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  • Writer's pictureSyed Ahmed

Price wars?? After reading this you will never undercut your competition...

8 Strategic ways to counter lower competitor quote

Do you know price wars lead to bad products and degradation of service quality, which in turn leads to unhappy clients. We all want to sell more but in order to retain quality or our services we need to retain quality staff and keep them motivated for that we need profits.

Our focus needs to shift from creating more revenue at all cost to closing profitable deals.

In competitive markets where most of the competition is selling similar products it all comes down to price cuts and no doubt it is the easiest way out for any manager negotiating with a big client.

I suggest rather than the first option, undercutting should be the last, desperate resort. The simplest said, most difficult to do solution is to never get into the desperate mindset and you will always win the negotiation, but for most of us that is a luxury and immense pressure to sell is the normal.

In this article, I would like to share, the repercussion of undercutting and some tips and techniques to overcome competitor-price objections:

Repercussions of undercutting:

  1. Once the price wars begin customers always want a better deal and sometimes may defer their decision for a later time or might go back and forth with both parties to get the best deal.

  2. A price-cutting organisation develops a reputation for being wrongly-priced, and this reputation may cast doubt on the quality and image of other products under the umbrella brand and on the quality of future products.

  3. Price cuts lead to losing brand equity, you become branded as overpriced and a discount giver, its like a clothing brand that has 70% off entire year or called discount shop rather than the brand name

  4. Clients may stop trusting you and your numbers even worse feel cheated

Ways to counter a competitor's offer

  1. Be different from your competition: Spend a good time prospecting and strategizing, do not try to sell your product or services to everybody or at the pre-decided price. Find out what your competition is offering an how. Think about ways you can reduce the cost of production and delivery. What are the different options available with us to help the customer. Sometimes the solution we have but never thought about, is exactly what the customer needs. So if you give a more innovative solution to the client, they wont be able to compare it with the competition, no comparison will lead to no price war or undercutting

  2. Build your brand: From today start sharing wins of your organisation or firm with the prospects and current clients, start showing them how successful you are with your clients, emphasize your quality and benefits for the clients, these can later be used as ice breaker or anchor in pricing negotiations

  3. Choices are better: Create different options for different budgets like multiple-part pricing, quantity discounts, time-of-use pricing, bundling,

  4. Have the power to walk out: Handle the pressure to sell by creating multiple work streams for your workforce, make sure they are not sitting without work. We loose confidence under pressure and may break down even by a weak bluff

  5. Increase the value without increasing the price: Increase the value of your deliverable by adding a low-cost and low-effort addon, this could be an automated solution, a set of templates or even beta version of a future project.

  6. Save the from bad product or service: Alert them of risk about the quality of the service provided by the competitor at such a low price, or they might be cutting corner.

  7. Make the competition look cheap: If the competition is new then create a low cost segment to compete this will not only make your present segment premium but also make the competitor fall into low cost segment automatically

  8. Stick to your price: Think really well before you come up with the price and then create a very strong supporting argument for your pricing and stick to it and the maximum you can move is 10 to 15%, that too after considerations and effort. This is just to make the client feel happy.

Apply these tips and let me know your experience


Syed Ahmed Hussaini

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