As salespeople, we know one way our sales motivation can hit a slump is if we start thinking a customer may leave us for a competitor. That’s why I did the post Will Your Customers Leave You If You Raise Prices: 8 1/2 Questions to Ask Yourself.
I’ll spend the next several weeks digging into each of those questions. Here’s number 1:
1. How do you know they have even started the process of finding an alternative source?
It’s far too easy for a buyer, purchasing agent or anyone else to throw out the quick comment about how they’re going to find a different supplier because you walked in and told them their prices were going up.
Before you begin to panic, ask yourself, “Who else could they buy from?” Does the other vendor even have a relationship with the customer? If you’re in a B2B environment, it might take a customer 3-4 months just to get a new vendor set up, due to all of the qualifying steps a new vendor has to go through.
You might be reading this and you sell a commodity where you know the customer has a number of very good sources they could turn to.
Yes, they could turn to them, but will they?
Does the buyer feel it’s worth his or her time to make the switch? I’ve had buyers tell me it’s not unusual for the salesperson who they threaten to “leave” to then suddenly lower the price based merely on the threat from the buyer. What is troubling to me is these buyers say the vast majority of the time they had no intention of changing suppliers due to any number of reasons, but they felt by threatening they’d get the price increase cancelled or at least postponed.
And oftentimes they are right! It is an effective tactic to threaten to leave and go to a competitor.
When you hear a customer say they are going to quit buying from you, the best thing you can do is nothing!
And most of all, don’t say how you will lower price. (If you think about it, there is a bit of irony in that anyway… that you would actually lower your price after you just said you were going to raise it!)
All it takes is one false move on your part and you’ll never be able to recover. You’ll end up giving a lower price and the profit associated with it will never be made up. It’s lost. Forever.
So, the next time a customer says they may leave you for a competitor, remain calm and realize that it’s highly likely they are bluffing.
Copyright 2011, Mark Hunter “The Sales Hunter.” Sales Motivation Blog.