Competing on Price in a Down Market

An article in USA Today discussed the demise of a major electronics supplier in the past year.

One of the major reasons the article sited was the inability to sustain profits against the low ball competition! Having had a reputation for better service and added value, the supplier cut its best and most experienced people and moved to compete on price only!

Obviously a big mistake!

The low ball competition had lower overhead, understood the bottom feeder mentality and could function on the lower margins.

One might ask what this has to do with me in selling equipment, services or supplies.

Answer; there is always a lesson to learn! If you are getting hit with the price competition response the following can give you an edge!

Here is the deal, even with a tougher financial market, customers are looking for answers and many are more open than ever! An example is our own sales training. When the phone is ringing off the hook no one has time for sales training. But now when the phone has slowed down, people are aware they may need to approach their sales with a higher skill level and are looking for sales training and willing to invest the time and dollars.

The reality is the customer is looking for answers, not products! Those that can provide answers and solutions will get the sale and the customer long term!

Meanwhile those that focus on selling product will always be fighting the price war and spinning their wheels!

The first thing needed to give you the edge is your own thinking and attitude. One needs to realize that customers now need solutions that work! So ask yourself:

1. What really does my product or service potentially solve for my customers?
2. What can this solution do to help my customer not only survive but grow in this economy?
3. How can my customer measure or realize a return on investment with my solution?

Because you have analyzed your product against the previous questions, you now are thinking beyond your product or service and more solution focused versus product. This will give you a mental edge over your product focused competitors!

IMPORTANT: If you customer sees no advantage, difference or added value to your offering, then price is the only decision point left.

Now because you are solution focused the customers are seeing you. So how do you get them away from a price only decision?

Once more ask yourself these questions, and then formulate open questions to obtain the information from your customers.

* What really is your customer's main objective, in their words?
* Are they and you able to describe this end result clearly to others?
* What is their current situation?
* Why are they in this situation?
* What do they see needing to happen to obtain their main objectives?
* What are the barriers or obstacles they need to overcome to meet their main objectives?
* What is in it for them, in their words, if they could obtain their main objectives?
* What are they willing to do to obtain their main objectives?

Now stop and really think about these questions! Can you clearly answer each of them fully and with total confidence?

If your answer is yes, then you are most likely not experiencing the price issue as much as others. On the other hand should the answers be blank you know where the problem is!

Here is the solution!
1. Invest the time to create open questions to uncover the information for each question above.
2. Forget your product and ask the questions to uncover this information.
3. Listen, listen and listen to what your customer is really saying.
4. Ask lots and lots of clarifying questions.
5. When the customer asks what the solution is, then and only then bring out your solution!
6. Enjoy the success, a new relationship and a high margin sale!

If you are skeptical about this approach, find someone making $200,000 in commissions a year and ask them about it!

I have seen it before; things are great and just about anyone can make a sale. Things get tougher and the field thins leaving only the professionals that are willing to adapt and do things differently.

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