It’s hard to get away from your competition. Clients will ‘thrust’ them in your face, telling you how great they are, how cheap they are, and how they’ll do what you won’t.
All you need to remember is this one thing: If a client goes to the trouble of telling you about the competition’s strengths, they probably want to buy from you. After all why else would they bother? If they wanted to buy from the opposition, they would just do it (especially if they're so cheap and accommodating). They wouldn't bother waxing lyrical to you about how good they are, they'd just tell you 'No' and move on. The reason they go to this trouble is to make you feel worse about your own product. This encourages you to discount/sweeten the deal, which is what they're really after.
I've said it before, buyers want the best product from the best company at the price of the worst product from the worst company. So if they're spending time with you, you're likely the former, and the buyer knows this.
Buyers will also want to see all competitors as equal. If they can lump you all into the same category it gives them an excuse to simplify their decision and make it just about price. But not all providers are the same - in fact they are vastly different and we must force the client to address this. There are many factors in the buyer's decision, we can't let them fool themselves into thinking price is the only differentiator.
People say sport is 90% from the neck up. In negotiating, it's 100%. If you start off by not understanding the game or what the rules are, you'll cop a belting every time (unless you're incredibly lucky and the person on the other side of the table is similarly ignorant).
Also the degree of luck you have will diminish as the value of the deal goes up. So if you sell things that are valuable, you can pretty much guarantee the person on the other side of the table is at least competent, so you'd better be too.
When a buyer starts talking up the opposition, a good negotiator will understand what's happening and respond accordingly. A bad negotiator will try to Wow the buyer with stories and statistics of how great their product is. This is pointless. The buyer's bluster and deceit is designed for one purpose - to get you to discount. It's not because they think your product is lousy - as outlined above, they're likely only talking up the opposition BECAUSE your product is good. So pumping up the tyres of your product won't achieve anything, other than boring the buyer out of their brain (and many deals have been lost due to this misstep alone).
One of my favourites:
When a buyer starts gushing about the opposition, and tells me how cheap they are, one of my favourite responses is "Yep, that's because they should be". How you deliver this line will vary widely depending on your relationship with the buyer, but I never like a buyer to get away with telling me how cheap something is without addressing why it's cheap. There's a reason the word 'nasty' is consistently used immediately after the word cheap.
People aren't stupid. They know you get what you pay for. When price goes down, so does quality. So why should we drop our price? Porsche salesmen don't drop their prices because a buyer tells them they can buy a Hyundai for less (no offence to Hyundai dealerships). These two products simply aren't equal. In fact sticking to your guns on price is one of the best ways to justify your price. Dropping the price tells the buyer that you're not worth what you're asking. Which is why regularly discounting is a slippery pole. Good luck getting the buyer to pay full price at any point in the future...
I'll talk a bit more about how the competition impacts our negotiating approach next time. Meanwhile feel free to drop me a line at email@example.com if you'd like to know more about this subject or any of the previous articles I've written. If you're in business and would like to discuss any aspect of marketing or sales please get in touch. If you're interested in digital marketing you can also take advantage of our current promotion - we're offering a Free Google Health Report so that you can find out where your site currently ranks, which keywords your prospects are searching for and how effective your website is. Check it out here.