennan's Eggs Benedict––if you need to ask why, there's no chance you would understand until you taste the difference. FACT

There is a sign above the cash register that reads: "There will always be someone who can make something cheaper and sell it for less as a bargain, and anyone who considers price alone is this mans lawful prey! - I have no quarrel with those who settle for less, they know what their product is worth…"

From Poor Richards Almanac by Benjamin Franklin.

All of my original paintings are like my children and just because some other Artist will paint you what ever you may want for a few hundred bucks--doesn't mean you are well served.

I've actually had this happen to me on many occasion in commodity office machine consumables business and my first response was to drop my pants, but that's 50/50 and once you do it, they expect you to just show up naked eventually!

The second stage of my thinking was this -- "here's my card, I wrote down three numbers on the back. First one is my mobile so you can reach me on the weekend when your cheap vendor screwed up your delivery at the most crucial moment. Second one is 10% -- that's how much when you come back to me your rate is going to be for the first six months. 10% higher than my quote. And the third number is the hourly rate, and I gave you one, to clean up your machines when the cheap stuff wrecks everything and the manufacturer won't honor the warranty you just blew up without having a contingency plan." SWEAR ON A STACK -- that actually worked about 30% of the time within 24 hours, usually before I left the building.

But now I am just here. It goes one of two ways -- (a) the pricing jerk gets -- (and keep in mind that almost nothing is done in person anymore, and I'm way past the toner cartridge business!). The pricing jerk gets this. "Well, if they don't work out in the next 30 days my offer is still good. After that it goes up by 10% automatically. Make sure your purchasing and receiving people are in sync with the way these guys operate. Just want to make sure if you're paying the lowest dollar that you're getting at least that level of service." (b) the poor paper shuffler that had the misfortune of being closest to me in the low price game gets -- here's my card, if these people leave you in a bind and it's about to cost you or one of your co-workers their job, call me I will help you get out of that situation and bill you later as soon as you guys get out of that bad contract."

Sounds dumb, but the jerk needs a jerk and the poor right out of college kid just needs an opportunity to show the boss that he/she can handle the situation by having a back up plan -- and then JUST SIT BACK AND WAIT.

That first 30 days it's nearly impossible for the other vendor not to screw up something -- any vendor including us! But usually no one cares during the getting to know you phase, unless you heighten their awareness to the potential catastrophe that could happen! The no one wants to make a mistake.

In multi-decision maker situations, it's important to make sure that regardless of the personal insult you just received after the time and effort put in, that you'll honor the bid for an additional 30 days, hell, it's the holidays, offer's good through the end of January.

Don't get me wrong, Mark Mehling at www.takecontrolmarketing.com is absolutely correct. We PICK our customers. I have a great one for almost 10 years, pays me in fresh tuna steaks from the family quarterly fishing trip! Best deal ever! Some customers deserve a break, some prospects don't.

Think of it a little bit like reversing the 90 trial period vendor's often are placed upon before a full BPA or engagement letter is completed even.

I apologize if that's a bit of a ramble. But it's almost never really about the numbers, especially if their is a modicum of service involved. It's about not eating a S***T Sandwich in front of the Boss, the Board, the Wife, the Kids, the Bank, whoever.

Honestly, I happily refer competitors to the low ball types. Everyone is happy. I keep the competitors busy with work I don't want, chasing bad cash flow decisions and I either work on more profitable projects or have the time to organize my flip flop drawer (I'm from Arizona).

I would have to say.yes it's prudent to walk away.

I guess it depends on your ethics and your need for the job. Weighing the two depends on how much need you have. In this day and age people are looking for the deal. Are you in business to win or to loose.

If you can answer those questions honestly then you already have the best answer.

My response would be:

I completely understand and I felt the same way when I started shopping for the same service. However, after doing my own research for similar products offered by different companies, I found that nothing beats high quality standards, integrity and customer service.

When sitting down with a home seller, it's common to get asked to lower our commission. My response is "You know, I can appreciate that, and I want to be upfront with you and say "No", I will not cut my commission and for one simple reason. As a professional my time has certain value and I only work with people, like yourself, that realize the value of my service...and before you say anything, think about this...

If an agent is willing to cut his commission, just like that, how well do you think they will hold up when it comes times to negotiate the best possible price for your home? I want to demonstrate , up front, how tough I am going to be for you...therefore, cutting my commission is not an option...does that make sense?

I remember a really smart marketing guy years ago that said "fire your worst 10% of customers once a year". The idea is that they cause you more trouble than they are worth, and they will go to your competitors and cause them trouble. Don't let people work you on price. If you are offering good value for your service, stick to it. You know the difference. If you don't get that customer, they will go to your competitor and make them crazy. Either way, you benefit.

The only thing non-negotiable is my faith or character. You can put a price on service and at the end of the day, you usually sacrifice something either now or later. I can only speak for what you're going to get with me and it's honest price, first-class service, an awesome experience. But if you need some testimonies of my previous customers that told me the same thing but came back to me later to do business with me I can give you some references. They will tell you they choose the lower price but lost more by doing so.