What to do when your competition is cheaper (and maybe better!)
Posted by Geoff Alexander on Mon, May 04, 2009 @ 01:30 AM
This has got to be one of the more serious sales objections in any salesperson's day, and because technology is moving so rapidly, can occur at almost any time. I'll tell you how it happened to me, and what I did about it.
I once sold a hardware-based software debugger, a great product, and we sold thousands for $5000 each. One day, a new competitor came up with a product that did a lot of what ours did, and sold for $400. We tested it, and it was a great product! The only feature difference was that it didn't have something called hardware breakpoints, a feature that not all software developers needed. So I had to reposition our product. I never like to knock the competition, so I decided a good approach was to "damn with faint praise" and position our competitor into a small corner of the developer world. Our prospects and customers were savvy buyers and read all the journals, and a large percentage of them started asking how our product, which cost ten times more, stacked up against theirs. And even if they didn't need hardware breakpoints, here's how I responded. Let's call their product the ABC Debugger:
"ABC makes a really good product, and it's terrific if you're building a home software program to run a sprinkler system. But if you're in serious production mode, and have a hard timeline for getting a product to market, our debugger is the only way to go."
Of course, I had to sell the value of hardware breakpoints, too, even if the value wasn't perceived initially. You know that I place a real value on asking ROI questions, which I teach today in my telesales training courses, so I knew what they were building, who their customers were, and had an idea of how much revenue that product was going to produce for them. My customers' concerns about product rollout timefames turned out to be way more important than a $4500 cost differential per unit, and our sales never faltered. Within a year, our own engineers developed a new flagship product that sold for $20,000 and was wildly successful, but we never stopped successfully selling our $5000 debugger, either.
Damning with faint praise is a great technique when your prospect brings up the name of a worthy competitor. Use it along with your important ROI questions, and add it to your Best Practices Playbook. And if you have another way to handle this sales objection that's worked successfully for you, tell us about it!