When Your Competitor is Cheaper | Sales Objection

Summary

This sales training video script offers a strategic approach to countering competitor undercutting in sales negotiations. The speaker advises against immediately lowering prices and instead suggests guiding the prospect towards results-based thinking. They provide a step-by-step conversation framework to understand the competitor's quote, highlight the importance of desired outcomes over price, and present alternative options that emphasize long-term value. The script concludes with an industry-specific example involving home improvement and windows, illustrating how to steer the conversation towards a solution that aligns with the customer's needs and justifies a higher price point.

Takeaways

• 🔔 Always encourage prospects to subscribe and enable notifications for your YouTube channel to stay updated with new content.
• 💡 When faced with a lower quote from a competitor, ask for specifics about the quote to understand what it includes and potentially uncover if the prospect is using it as a negotiation tactic.
• 🤔 Shift the prospect's focus from price to results by asking if the price is more important than solving their problem and achieving the desired outcome.
• 📊 Use a comparative approach to present different options, highlighting how each choice aligns with the prospect's desired results, not just the cost.
• 🏡 In industry-specific examples, like home improvement, emphasize the long-term benefits and cost savings of choosing a higher-quality option over cheaper alternatives.
• 🛠️ Offer multiple solutions that cater to different result-based needs, such as short-term savings versus long-term value and problem resolution.
• 💬 Frame the conversation around the total cost of ownership, including future replacements and ongoing utility costs, to illustrate the true expense of a cheaper option.
• 🌟 Highlight the unique selling points of your proposal that directly address the prospect's痛点 and how your solution can provide a comprehensive resolution.
• 💼 Encourage prospects to think critically about the long-term implications of their purchasing decision, positioning your offering as the most cost-effective in the context of achieving their goals.
• 📈 Join the Sales Revolution community for additional sales training, resources, and support to enhance your sales strategies and techniques.

Q & A

What is the primary strategy suggested in the script for dealing with a competitor's lower price?

The primary strategy is to shift the prospect's focus from price-based thinking to results-based thinking. This involves understanding the specifics of the competitor's quote and then guiding the conversation towards the outcomes and benefits of your own proposal.

Why is it important to ask the prospect about the specifics of the competitor's quote?

Asking about the specifics of the competitor's quote is important because it helps to verify if the prospect is genuinely comparing accurate proposals and to understand what they are actually getting for the lower price. It also provides an opportunity to highlight the value and benefits of your own offering.

How does the script suggest responding when a prospect claims a competitor has offered a lower price?

The script suggests not immediately dropping your price. Instead, inquire about the details of the competitor's quote and then use that information to guide the conversation towards the results and outcomes that your proposal can deliver.

What is the purpose of the hand gesture mentioned in the script when discussing price versus results?

The hand gesture is used as a visual aid to emphasize the difference between price-based thinking and results-based thinking. It's a technique to help the prospect focus on the long-term value and outcomes rather than just the initial cost.

Why should a salesperson avoid commoditizing their product or service?

Avoiding commoditization is crucial because it prevents the sales process from turning into a price war. By focusing on results and the unique value of the offering, a salesperson can justify a higher price and build a stronger case for their product or service.

What is an example of how to seed doubt in a prospect's mind about a competitor's lower quote?

An example is to highlight that the competitor's lower quote may not include all the features or benefits that your proposal does, suggesting that the cheaper option might not deliver the desired results or could require additional investments in the future.

How does the script recommend presenting alternative options to the prospect?

The script recommends presenting alternative options that focus on different levels of outcomes and their associated costs. This allows the prospect to see the long-term value in choosing a higher-priced option that provides better results.

What is the significance of the industry-specific example provided in the script?

The industry-specific example illustrates how to apply the strategy of results-based thinking in a real-world context. It shows how to tailor the conversation to the prospect's needs and the specific benefits of the product or service being sold.

How does the script suggest tying the prospect's problems to the benefits of your proposal?

The script suggests bringing up the prospect's specific problems and showing how your proposal can solve those problems. This connects the benefits of your offering directly to the prospect's needs and desired outcomes.

What is the final call to action for the viewer in the script?

The final call to action is for the viewer to join a free Facebook group called 'Sales Revolution' for additional training and resources to improve their sales skills.

Outlines

00:00

💼 Handling Price Competition in Sales

This paragraph discusses strategies for salespeople when faced with competition that offers lower prices. The speaker advises against immediately dropping prices to match a competitor's quote. Instead, they suggest engaging the prospect in a conversation about the specifics of the competitor's offer to understand what it includes. The goal is to shift the prospect's focus from price to results, emphasizing the value of the outcome over the cost. The speaker provides a generic example of how to steer the conversation towards results-based thinking, which involves questioning the details of the competitor's quote and proposing alternatives that align with the prospect's desired outcomes. The approach is designed to prevent commoditization and position the salesperson as a provider of solutions rather than just a commodity.

05:00

🏠 Applying Sales Strategy to Home Improvement

In this paragraph, the speaker provides an industry-specific example using home improvement sales, specifically window replacement. They illustrate how to counter a competitor's lower quote by offering the prospect different options that emphasize long-term value and problem-solving. The speaker suggests presenting the prospect with three choices: cheap windows that may need replacement soon, mid-range windows that offer a balance of cost and durability, and high-quality windows that solve specific problems and provide long-term savings. This approach encourages the prospect to consider the total cost of ownership and the benefits of investing in a solution that meets their needs effectively, rather than opting for the lowest initial cost.

10:01

📢 Inviting Engagement and Further Learning

The final paragraph serves as a call to action, inviting viewers to join a free Facebook group for further sales training and resources. The speaker emphasizes the value of community and continuous learning, offering a free mini-course called 'NEPQ 101' as an incentive for joining. This course is designed to equip participants with a set of questions and phrases to use in various sales situations. The speaker also mentions regular live trainings and Q&A sessions within the group, highlighting the benefits of networking with other sales professionals, entrepreneurs, and executives who are also looking to improve their sales skills.

Keywords

💡Competitor undercutting

Competitor undercutting refers to a scenario where a competitor offers a product or service at a lower price than yours. In the script, this is a central challenge faced by salespeople. The video aims to provide strategies for overcoming this by shifting the focus from price to value and results. For instance, when the prospect mentions XYZ company's cheaper quote, the salesperson is advised not to immediately lower the price but to understand the specifics of the competitor's offer and then guide the conversation towards the value proposition.

💡Price-based thinking

Price-based thinking is when a customer focuses primarily on the cost of a product or service rather than its value or the results it delivers. The video emphasizes the importance of steering customers away from this mindset. It is illustrated when the salesperson is advised to ask the prospect whether price or the desired outcome is more important, thereby shifting the focus from a cheaper price to achieving the desired results.

💡Results-based thinking

Results-based thinking is an approach that emphasizes the outcomes and benefits a customer will gain from a product or service. The video script uses this concept to suggest that salespeople should guide customers to consider the results they want to achieve rather than just the cost. This is exemplified when the salesperson is instructed to inquire about the type of result the customer wants, thereby framing the discussion around solving problems and achieving desired outcomes rather than just price.

💡Commoditization

Commoditization occurs when a product or service is perceived as a generic equivalent to other products or services in the market, leading to price competition. The video warns against commoditization by suggesting that salespeople should differentiate their offerings based on the value and results they provide. The script mentions this when advising against immediately lowering the price, as doing so could lead the customer to view the product as a commodity.

💡Proposal

A proposal in the context of the video is a formal offer made to a potential customer outlining the details of a product or service, including price and specifications. The video script uses the term 'proposal' to emphasize the importance of understanding the competitor's offer and the customer's needs. It is mentioned when the salesperson asks to review the competitor's quote to better understand what is being offered and to tailor the response accordingly.

💡Disarming the prospect

Disarming the prospect is a strategy used in sales where the salesperson aims to reduce the customer's defenses by showing understanding and agreement. In the video, this is suggested as a way to gain the customer's trust before introducing the value of the product or service. The script illustrates this when the salesperson says, 'maybe you're better off going with them,' which shows empathy and understanding before steering the conversation towards the benefits of their own offering.

💡Utility bills

Utility bills refer to the charges for services such as electricity, water, or gas. In the video script, utility bills are used as an example of a tangible result that can be influenced by the quality of the product being sold, such as windows. The salesperson uses the potential reduction in utility bills as a way to demonstrate the long-term value of their product, which can offset the higher initial cost, thereby shifting the focus from price to cost savings over time.

💡Industry-specific example

An industry-specific example is a tailored illustration or scenario that is relevant to a particular industry or market. The video script provides a home improvement example involving window sales to demonstrate the application of the sales strategy. This example helps to illustrate how the general principles discussed can be applied in a real-world context, making the advice more relatable and actionable for viewers in that industry.

💡Value proposition

The value proposition is the promise of value to be delivered by a product or service. It is central to the video's message, as it is the key differentiator that the salesperson should focus on when a competitor undercuts on price. The script emphasizes explaining the value proposition in terms of the results and benefits that the customer will receive, such as increased home value, reduced utility bills, and improved comfort, rather than just the price.

💡Sales strategy

A sales strategy is a plan or approach used to sell products or services effectively. The video script outlines a sales strategy that focuses on shifting the customer's mindset from price to results and value. This strategy is exemplified through the steps the salesperson is advised to take, such as understanding the competitor's offer, disarming the prospect, and emphasizing the long-term benefits and results of the product or service being sold.

Highlights

The importance of subscribing and enabling notifications for new training videos.

Strategies for dealing with a prospect who mentions a cheaper quote from a competitor.

The technique of asking for the competitor's quote to understand what it includes.

The possibility that prospects may lie about competitor quotes to negotiate a lower price.

The approach to disarm a prospect by openly discussing the competitor's proposal.

Shifting the prospect's focus from price to results-based thinking.

Using a generic example to illustrate how to guide the conversation towards results.

The framework for addressing a prospect's request for a lower price.

Offering alternatives that highlight different outcomes based on price points.

Providing industry-specific examples to demonstrate the application of the framework.

The concept of showing the long-term cost of choosing cheaper options versus higher-quality solutions.

Encouraging prospects to consider the total cost of ownership rather than initial price.

The strategy of presenting multiple options to guide the prospect towards the desired outcome.

The use of storytelling to connect with the prospect's needs and problems.

The importance of focusing on solving the prospect's specific problems to justify the price.

The formula for turning a price negotiation into a discussion about value and results.

Invitation to join a free Facebook group for additional sales training and resources.

The offer of a free training called the NEPQ 101 mini-course for group members.

Transcripts

so how do you close a sale when one of

your competitors undercuts you let's say

that you gave the prospect a proposal

with different quotes in it and they're

also getting different quotes and bids

from some of your competition and they

say something like this to you they say

first of all go down to the bottom of

this video hit the subscribe button

that's probably important for you hit

the subscribe button and to the right of

that or maybe the left i don't know

somewhere in there there's like a little

bell that's your notifications button

hit the notifications button as well so

you get notified by youtube every time i

post a new training video which i

typically do two to four times a week

they say hey um you know xyz company

gave us a quote that's cheaper than

yours can you give us a better price now

instead of then just giving them a

better price where they commoditize you

now and now they're going to go back and

forth and negotiate you down you want to

get the prospect thinking results based

thinking rather than price or cost-based

thinking so here's how you do it i'm

going to give you a generic example of

how to start that conversation and then

at the end i'm going to show you how it

works in like an industry specific

example so you can see the framework

that we're using hey can you give me can

you give me a cheaper price like the

company xyz gave us a lower bid or a

lower cost or a lower proposal first of

all you want to find out what that quote

actually is and what it's actually for

so you do it like this yeah not a

problem um can i ask what quote they

gave you

and for what specifically

now why do you want to ask that question

because you have to realize a lot of

your prospects just lie to you they

might not have even met with one of your

competitors they might be just saying

that to try to get you to come down on

your price so you have to understand

that if they can't show you the quote or

the proposal then you know that's

probably what they're doing now so let

me go through this again

yeah that's not a problem um

can i ask what quote they gave you and

for what specifically just so i have a

better understanding well yeah they said

it's going to be this for a b c or for d

f and g ah okay

can you go through the proposal with me

specifically just so i understand

because you know maybe you're better off

going with them that disarms a prospect

where they're open to going through what

that company proposed to them so you

know exactly what you're dealing with

that way you're not guessing

throwing mud against the wall hoping and

praying that something you're gonna say

is gonna stick with them and they're

gonna buy okay now here's where we start

to get them thinking results space

thinking i'm going to move this up here

for you okay

yeah they gave us you know xyz cost for

a b and c and you find out specifically

what the cost is and what it was for

then you say this

well

it really just depends on

what type of result that you actually

want

i mean is is price the most important

thing to you

or solving the problem

and actually getting the result you want

now what did i just do there

when i said now is price the most

important thing to you or actually

solving the problem and getting the

result you want is price the most

important thing to you look at my hands

is price the most important thing to you

or actually solving the problem and

getting the result you want see how i'm

using my hands price based thinking

results based thinking that question

flips their mind when they start

thinking about the result the end result

not the price you don't want your

prospect thinking of the price because

then you're going to get commoditized

with everybody else and compete on price

you want to be able to get them thinking

results based thinking because every

sales person in your industry doesn't

know how to do that like i'm showing you

how to do it all right now they're going

to say well yeah i want the result but

if we can they might say yeah i mean

definitely the result's more important

or they're going to say well i mean we

definitely want the result but you know

price is important too or they might say

we definitely want the result but you

know if we can get a better price that

would be good then you can say if they

say that you're going to go here i'm

going to show you this

can i yeah that's not a problem can i

make a suggestion to you after you this

is after you've seen the quote and the

proposal you know what that is what they

quoted you is for x y and z

which actually only does a b and c now

i'm being generic for a reason you have

to plug in that gap now we could give

you that exact same quote for that but

like i said

it just depends on the end result that

you want so let me go over that again

what they quoted you was for x y z which

only does

a b and c so now you're getting them to

think like oh maybe the company that

gave me a cheaper quote

is not going to give me the result that

i really want see that seeds doubt in

their mind then you agree now hey we

could give you the exact same quote for

that too

but like i said it just depends on the

type of result that you want now what

does that give them thinking again

results based thinking rather than

price-based thinking now i'm going to

give you an industry specific example

just so you can see what happens at this

point let's say that you sold home

improvement okay and let's say you sold

windows okay like i said we train every

industry on planet earth i'm just going

to show you one example because we don't

have much time in this reel or post that

you're watching me alright

we could uh i mean we could install

these cheaper xyz windows that they

quoted you you know you would just end

up having to replace them and you know

maybe five seven years

once they start wearing down

and your you know utility bills will

stay the same so we could give you the

same quote you know for the cheap

cheapest windows if you want now we

could also put in here's where you're

going to give them an alternative

we could also put in like the mid range

window that would last a bit longer you

know maybe 10 12 years and it would cut

your utility by whatever percentage 10

i'm just going to throw something i

don't know okay what depends on the

state you live in for that industry now

so you're giving them options now we

could also put in the mid-range window

that would give you a you'd last a bit

longer maybe 10-12 years and cut your

utility bound by xyz percentages or

here's where you get them back to the

original proposal you had or we could

completely solve the problems you

mentioned and put in the abc windows now

you want to mention those problems okay

let's say for windows they had a problem

with cold air coming in their infant's

room at night and the infant would wake

up and then mom and dad have to wake up

and they're draggy at work and they hate

their lives because they're always

having to get up because it's so cold in

their infant's room that could be their

problem plus their utility bills are

high because of that and they're over

paying so maybe that's their problem

that you bring out of them i mean we

could completely solve the problem where

there was no cold draft coming into your

daughter's room you know we could do

that and we could put in the abc windows

that you said you originally wanted

those are going to last the 20 to 25

years and that would cut your utility

bill down by i'm just making up a number

30 percent

so the question is so you give them the

three options results based thinking so

the question is really

if you thought about it

which is really more expensive

is it more expensive to get the extra

funds

to put in for the windows

that last the longest you'll increase

the value of your home and cut your

utility down build down by xyz

percentages or

is it more expensive let me go this here

or is it more expensive to put in the

cheap windows

that don't really

last that long

the cold air still comes into your

daughter's room at night

and you end up having to replace the

windows again in five years anyways like

if you thought about it

which is really

more expensive

okay

what did we just do there we got the

prospect again at the end to think more

results based thinking over price or

cost based thinking does that make sense

i want you to do that next time now i

just gave you a formula in the beginning

of that

for

let me go back here

this crazy white board here

so i just gave you the formula

that you can use for any industry here

in the beginning

and then at the end i showed you an

industry specific example so you want to

watch this a couple of times and write

that down write that formula for your

specific product or industry that you

actually sell in i want you to do that

next time a competitor comes in and

undercuts you and the prospect says hey

you know we got a proposal or a bid from

xyz company that's cheaper than yours

can you give us a better deal can you

give us a better price rather than you

just dropping down where your company

loses tons of money you lose a ton of

commissions if you take them through

that formula and get them to think

results based thinking over price-based

thinking they will always pay you more

than your competitors because they're

more you've got them to more focus on

the end result than the price or the

cost because they start to view at the

end that it's actually more expensive

by going with the cheaper option from

another competitor than it is to go with

a higher based option that completely

solves their problems and gets them the

result they want and they'll gladly pay

you more for that try that next time and

see how that works for you

now if you're wanting to learn how to

sell more of your products and services

than you are now join our free facebook

group go to

www.salesrevolution.pro we should have a

link on here somewhere sales revolution

dot pro

right when you join the sales revolution

dot pro facebook group because we've got

thousands of entrepreneurs and there are

thousands of sales people like you

thousands of coaches consultants

executives in there that want to sell

more right when you join check your dms

because we're going to message you some

of my team is going to message you a

free training called the nepq 101 mini

course it's going to give you a list of

different questions and phrases you can

use in any sales situation that alone is

going to help you sell more than what

you're doing now and we go live in the

facebook group about three to four times

a week with different subject matter

trainings different q and a's different

client interviews that will also help

you sell more join the facebook group

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see you there

you