Same thing cheaper….

If you’re in business then you will have had this conversation with a client at some point during your time. That said, you may well of had this conversation with a supplier at some point but when is the same thing not the same thing?

If you are in business then when it comes to pricing your services/products then the only reasons that someone else would be providing the same thing cheaper are:

  • You’re over-priced – unless you have setup shop overnight then its a given that you are not over-priced for what you offer.
  • Its not the same offering – when it comes to price then chances are that this is the case.

So when it comes down to it, in all likelihood, the client is either playing hardball to get a discount or they do not understand that what you are offering is not the same as what they are looking at.

I had one such conversation today whereby a client informed me that others were offering the same for less. On investigation, I was told that they were being offered the same service for less by another company. The younger business person would have been threatened and looked to “drop the price” but having been running a business now for almost 13 years I took the more mature approach. I simply said that if they were indeed offering the same service for less then they should do what they believe is best for their business. I explained that they were already paying under the industry rate for the service they receive from us. While I value them as a client they must do what is best for their business. Before the conversation began I had already made the decision to stick by our pricing as I am confident in our service offering and charges so there was no need to negotiate and if they were not happy with that a lower priced service is what they should go for (not necessarily what their business needs though). I even offered to look at what they were being offered by the other company to ensure that was like-for-like that was being quoted and would still have given the same advice if it had been.

The Outcome

At the end of the conversation they had to admit that it probably wasn’t the same offering given that the cost was 40% less than they were charging currently and they know how much it costs to hire staff. It also helped that the offer was made to check if they were being offered the same as it was clear that we work for their business and not just to make money out of them. Its a given that we all need to make money but to be that transparent and ethical about it I have always found pays dividends in the long run. They also asked for a quote to replace a couple of PC’s and a wholly personal service that is one of the things that they enjoyed about working with us.

None of this is the fault of the client, or us for that matter, it is a case of them trying to manage their costs and not understanding what they are being offered. It is our role to help them to understand what it is they are getting so that can make an educated decision on what they want to do.

The Golden Rule?

Don’t sell on price…….EVER! There’s always someone cheaper…..ALWAYS, but cheaper isn’t always better.

Rob Written by:

One Comment

  1. April 7, 2016
    Reply

    Rob – love your attitude towards this very common scenario. Too many businesses get beaten down on price through fear. In my experience, sticking to your pricing often results in better customers for you! I wrote about this in my blog post “Does your MSP keep losing business on price?” http://tubb.co/1NbVrZN

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