Beware the price war: How to win the fight by stepping out of the ring

You've got a prospect on the phone, and he loves your product. He loves your team, your service, and you think he's ready to move the sale forward. You're about to close the deal when he throws down some new information:

He's been talking to your competitor, and they're cheaper.

He swears up and down that it's just this one thing, just this price issue keeping him from signing on to you. He says things like,

 "If only you guys could undercut these other guys on price, then I'd be on board."


Your prospect has just invited you to a price war, and it's a battle you're not going to win.

Unless you’re looking at your competitor's margin as an opportunity – using a business strategy like Amazon’s, for example – you are not going to win a price war. If selling a high quantity at a low price is your business strategy, then this isn't the article for you. In fact, if you're executing on a commodity business model, you've got to win that price war every day. That's a tough racket, so good luck and all kinds of kudos for you! But…

Price war negotiations

… if you're providing a premium service, a top-of-the-line solution, price negotiations are not even the battles that you want to win.

This is not about the price.

At least, you're not going to let it be about the price.

Your first order of business is moving your customer away from money as a topic that affects you. You want to get your prospect thinking about your service again, about the kind of progress they can expect by signing on with you.

You want them to remember the awesome kind of people or results they'll be dealing with if they deal with you.

Friends don’t let friends get sucked into price wars. They do this instead:

You don't do that by listing all your features and benefits for the umpteenth time. You do that by showing them that you're willing to go the extra mile for them starting right now."

Let's pretend money isn't even an issue. Price aside, totally out of the question, do I provide you with a better product? If I don't – if the other guys are on the same level – then I want you to go with them.In fact, I'll help you get an even better price with them, if the price is your primary concern.

By offering to help them sign with the cheapest service, you're showing your prospect that price is already irrelevant to you.

Bonus: The more you repeat phrases like “price is your primary concern,” “price is the only issue,” or “the cheapest price is what you’re after,” the more hesitant they’ll be to agree with those statements … which moves price even further out of the picture.

Price is irrelevant

It breaks down like this:

1. Offer to email your prospect a fake, lower-priced deal. Urge them to use it in their negotiations with the other guy.

2. Stress that you're on their side, and you want to make sure that they get the best price. After all, they just told you that the offerings are the same, so price must be their top priority.

3. Align yourself with the superior service by being the tool they need. Provide leverage that they didn't expect in their negotiations with your competitor.

4. WIN. Because if they take you up on that offer, you weren't selling to your ideal customer in the first place.


5. WIN. Because now they remember that you are the premier service, and you’re in a position to charge them a premier price.

If it IS about the price, you want that prospect to be someone else's customer.

Hey, not everyone can afford the best solution for their needs. If that's the case with your prospect, feel free to let them know that you're happy to let them go. Sometimes a would-be customer just can’t afford you, and will have to make do with less, and you should tell them you're comfortable with that (as long as they are).

"Listen, we're never going to be the cheapest solution. We're out here to provide the best solution, the enormous amount of value. If what you need is the lowest price, instead of the biggest value, I want you to be his customer."

Maybe they used to think that you offered a similar solution for your customer. But now your generosity got the gears in your prospect's head turning.

Now the last thing they want to to go with some other guy, some inferior team.

When you've got a premium product, let the other guys hassle on price. Here's how: 

You've shown that you offer greater value than that other guy. You're proving that you're a better partner before the prospect has even signed a deal with you. And right about now, they're realizing that doing business with you offers a significant advantage. They'll say something like, 

"Oh, you know, I do like you guys. I love you guys. I think you guys are the best. So if you could work with me on this whole price thing …"

You can see where he's going with this now, right? He's figured out that you're the guys he wants on his side, and he's hoping he can use the teamwork angle to his advantage, now.

hagglers gonna haggle

You're still not going to budge, and here's why:

You don’t want to strip your value for the sake of a deal.

You don't provide this kind of value in a vacuum. If your prospect agrees that your solution is comprehensive, that your team is effective, that you're offering the best product in the market for what your prospect is trying to accomplish, then he has to agree that it is worth more.

That could be a hard pill to swallow. It may take a few emails back and forth or a few uncomfortable conversations before he gets it.

A few things to keep in mind if the going gets rough:

  • Point out that every other customer you have pays a fair price for this amount of value, for a partnership. How can he expect you to let those customers down, to cheapen their experience just to cut a deal with him?
  • Remember that you're not standing on a street corner talking about how much a piece of fruit is worth today. The market has already decided that the price you charge is reasonable. Intelligent, successful people agree to pay this price every day.
  • Emphasize that neither of you is in this nickel-and-diming business. If he wants the cheapest solution, you'll help him get it. If he wants the best solution, you're right there willing to provide it.

Will this price war strategy help you close more deals?

Maybe, and maybe not. Maybe you're uncomfortable saying that you're a best-in-class provider, or you don't think that you can justify your price. In that case, you might want to rethink how you’ve priced your service.

But if you know that your solution will help your prospect achieve his business goals – and you can prove that by looking at your current users – then this price war strategy is the way to go.

The kind of customer that you want to build a prosperous, long-term partnership with recognizes your value to his business.

Hagglers always find a cheaper product. Don't be that product. Here’s how to get out of the price war:

Go above and beyond to outline how your product can help your prospect succeed. Show him that you’re a better partner with a great team and an awesome service.

And if your prospect still cannot see the advantage that you want to provide for them at a reasonable price? Go ahead and help them buy a cheap, flat service.

You've got better deals to make.