Most people in the sales world have probably dealt with at least one or two “low-balling” prospects. What do you do when a prospect says that they’re only willing to buy if you significantly reduce the price?
First of all, (if you haven’t already done so) you must demonstrate the value and benefits of your product or service using yardsticks your prospect is already using to measure his or her success. Lacking a clear picture of the value, why would the prospect be quick to pay full price?
Second, make sure your prospect is comparing apples to apples. Your competitors may be providing a lesser-quality offering at a cut-rate price just to win the business, hoping to make it up in change orders, etc. later.
Third, assuming that your product or service is fairly priced despite the fact that it is not the least expensive option on the market, explain to your prospect the rationale behind your pricing. You can acknowledge the fact that other vendors or services providers may offer lower pricing, but that your superior benefits outweigh the cost difference.
You might also suggest reducing the scope of work in return for granting a lower price. More often than not, the prospect will be unwilling to reduce the scope – and the mere threat of doing so may put an end to the prospect’s price nibbling.
Don’t forget that people always want to avoid risk. Maybe your competitors are cheaper because they cut corners, use lower-quality materials, or pose other risks that could end up damaging the prospect’s reputation or costing them more in maintenance or legal fees than the price difference.
Now, if the prospect is still insisting on a significant discount, you must be willing to walk away. If you don’t, you risk being perceived as weak, and that would be a problem for future transactions, not only with this prospect but elsewhere in the marketplace. You must have the confidence to sell your product at the price it is worth and your services at the price you are worth. Never cheapen yourself.
