Imagine a scenario where a hungry and capable competitor is trying to take away one of your best customers. No matter how positive your history with the customer is, he or she will ask one question after being told that another, similar product or service is less expensive than the one you’re providing.
The question the customer will ask: Why should I stay?
Even the most loyal customers may ask you to provide the answer as to whether they should stay or go. You should try to make your answer clear and compelling. It should reflect what you have accomplished in working together, while painting a picture of the results that lie ahead.
Price is not the issue
Customers usually don’t leave because someone offers them a lower price. Even the most price-sensitive customer usually faces something more worrisome than price.
A recent survey pinpoints goals customers hope to achieve and setbacks they try to avoid:
- Customers desire more gains — e.g., profit, productivity, performance, convenience, quality and safety.
- Customers hope to avoid pain, hassles, backorders, waiting time, breakdowns, mistakes, downtime and quality problems.
Increasing your effectiveness
Understanding what your customers need, discovering what they want and helping them avoid their fears increases your effectiveness in dealing with price cutters. Even price shoppers acknowledge that your understanding of their personal needs increases your chances of keeping their accounts.
Satisfaction is key
Satisfaction is the key to retaining customers in the face of stiff competition. Customer satisfaction refers to the unique and special benefits that your product or service offers that your competitors can’t supply. Your job is to constantly remind your customers of those benefits throughout the relationship, not just when price-cutters call.
Improving customers’ businesses
Because prospects are looking for a valued business partner, it’s a good idea to focus on improving the customer’s business, as opposed to selling a product or service at a competitive price. When you sell value — your best combination of quality, service and price — you will have a much better chance of keeping the account
More respect and trust
The increase in the information being shared by salespeople and customers today symbolizes a radical change in business relationships. It reflects a new level of trust and a new type of partnership.
It’s the one thing that price-cutters find most difficult to copy.
Energy, enthusiasm and persistence
Most price-cutters fail to generate either energy or enthusiasm. They only have a low price going for them, and that’s not enough for sophisticated buyers. Having the persistence to retain regular contact with customers, even after the account is lost to a price-cutter, can pay huge dividends down the road.
When problems do arise with price-cutters — and they will — the first company the prospect considers is usually the one who had the persistence to stay in touch and help pick up the pieces.
If you lose
Despite your best efforts, sooner or later you’re bound to lose out to a price-cutter. When it happens, you can use it as a powerful learning experience that helps you develop the skills you need to deal with future price-cutters.
Here are critical points that may help you overcome the loss:
- Use the rejection as a feedback device for self-improvement so you understand how to improve the way you deal with customers.
- Channel anxiety into a creative force for achievement so you will be able to overcome frustration.
- Recognize that if you can’t accept an occasional failure, you will quickly lose your enthusiasm for selling.
- Believe you always have a chance to succeed when dealing with price-cutters.
- Accept that occasional failure is the ultimate learning tool. Every time you lose out to a price-cutter, you should learn a powerful lesson.
Adapted from: Beyond Selling Value, by Mark Shonka and Dan Kosch, founders of IMPAX Corporation, a marketing and sales consulting firm with clients such as IBM, DuPont, AT&T, Microsoft and Eli Lilly.
