One of the most common reasons that salespeople lose business is because their competition was less expensive. As our world is becoming flatter and the do-it-yourself customer is becoming more common, price is becoming more significant every year.
How can you compete while continuing to deliver high value? Here are six best practices to competing and beating low-cost providers:
1. Let them know you will be more expensive. Winning a sales opportunity after surprising your prospect with the highest price is like walking up a hill of ice – it is possible, but you are going to get hurt along the way.
When you know that you will be the most expensive, let your prospect know as early as possible. Don’t be a jerk, just humbly explain: “In our experience of competing against these other two companies, we are usually more expensive, so I assume we will be the highest on this project as well. I just wanted you to know so there will be no surprises.”
2. Sell yourself. Your goal is to make your prospect willing to pay extra for you – not your company, services or products…for you.
During the selling process, be the most professional salesperson possible. Make sure your prospect understands the unique things that you do after the job has been awarded. Make them addicted to working with you and wanting more.
3. Develop an internal champion. You cannot bash the competition, but your internal champion can. After establishing a relationship with your champion, make sure that they understand your superiority over the low-cost competitors.
You can be as transparent as: “I hate to say these things about a competitor, but I feel like you should see this comment from one of their customers. I’m not going to show this to your board – that’s my style – but I want you to know.”
4. Give them a taste. If I do not get upgraded to first class on a flight, I always pay a little more for the economy premium seats. Why? Because I have sat in them before and cannot go back to standard coach.
Give (or sell at your cost) something to your prospective customers. For example, offer to conduct a risk assessment or fix a challenging problem they have faced for months. Let them see, touch, and feel the difference between working with you and the cheap guys. If you do this right, they will never go back.
5. Know your differentiators. When I ask 10 salespeople from the same company to tell me their company’s differentiators, I receive 15 different answers.
This idea is simple, but rarely do salespeople fully understand and clearly articulate their company’s differentiators. Once you are able to do this, you will be able to answer the question, but also will be able to hold yourself higher throughout the selling process. Fully understanding the factors that make you better is a key confidence builder, and your prospects will spot your poise a mile away.
6. Logically justify the extra expense, but be careful of the timing. Most salespeople have shown a return on investment graph that illustrates a higher initial investment making logical sense in the long term. This is an excellent practice to help your customer justify spending more with you; however, most of us do this too soon.
When providing logical justification for your higher price, wait until your prospect wants to work with you. If you present this exercise too soon, then you will not get their full cooperation. But once you make them a raving fan, your prospect will go to all lengths to support your justification.
Chris Peterson is the founder and president of Vector Firm (www.vectorfirm.com), a sales consulting and training company built specifically for the security industry. To request more info about the company, visit www.securityinfowatch.com/12361573.