Salespeople always seem to have a hard time defending price with overbearing and demanding customers. Either it’s their inability to handle adversity, their concern of losing business or merely their unease with assertive customers. Regardless of the reasons why, standing firm on price is much easier said than done. However, is it really the customer who forces salespeople to lower pricing, or is it the company training the customer to make demanding price requests? In a number of cases, it’s the company and its sales team that actively train customers to buy on price. Instead of standing firm, the company forces sales to capitulate. Ultimately, this trains customers to make purchasing decisions solely based on price and nothing else.
Dealing With Customer Price Demands
First, before going into some of the strategies and statements that salespeople can use to deflect customer price requests, it’s important to understand why some customers resort to demanding price concessions. In essence, overbearing customers aim to influence the outcome of these price discussions by using fear, intimidation and or threats of lost business. Regardless of the approach, the aim is to get salespeople to capitulate and drop the price on their bid. Instead of reacting, it's best to understand the real reason for the customer using this scare tactic.
Every salesperson must understand that what customers really want is to reduce costs, and there are far more impactful ways to reduce a customer's costs than simply lowering a product's price. Once salespeople realize that a customer’s demand for lower pricing is merely a request to lower costs, they can then approach the problem with a different mindset.
Confront Overbearing & Demanding Customers!
When confronted with a demanding customer who is unwilling to capitulate on their price request, it’s essential to turn the conversation towards saving the customer money or more importantly, towards reducing their costs of purchase. To help guide you along, I’ve provided some simple ideas that can help reduce your customer’s costs, while allowing you to maintain pricing and gross profit. Each of the following statements are provided with an explanation of how they turn the conversation away from price and towards reducing costs.
Statement #1: “When you say you want lower prices, what you’re really saying is that reducing costs is important to you, correct?”
The above statement is a simple and straightforward approach to confronting a customer’s request for lower pricing. It moves the discussion away from price and more towards reducing costs. This can be accomplished by adopting cost-per-use product benefits where customer costs are reduced by a product with a longer life. In addition, contractual supply agreements can help lower the customer’s costs by reducing lead time & their inventory holding costs. Still, other approaches might focus on reducing freight, or using discounts and incentive programs that reduce costs over time.
Statement #2: “If we could have offered a lower price, we would have. I can assure you of that. Perhaps we can discuss savings of a different kind?”
Again, the intention here is to move the conversation away from price by confronting the customer’s demand head-on. It’s common for customers to assume that your first price isn’t your best. However, when you confront them directly like this, it piques their interest as to what kind of other savings you may be able to offer them. For instance, a competitor may be able to offer a better price, but what is their lead time on delivery? More importantly, what features and benefits does your product have that differentiate it versus its competition?
Take the time to write down how your product, or your company’s approaches, can lower your customers’ costs without lowering your product’s price. You’ll be surprised to see just how many ways you can accomplish this.
Statement #3: “We understand that saving money is important to your company, and this product does save money through cost-per-use and longevity benefits. Our customers have found that…..”
Learn how to defend your business from low-cost overseas competitors: Defeat Overseas Competitors With Three Simple Steps
When discussing a product of yours that has cost-per-use benefits, make it a point to declare that immediately to customers and provide working examples of what those benefits mean in terms of reducing customer costs. Salespeople must be able to quantify savings in a way that customers can appreciate. This means to provide them with real world examples of how the company’s customers have reduced expenditures. The product may have a higher price, but its ability to save money is above and beyond the savings offered by buying lower quality products with a lower price tag.
Overbearing customers merely aim to get sales to give in to their price demands. They use the threat of lost business to force suppliers into meeting their terms. When salespeople are empowered to confront these demands, they are in a much better position to defend themselves, their product offering and their company. However, this requires the company to set a fixed sales price that can not be lowered, unless the customer is willing to increase their volume. When companies set these criteria, they make it much easier for sales to stand their ground and ultimately help in getting their customers to understand that price alone doesn’t lower costs.
To read more about using cost-per-use sales benefits, please read: Sales Negotiation Training: Cost-Per-Use Product Sales Strategies
Comments