How to Stop Losing Deals to Price

Picture this...

You're at the signing table for a deal you've worked your ass off to close. They're at the finish line, just pending the contract. They're going to sign. They have to sign. You've answered all their objections. You negotiated hard on the price, and maybe even gave away a little more than you should have. That's okay. They verbally agreed to the deal - signing is just a formality.

Except at the last minute, the final hour, the moment of the close, they don't. And they cite a lower price from a competitor when you ask about the sudden change of heart. Game over. Sale not closed. Lost to an undercut from a competitor.

Heartbreaking. You were right there and before you even knew it, a commission you had already spent in your mind evaporated right before your eyes. And worse, you were already giving the deal away so you couldn't compete with the price your former client was offered.

There's nothing you could have done. You just got undercut. You lost another deal to a lower price. It happens.

Matter of fact, how many deals have you lost like this in the past 12 months?

Let's say your average commission is $500 and you lose 4 sales per month to a lower price. $500 x 4 = $2,000 per month in lost commission. 

Here are some things you can buy for $2,000 per month:

A Brand New Audi R8

A $375,000 second home

A pair of custom made suits

Tuition to private school for your kids

A personal chef

A coach of any kind

A $6,000 vacation once per quarter

Two Million dollars at retirement: $24,000 invested per year at 7% return for 30 years = $2,267,820

For years, I did what every other salesperson does and just lowered my price as low as I could to earn the deal. Sometimes it was enough, and sometimes it wasn't. When my lowest (profitless) price wasn't low enough to beat the competition, I lost the deal. I was frustrated. I would feel my face get hot every time my customer brought up a price objection.

I had no idea how to overcome a lower price from a competitor without lowering my price. Most salespeople have no idea how to do it either. They're taught bad strategies that are old, tired, and don't work.

I know the secret now. I discovered it during my time as a loan consultant helping people refinance their auto loans. After a desk switch, I was lucky enough to sit next to the smoothest, most effective salesperson I had ever met.

He was at the top of the board every month, making more money than I had thought possible. It was exciting to sit next to someone I knew I would learn a lot from. It wasn't long before I heard something I had never heard before: 

"Let me ask you something, Jackie: if their rate they're offering is lower than mine, why did you call me back?" My new neighbor asked his customer, his voice dripping with empathy.

"Why else?" He asked her. That's a weird question, I thought.

"Why else?" He asked again. What? Didn't he just ask her that?

"Uh-huh. Thank you. Why else?" He asked again. I'm totally lost at this point, why does he keep asking her that? What is she saying? I wondered.

I had never heard someone approach the price objection like this. I was flabbergasted. And before I could gain my bearings, I heard something else:

"Jackie, that's the right decision. You're doing the right thing, exactly." He said, turning and smiling at me.

I was dying to know: "Did you close it?"

"Yeah, she signed." He said, nonchalantly.

"How much higher were we?" I asked, in disbelief.

"We were 1 point higher." He replied, a smidge of smug in his voice.

One. Point. Higher. My neighbor had just closed the price objection on something other than price. Value. He didn't even have to say anything! When I interrogated him for details on his approach, he explained:

"Most people choose to buy for lots of reasons besides price, but they'll let you believe that if you let them.

All I do is help them remind themselves of the other reasons that are important, which causes an instant comparison to the inferior product offered for a lower price, and since I'm the one asking and helping with this decision, I usually earn the deal without much more effort from there.

You have to treat them right from the beginning though, or doesn't work. You have to have a strong rapport."

I couldn't believe it. I had mastered many of the other objections we came across, but this one had always evaded me. It was my kryptonite. Seeing an effective strategy at work was inspiring and exciting for me.

Over the next few months, I practiced, drilled, rehearsed and recorded the results of a process-driven approach, as I prefer to sell with a process (and you should too).

Along the way, I tried to create my own word tracks and tried variants of the approach I heard and searched for anything similar from sales gurus. I experimented with them all. 

Turns out Grant Cardone's variant of this strategy is the most effective. Credit goes to him as I was not able to re-design or improve what he has. Here's how it goes:

Customer: I can get your product/service for less money elsewhere.

You: I hear that. Please don't let me stop you from getting the best deal possible. At the end of the day my only goal is to help you make the best decision for yourself and your family. Do you mind if I ask - just for my knowledge - if me and the other guy were the same price, who would you go with?

Customer: Well... [and they'll give you a reason that is NOT price related. You've neutralized it. Now all other value components can rise to the surface.]

You: Why else?

Customer: Uhh... [and they'll come up with another answer. The first time you try this, it could get a little awkward. Don't let that deter you. It works.]

You: Why else?

Customer: Hmm... [and they'll give you another reason. You're knee-deep in awkward, but don't worry, it'll all be over soon. And in your favor.]

You: Why else?

Customer: I don't really have anything else. [They could also close right here, or give you another reason. In my experience, they give 3 and then say they don't have anymore. Either way, you've now identified 3 areas you beat your competition and not one of them are the price!]

You: Well, it sounds to me like there are things more important to you than price. Is the difference in price significant enough to justify losing [insert their reasons here].

Customer: You know what, you're right. I'll go with you, I think you're the best deal.

And it's as easy as that. What will you do with your $2,000 per month extra income?

Want to get the most out of this blog post? Practice this strategy with a co-worker, spouse, or friend for 10 minutes per day until you have it memorized. Bonus points if you practice with a co-worker because you'll be helping them buy an R8, second home, personal chef, or become a millionaire.