Thoughtful Thursdsays – When your competitor’s price is hard to believe

The professional sales person is typically delighted to get information about competitive prices. From time to time however the information is hard to believe, especially when the numbers are excessively high or low.

Today’s sales thought is about processing the information before reacting when competitive prices so not seem to make sense.

Whether the prices seem unusually high or low it is important to ask yourself “Why?” and gain insights as to the reasons.

We will assume that the source of information is credible.

In the case of the higher price scenario, the reasons may include:

• They want to quote on the opportunity to keep the door open, but are happy to let the business go another supplier. If they do get the order, the price premium makes up for the reason(s) they are happy let the business go.
  • They may be very busy
  • The customer may be difficult to work with
  • They may be at operational capacity
  • It may not be an apples to apples price comparison
• It may be a strategy to increase margins and re-target to a more up scale market
  • Who else are they calling on?

When competitive prices seem to be unrealistically low, do not be quick match without first thinking about the reasons for your competitors position.

• Are they offering the price to everyone?
• Sales may be down and they want to buy market share
• They may want to move excess inventory
• They may want tomove old inventory
• It may be a stragetic play for addtional business
• It may be a move to improve cash flow
• They may have additional capacity and wish to decrease idle production time

There are many reasons that competitive price strategies might make you wonder. It is important to analyze the information, and consider all the scenarios before making your decisions on how your business will react.

Good selling,
Richard

Have a question about sales? Contact Sakanashi and Associates Inc. and I will respond.

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