When A Customer Says Your Price Is Too High

dan-6Why does it seem that most of our customers pride themselves on their ability to find the cheapest products in the world to put into their products, which they also claim are the best in the world?

How exactly does that work? Does a great chef search the world for the cheapest ingredients he can find to make his greatest meals? Does a furniture maker go to the ends of the earth to find the cheapest woods known to man to build his Chippendale chairs? Of course not!

But in our business, companies literally go to the four corners of the land to find the very cheapest products to build into their products. Man, I hate that!

But it is what it is, as Tony Soprano would say. Selling against price is a very necessary, very evil reality, and it’s something we all have to live with day in and day out. To ignore this fact is to “go ostrich” on your business, and that is not a good thing.

So alas, with teeth gritted to the point of cracking, here are some basic ideas for selling against price.

Make sure you have done your homework. Make sure that you have worked with the customer to the point where he understands that you are providing the best product and the best overall value. Make sure you have done everything you can, and now the only remaining obstacle is price. It all comes down to price.

So, when the customer says that your price is too high, ask him this question:

“Why do you say that?”

Instead of arguing, your job is to seek the reasons behind the price objection. Where did this come from? Make sure it’s an apples-to-apples situation. Our job is to uncover why the customer believes the price is too high. To do that you have to probe, and you have to know exactly what the price difference is.

If the difference is too large, then find out what the problem is.

    1. Maybe you are incorrectly quoting the product.
    2. Maybe your competition is incorrectly quoting their product.
    3. Maybe you do not have a good idea what the customer wants. Maybe he is asking for less than you are perceiving.
    4. Maybe the customer does not know what he really wants. Maybe he is asking for more than he is perceiving.

If you are close to the price, within the realm of it making sense then ask for an opening.

    1. Ask for another shot; ask to reprice the product.
    2. If an order has already been placed, then set up for next time by letting the customer know that you could have matched that price and to make sure to get him to give you another chance to prove it to him.
  • Ask the question, “Why do you feel that way?” A little trick: When you ask someone why they “feel” the way they feel about something, they will always respond with an answer of some kind. This is a good question to help you take control of the situation.
  • Ask the question, “Is price your only concern?” This is useful to ask when price is the first thing the customer asks about. This will help you set up to counter the price issue.
  • Make sure the customer understand the true value of our product. Make sure the customer knows overall value of your on-time delivery. Does he know how much a late board costs? Does he understand the value of speed, such as pure on-time delivery of 12-, 24-, 48- and 72-hour turns? Do they understand the value of completing their design with production-ready products?
  • Does he understand the level of your company’s quality, and how much it costs if the product in the end is no good, fails in the field, or has to be returned?
  • Does he know the value of a good night’s sleep, courtesy of worry-free buying?
  • The key is to make the customer understand the difference between your company and your superior products and the other guys’ cheap crap to the point where they really want to buy from you. They will understand your value and be willing to pay for it.
  • The more you communicate with the decision-maker, the more she will be on your side.
    1. Ask her for help in getting her business.
    2. Ask her to help you understand what it is going to take to win some of his business.
    3. Making yourself valuable to her.

Selling against price does not have to be that difficult. The better a relationship you can create with the decision-maker, the more trust you can instill between your companies. The more valuable you are to him, the better your chances are to win his business.

Selling against price is not pleasant and it is often far from fair, which makes it at times extremely frustrating. But then again it is part of life, so you have to do what you need to do to get the order. It’s only common sense.

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