“But your competitor gave us a better quote.” How do you reply?
Overcoming competitor pricing objection
One of the deadliest objections you might face is the competitor’s justified pricing objection. It is difficult to handle because it’s not the classic “it’s too expensive!” This one is grounded on the evidence that a competitor reached out before you and offered a product or service for a better price.
Now, the classic solution to this problem is refocusing the conversation on value. “Yes, but our offer is more valuable.” Does it work?
No, it does not. If the client mentions the price of the competitor, it means that in their mind, pricing has been anchored to their offer. Anchoring bias is a powerful and often subconscious cognitive distortion that can hurt your chances of closing the deal.
In simple terms, information that is presented earlier by a competitor becomes the reference frame and is given more importance than it should in the comparative judgment of potential suppliers. Even if your offer’s value more than compensates for the price premium against the competitor, the client will still think your offer is overpriced when, in fact, it is not.
How do we solve this problem?
First, you acknowledge the anchor. You recognize the better pricing of the competitor and claim that its offer reasonably seems to have better face value. You do it because you want to make the client perceive that their objection is rational and their thinking has been reasonable. This will make it more likely for the buyer to pay attention to your counterargument.
Second, you shift the frame not from price to value, but from price to ROI. In this situation, the ROI argument will be more powerful than a simple value argument. You then help the buyer do the math, and you calculate together the ROI, grounding your argument on explicit and solid evidence. The more numbers and quantitative information you add to your explanation, the less relevant the competitor’s pricing information becomes in the client’s decision-making.
Remember that your role is just to help the client’s decision-making become more rational and avoid the pricing information given by the competitor being given more importance than it should, due to the anchoring bias.
