When purchasing agents say they are going to buy from a competitor, it’s a classic threatening tactic. “But is that really the prospect’s intention or a scheme to get a lower price?” John Mitchell, president of Mitchell Selling Dynamics Inc., asks. The situation often occurs if the salesperson has been in the plant working with engineers but failed to keep purchasing up to date. When the purchase order goes to purchasing for processing, the PA figures he may be able to squeeze some money out of the preferred supplier.
Reality one to face up to: Are you really a preferred supplier? “Generally, to fill this role,” Mitchell says, “you would have to have had a ‘turning point’ at the account by filling a need, by solving a problem, or by a social connection. A good sales rep knows how to sniff out and deal with a customer bluff. I always tell my students to move slowly and never lower the price unless it is an absolute last resort.”
Reality two to home in on is: What are you up against? Ask the PA who your competitor is and exactly what has been quoted. Make sure the quote compares apples to apples.
Reality three: Determine the reason you were asked to quote. Are you really a candidate? Or is the customer shopping for free information? Is the PA seeking justification or documentation to place the order with an already decided-upon supplier? Is the PA honestly interested in your product and/or service? If so, why?
Mitchell cites a sampling of competitive strategies that worked well in his 25 years of experience as a sales rep, sales manager, sales trainer, consultant, and in high level jobs with General Electric:
Produce and display videos of credible end users testifying to the product’s excellence.
Produce reference letters, telephone affirmations and testimonials, preferably from individuals the buyer knows and respects.
Display processed purchase orders that are nonconflicting or not invasive of privacy.Arrange for prospects to visit satisfied customers.
When contacted by the purchasing agent, with your own technical people assisting you, get to the users and engineers; cash in on their influence.
Don’t talk price at the outset. Lay out steps that will take time and help to postpone this discussion. Don’t negotiate at the prospect’s place of business if you can help it; get him to your office or a restaurant.
In the negotiating stage, find out how many of the prospect’s people will be present and bring in as many of your own people if you can.
The more you know about the competition, the better armed you will be to compete. Mitchell stresses the importance of learning as much as you can about the competition and what it has to offer. Finally, he concludes, when the importance of the business warrants it, get senior management involved in the proposal, presentation and negotiation.
John Mitchell, president of Mitchell Selling Dynamics Inc., which specializes in sales training and database development, is the author of Inside Sales Excellence and Sales Force Automation.
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