Feb 05 2008
Is Your Customer Giving You The Price Squeeze?
The JF Guest Author Spot
A nasty little insecurity habit I see in many business owners and sales people is their fear of losing a deal.
So how does this habit show up?
It’s simple.
You have a customer/potential customer who asks for a proposal from you. You provide the proposal, quote your rate and then something happens that honestly makes you quiver with fear.
It is when the customer says…
“Company X said they could do the same thing for cheaper. Can you match their rate?”
And in a heart beat you say “Yes – I can.” – and you proceed to drop your rates as quickly as if you were holding a hot potato!
You Just Failed The Squeeze Test
Listen.
Do you know WHY customers buy on price?
They don’t see any noticeable DIFFERENCE between you and your competitor. So they start squeezing your proposal and the competitor’s proposal just like they were standing in the grocery store and picking oranges.
This is also reinforced when you drop your prices after “being squeezed”. In fact, they feel that you “false advertised to them.”
You basically have told your customer that:
• your initial proposal was a rip-off
• you’re desperate for their business
• you aren’t to be trusted in the future
So What Should You Do In This Type Of Situation?
Easy.
Don’t put yourself in a position to be “juiced.”
1. Understand the hot buttons of what your customer is looking for and establish their budget AHEAD of time if possible. (Don’t be bringing in the Package A, B or C plan – that’s for wimps.)
2. Position your company with something unique to your services that will actually MEAN something to your customer.
3. If you know your rates are fair - then don’t fold like a taco when faced with the “price squeeze.”
In negotiation – it isn’t about one party getting everything and the other party feeling cheated. A successful negotiation is where both parties feel satisfied.
If you drop your rates to win the deal – you will actually feel resentful of your customer as your profit margins have been slashed. This isn’t exactly going to give you the warm fuzzies – and you will end up providing “less than” customer service and product. (you know what I’m talking about here!)
If the deal is worth negotiating over – then make sure your customer “gives up something” in order to receive that discounted rate.
You also have one last choice (which happens to be my favorite). I stick with my rate (which I know is fair), I advise them of why my rate is higher than my competitor and how I can solve their problem in a UNIQUE way.
And then?
I also show them that I am willing to walk away. Remember in the world of selling – this shows confidence, honesty and that you have a backbone. (instead of a wishbone!)
So there.
Kim Duke, The Sales Diva, provides savvy, sassy sales training for women small biz owners and entrepreneurs. Kim works with clients internationally, showing them The Sales Diva secrets to success! Sign up for her saucy and smart FREE e-zine and receive her FREE Bonus Report “The 5 Biggest Sales Mistakes Women Make” at www.salesdivas.com
Kim is also a member of the Top Sales Experts team and you can read more about her here
Today’s News: My good friend Paul McCord’s latest book, “SuperStar Selling: 12 Keys to Becoming a Sales SuperStar“, has just hit Amazon as a pre-release offering. As a matter of fact, the posting is so new they still don’t have a picture of the cover of the book up; they don’t have a page count (251 pages); and they don’t have the “search inside” feature up and working (they are so far behind on this feature it usually takes months to get it up and running). The book should be in stock for delivery by the end of February or very early March.
Nevertheless, the book can be ordered now. They won’t charge your credit card until the book is actually in stock and ready to ship. The best part is that if you order as a pre-release offering, you’ll get a 5% discount. Then when the book is in stock, if they are offering a discount off cover price ($16.95), you’ll get the discounted price PLUS the extra 5% 
Over at Salesopedia, this week’s highlighted topic is sales process and they are showcasing the work of some excellent authors, plus me - you can read them all here
Tomorrow: Thoughts about confidence and successful negotiating.
