Avoiding competitor price wars during economic downturn

In economic downturns more than ever we get the question Your competition offers a discount What can you do?

I can remember a particular case when I was selling a totally revolutionary cabling system for a newly built hospital and after a year’s sales cycle, I had finally my last meeting with the Decision Maker. He presented a fax from the competitor, which basically stated that they would provide a 30% discount on their offered price. He asked me what I could do.

In this case, the hospital had contracted a third party for an unbiased advise and I learned that they had strongly recommended our system because we could deliver a much more flexible solution than our competitor. This feature was regarded as a must have for the newly built hospital. I therefore decided to stick to my price and after a few minute’s silence the decision maker told me that he wanted to go ahead with us.

In a totally different scenario I had to deal with a similar question: your competitor is offering us an 10% discount. What can you do?

This time I was selling a large number of PC’s, which were a real commodity item at the time. I decided to give away some additional discount but no further than my limit. Again, I won this order.

So, what is the lesson learned? Well, I think it is about knowing your value and USP’s and if they are strong enough, they are worth you sticking to your price but if not, then I think you need to move within your limits.