Inside Sales Telesales Tips Blog

Price Negotiation: Don’t forget “Apples to Apples” comparisons

  

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Gary Swart, CEO of oDesk, told me a great story that underscores the value of understanding what’s going on around a lot of price negotiation conversations. One of the sales objection topics I address in my sales training courses is how to deal with price issues, so here’s Gary’s story:

He had a vendor that he loved, but perceived his price was too high. So he went shopping. And sure enough, he found a better price for a comparable service. Before he closed the deal, he called his old vendor, out of courtesy. So the vendor replied “why don’t you send me the competitive quote? You can strip off the company name, but let’s ensure that you’re getting what you think you’re getting.” So Gary stripped off the company name, and forwarded the quote. Guess what? It was different, and Gary really needed the additional benefits offered by the previous vendor. So they renegotiated pricing, and Gary stayed with his previous vendor.

Today, everyone shops, and previous good relationships don’t always mean that you’ll have carte-blanche in keeping your old customers. So here are some tips to keep in mind to keep you above quota:

1) Do stay in touch with your customers. I advocate calling them once a month. That way, if they do go shopping, you’ll be right on top of things, competitively.

2) If your customer is about to jump, ask for an “apples-to-apples” comparison. And if possible, try to get your hands on the competitor’s quote. Like Gary’s vendor did, you can ask that your customer strip off the competitive company’s name. In my own sales experience, I had many a situation when my low-cost competitor got into my customers, and I had to do some real selling to illustrate what my competitor wasn’t able to provide at his lower price. And it worked a vast majority of the time.

3) Know how your customer calculates return-on-investment. Maybe your customer needs your additional features, maybe he or she doesn’t. So why not ask your customer how he or she calculates the bottom line, and I’ll bet you’ll uncover some important information you didn’t know. (Read my whitepaper on ROI selling for more on this topic). Oftentimes, your customer has to actually prove ROI to his or her CFO, so engaging in this discussion could actually help your customer to do some of your selling for you.

So never get complacent, and work as hard to keep your current customers happy as you do to acquire new ones. And add “Apples-to-Apples” comparisons to your Best Practices Playbook.