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Dealing with Competitors Cheaper Products (3-minute read)

Recently our delivery driver brought to my attention that one of our top 5 customers had purchased some product from a competitor. This, of course, got my attention so I made a sales call as soon as possible and I discovered that this customer had indeed purchased a skid of brake shoes and a skid of drums from a competitor. Then I got a shock when one of the mechanics told me that they had purchased the product for approximately 50% less on the shoes and 20% less on the drums than what I had been selling our products for.

My first reaction was panic!

A swirl of questions ran through my mind:

  • If this product is comparable in quality we are in big trouble and at risk of losing all our brake business, what will we do if that is the case?
  • What had we done to lose their business?
  • Had I failed to service the customer properly?
  • Did our service level drop and I hadn’t noticed?
  • Is the sales person who sold them this product better than me?

I’m a sales professional so I did my best to not let my initial reaction show and I calmly asked a few questions about the new products they had purchased. Additionally, I asked if I could take a look at the brake shoes. I found the code printed on the side, made a mental note and I thanked the customer for their business and left.

When I got back to my truck and out of the customer’s view I pulled over and did some research into this competitor’s brake lining. Then I called our manufacturer to discuss the differences in quality between the products I had sold them and the product the customer had purchased.

One fear was immediately put to bed, the product they had purchased was not even close in quality to the product we had been selling them.

This, of course, still left me with the question:

Why had the customer purchased such a dramatically less quality product?

In a subsequent meeting with the customer, I discovered that they had a specific highway application that did not require the higher quality brakes that I had been selling them and they decided to test this alternative product because it was so much cheaper and should reasonably do the job they need it to do.

At least the customer had thought this through and had a legitimate reason for trying a cheaper and lesser quality product.

This still left me with a few unanswered questions:

What had we done to lose their business, had I failed to service the customer properly, and did our service level drop and I hadn’t noticed?

After asking a few more well-placed questions I discovered that our customer was indeed unhappy about a few things. We discussed their concerns at length and took necessary action to correct the issues that had been brought forward by the customer. After addressing those issues I then asked the customer if I could submit our prices on a comparable product, at a comparable price for the specific application that did not require the higher quality brakes. The customer agreed and after comparing our product to the competitor’s product the customer agreed that the quality of our product exceeded the competitions and we would be awarded the next order.

In the end, I was able to win the business back and in the process, we uncovered a few unrelated product and service issues that I was able to quickly address.

This still left me with one unanswered question:

Was the competitor’s salesperson better than me?

I give full credit where it is due, this salesperson took advantage of an opportunity that we created. The customer typically would not have given a competitor the opportunity to “get their foot in the door” as it were but we opened the door with a drop in customer service. Now, in the end, I was able to take appropriate action and get the business back but it never should have happened in the first place.

This teaches a vital lesson to all sales professionals and entrepreneurs alike.

Never take your customers for granted, because your competition is waiting for an opportunity to take them away from you. – Jamie Irvine

As a sales professional, it is imperative that you keep measuring your own performance with your customers, reviewing their accounts, and asking them well-placed questions to uncover any issues long before those unresolved issues leads to the customer looking to a competitor for a solution.

Price will continue to be an issue but as any sales professional knows a price objection typically is just a symptom of a larger issue and can be a sign post that will lead you to the sale. I hope my story gives you some insights into what to do when confronted by a dramatically reduced competitors price.

Let’s review:

  1. Don’t panic, ask questions about the competitor’s products and take careful note of exactly what the competitive product is and what it is not.
  2. Do your research and enlist help from manufacturers, suppliers, and your company.
  3. Be proactive and meet with the customer to discuss why they have purchased this cheaper competitive product. Don’t assume anything.
  4. Go deeper and make sure you uncover any issues the customer has unrelated to the most recent purchase.
  5. Resolve those issues immediately.
  6. Ask the customer to give you a chance to present a competitive product that is both comparable in quality and price.
  7. Ask for the business.
  8. Internally do a review of what lead up to this and then visit all of your other top customers to ensure that there are not similar unresolved issues.
  9. If you follow these steps and you still lose the business don’t take it personally, you have done all you can and you are conducting yourself like a professional. Get back on your horse and earn your customers business back. Be the better sales professional and win the war despite losing a few battles along the way.

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Author: Jamie Irvine

Jamie Irvine is the host of The Heavy-Duty Parts Report and a sales consultant that works with manufacturers, distributors, and SaaS companies serving the heavy-duty truck parts industry.

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One Reply to “Dealing with Competitors Cheaper Products (3-minute read)”

  1. Good job Jamie! It’s always a good idea to ask those questions, at the very least you’ll strengthen your company, and even win back the sale.

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