Is it fair to assume that you've simply ignored the importance of protecting your price against the price shoppers? Have you forgot how to protect your price? Unfortunately, when those price shoppers call with the urgent request, you are once again reminded of why you need to start protecting your price. It just so happens that they are once again working on a huge order, and you could be a part of it if you play your cards right. You are led to believe you are in the final running as the supplier to win the business.
This customer just needs one more piece of the puzzle, that last price to make the final decision. You are given a date to submit your final proposal. You gather the troops and get to work. You've been through this before with this customer, but are sure this time will be different. This time the customer will order. You submit your proposal, and then wait, and wait and wait. On your follow up call, like so many times before, your customer claims that another supplier matched or beat your price. You fell short again, or so they want you to believe.
What if you had the best price & your customer was it to lower other competitive bids?
Some purchasing agents tend to have preferred suppliers, and others they rely upon for competitive market information. They use the "carrot and stick" approach. This figure of speech implies the customer tempts you with an opportunity for business in order to get you to provide them with important information. Customers may use this tactic to get you to provide them with another reference on pricing. They could have a supplier who has a fantastic product or service, and just need you to keep this supplier's pricing in line with the market. Your customers have come to rely upon you to keep others honest and drive the pricing down. At the end of the day, you are saving them money and they never purchase from you.
Your product or service may be as good, if not better, than your competition. However, as long as you continue to provide the information they need, without preconditions, your customer will continue to use you solely as a pricing resource. You must accept that protecting your price is an essential aspect of sales success.
Put an end to them using your hard work against you
Sometimes customers simply don't understand how much time and effort goes into putting a proposal together. This is especially true if you have given the impression that it is a rather simple and straightforward task. The issue is that customers learn how to deal with you by how you deal with them. If you give the impression that you are more than happy to provide pricing, without any idea of whether you'll secure an order, then they will continue to come back for the information you are so willing to provide.
Without criteria on how a decision will be made, you are sure to fail
It is natural for customers to assume they are doing nothing wrong when you give them the impression you don't have a real interest in winning their business. There are ways to establish an initial agreement or contract with them when you begin discussions. It is essential to do this in order to protect your position in the market. In essence, you are providing pricing to a customer who is then conveying that price to your competitor.
While there is no perfect way of stopping this from happening, there is a way to ensure that you limit the number of times you allow this to happen to you. Establishing some boundaries with your customer will go a long way to ensuring they come to appreciate your efforts. You can stop them from using your pricing against you. It is simply a matter of making a decision not to allow it. The following is a step by step process to change your customer's behavior, and position yourself as a more active participant in the decision making process.
The above video explains how to defend your business from overseas competitors. To learn more, please go here.
1. Recognize you have more power than you realize
- Customers need good suppliers.
- Customers won't change their approach unless you force them to.
Understand that your customer needs you. Whether they need you for pricing, technical support, or as a security blanket in case their main source lets them down, they need you none the less. The fact is, customers hate to lose good suppliers.
It is very possible your customer knows your reputation, and recognizes that one day they may need to place an order with you. In the meantime, the customer is perfectly fine with using you as a pricing reference. After all, to the customer, you seem to be fine with it as well. Unless you change your approach, your customer will never change their behavior. You need to show you have a real interest in knowing everything needed to win the order, and demonstrate your expectation of closing the sale.
2. Never quote blindly.
- What plays a role in your customer's decision to purchase?
- Gather all information about volume, conditions of purchase, delivery requirements,and when the decision will be made.
- Confirm that you will call prior to your customer's decision to review the proposal.
Never quote blindly! Providing pricing without understanding the requirement, or how your customer will make a decision, will surely lead to failure. Ask your customer directly how they will go about making a decision. It may seem rather straightforward to you, but there could be criteria you are completely unaware of. It's important to have the client state how they will make their decision. You will then address these criteria in your proposal. You need to know volume, application, potential for future business, delivery requirements and when the decision will be made. You must come to an agreement with your customer about when you can call and go over your proposal. It is always best to call a day before your customer makes his final decision. This way you can make any final adjustments if your customer allows it.
3. Good or bad, you want an answer.
- You want their business, but won't close your doors without it.
- You will not challenge their decision. You simply want to know where you stand.
There is no way to guarantee you'll win the business. Ultimately, the customer will decide whether you merit the order. However, by explaining to your customer that you want to know where you stand, and that you expect an answer, they will come to appreciate your position and seriousness about winning their business. All you want is to know what their decision is. Customers aren't in the habit of calling suppliers back to tell them they purchased elsewhere. They simply don't do that for fear that the decision to purchase elsewhere will be challenged. You want to demonstrate to your customer that you won't challenge the decision. As much as you would like to have their business, you won't close your doors without it.
The above video explains the essentials of busines-to-business negotiation.
4. Use the Trial Close Technique: Get the Customer's Price
- In order to proceed, your customer will now have to provide you with the price they'll purchase at.
- Instead of you getting the price, you'll instead confirm your customer's price request. Once they do, they must place an order immediately.
Everything up to this point has failed. Your customer has continued to use your pricing against you without every rewarding your hard work. The final step is to use the trial-close technique. In this case, your customer will have to provide you with the pricing. That’s right! In this case, your customer will tell you what price they’ll order at and you’ll see if you can secure it.
The reasoning for this approach is that you can’t continue to offer aggressive pricing without losing the support of management. At some point, you’ll be told to abandon pursuit or simply refuse to quote. It’s not a bad idea to explain this to the customer. It may be difficult, but hasn’t it been far more difficult having your pricing used against you?
Here are a couple of statements that could be used.
“Mr. Customer, our company has continued to provide aggressive pricing without any orders. We want to become a valued vendor, but in this case, we need to know what price you’ll buy at. My management is reluctant to provide pricing again”
“Mr. Customer, we’ve discussed how my company has given me the green light to offer you aggressive pricing in the past. Unfortunately, without any orders to speak of, they won’t allow me to do it anymore. In this case, we need to know the price you need to buy at”
Once your customer provides you with the price they need to purchase at, it's up to you to make sure they understand that if they don't purchase, you'll no longer be able to come to the table with aggressive prices. In essence, the trial close technique asks your customer to give you the price they need to order at. You then tell your customer that they must order once you confirm the price.
When it comes to protecting your price against the price shoppers, it really does involve following these four aforementioned steps. When you take the time to explain to customers that your company can no longer provide one excellent price after another, only to come up short, your customer will inevitably understand that they face losing a supplier. No company wants to lose a supplier – even ones they aren’t buying from.
Your business offers them a window into the market and a safety net in case their current vendor falls flat. There is nothing at all wrong with using the trial-close technique. As a salesman, you rely upon your management to provide you with the necessary tools to win orders. Your customer simply can’t continue to abuse those tools indefinitely.
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