Your Competitor Is Cheaper. Does That Mean You’re Going to Lose the Deal?

You learn that your competitor's price is lower. It's easy to jump immediately to the conclusion that you need to lower yours.

Maybe you do. But knowing that your competitor is cheaper isn't the same as knowing that price will decide the Opportunity.

Before changing the economics of the deal, understand how the buyer is actually comparing the alternatives.

How important is the price difference to this buyer?

Price matters, but buyers don't necessarily evaluate a business purchase on price alone. Depending on the Opportunity, other considerations might include:

The important question isn't simply whether your competitor costs less. It's how this buyer values the differences between the choices available to them.

Are the alternatives really equivalent?

Two proposals can look similar without delivering the same value.

Where are you stronger? Where is the competitor stronger? Which of those differences matter to the buyer—and to whom inside the buyer's organization?

You may discover that the price difference is extremely important. Or you may find that you've given it more importance than the buyer has.

Either answer is more useful than assuming.

Look for value before automatically cutting price

Price isn't the only part of an offer you can change. There may be something the buyer values highly that requires relatively little additional money or effort for you to provide.

Depending on what you sell, that might involve additional support, training, access to expertise, onboarding assistance, greater flexibility or another service enhancement.

The specifics aren't the point. The principle is:

Look for value that matters more to the buyer than it costs you to provide.

Then make the commercial decision. You may choose to hold your position, add value, change the package, negotiate different terms, adjust the economics or walk away. There isn't one correct answer for every Opportunity.

Sales Blueprint Architect can help you examine what the cheaper competitor actually means in this deal before you decide how to respond.