Prospect Likes My Company But Says My Prices Are Too High

A guy called me up and said he heard good things about my company but he said the price was too much for him.

What should I do?


This is essentially every sales call an integrator goes on, ever.

Usually describing how far beyond the cheap guys you will go in terms of service and workmanship is enough. If it isn't, your price will always be too high.

If you want/need the business, you negotiate. If not, you politely explain why your price is what it is and walk if you cannot agree.

Basically the same answer. Most of the time I leave a little room in for negotiations. I hate to say this but some cultures expect it. I was told once that if I did not negotiate then they would have no respect us. So you have to know who your audience is.

It sounds like you have the job. The most important thing to do is not lose the reputation that you have built by coming in so low you can not make a profit and/or do the work at the same level that your company reputaion has earned.

I tell my sales guys it's a numbers game. You are not going o win every bid.

The other policy I have always lived on in negotiations is that the first one to make an offer loses. Maybe come back and tell him that they are the kind of people that you enjoy doing business with so "what can you live with". If you don't like the number, it's adios.

Undisclosed A,

Was your price too high compared to another company's price on a project or was the price of the project in general too high?

If they like your company then you can do as suggested as above and explain the difference in your products, services and support. If that's not enough you can find out what items the customer is willing to remove in order to meet their budget.

They want you to close them. You just haven't given them justification for your prices. You've sold them well on you, but just haven't justified the price to their comfort level. You can either negotiate the price if you choose to, or sell them harder on why your price is a good value. No shame either way.

Close that deal and get yourself a coffee.

Have you found out what good things specifically the person heard about your company? Do you know what he is trying to accomplish?

Have you attempted to explain how the good things your company does specifically could solve what he is trying to accomplish better, faster and with more value than more than pays for your higher cost?

You are in the room, so you have to make the call, but he likes you because of the quality of your work. That has value. If you have some room to give, give it and close the deal. If not, you can't lose money you never had.

There is an old saying in contracting sales that works with some clients. "You can have it cheap, fast or good. Pick two."

There are a lot of things you can do, but the #1 thing to NOT do is unilaterally lower your price in response to your customer's tactic.

You say the prospect "likes" your company. Ask them why, and get them to focus on those factors and what that value to them might be.

Make sure you are comparing apples to apples. Are the products and services you are proposing on par with the other guy? If they are, then you need to concentrate on the intagibles you bring to the party, such as experience, service, and technical support. I am at the ISC show right now and last night met a manufacturer I was not familiar with. They are doing quite well, so I asked them what was their "special sauce" for being successful in a very crowded sector of the industry. I expected my colleague, an engineer, to tell me about some whiz-bang feature or performance with his product. Instead, he mentioned a ten-year warranty period, advance replacement always without request or charge, and integrators being able to set an appointment with technical support guaranteed to be available when the technician is on site. Dang! I am not an integrator, but if I was, I would be buying this guy's product. We never did get around to discussing the hardware. (He's an IPVM subscriber so let's see if he reads this discussion and gets back to me)

What he has is what you need to develop with your customers rather than sell hardware. This is something customers will pay more for the same thing because who is selling them those things. It sounds like you have accomplished that with this customer, contratulations! I wholeheartedly agree with Jon Dillabaugh (above) that the customer wants you, otherwise they never would have said that to you. They are begging you to close on them and give a reason for choosing their preference. Give that to them, but not by matching price!

However, this may be one of those customers that expects the very most for the very least price they can. Do what you have to do, but I would recommend that you not lower price without some kind of concession from the customer. A longer term service contract, for instance. Or faster payment terms. Something that shows whatever discount you provide is linked to something. Hopefully not, but you might find customers like this to give a wide berth.

As Brian Rhodes (above) said, this is pretty much every integrator sale, ever -- only verbalized.

Ask him why he thinks you are to high? Is he comparing apples to apples? Meaning is there a competative bid that he is comparing you to? Same quality products, layout, workmanship? Too many variables to give a complete answer to this question. First, I would start by asking him why he thinks it's too high.