Negotiations are an integral part of any sales process, but they often come with challenges that can make or break a deal. One of the most common and effective tactics that buyers use is the “I can get the same thing cheaper.” It’s a simple line, but one that’s frequently used to put pressure on sellers to drop prices or offer discounts. In a recent episode of StreetSmart, Brian Dietmeyer sits down with Carrie Welles, Vice President and co-founder of Think Inc., to discuss why this tactic works, why it’s so dangerous, and how sales professionals and negotiators can combat it effectively.
Why Does "I Can Get the Same Thing Cheaper" Work?
At its core, the statement "I can get the same thing cheaper" plays on a few psychological triggers that most salespeople will recognize:
Fear of Losing the Deal: No one wants to be left behind in a competitive market. This tactic preys on the salesperson's fear that if they don't match the price, they’ll lose the deal entirely.
Perception of Value: It challenges the perception of value that the seller has created. If a potential customer believes they can get the same product or service elsewhere for less, the seller risks losing credibility or appearing overpriced.
Simplicity: It’s a straightforward, no-frills argument. By simplifying the conversation down to price, it pushes the seller into an emotional and tactical corner. A buyer may not be saying it outright, but the message is clear: "Price is the only thing that matters."
Brian explains that this tactic can be particularly effective because it puts the salesperson on the defensive. However, while it may seem like a simple move, it’s also dangerous because of the financial implications it can have for companies that buckle under pressure to reduce prices. In fact, businesses lose millions every year by conceding to this tactic without understanding the broader consequences.
The High Cost of "I Can Get It Cheaper"
One of the biggest problems with caving to this negotiation strategy is that it can often be a race to the bottom. The moment you agree to drop your price, you are not only reducing your margin but potentially setting a precedent for future deals. This can have a long-term negative impact on profitability, not just for that particular sale but for future sales with that customer or others who hear about it.
Additionally, lowering the price without justifying the discount can hurt your brand’s perceived value. It can send the message that your product or service isn’t worth the original price, which can undermine the reputation of your offering and affect your long-term relationships with clients.
Strategies to Combat the “I Can Get It Cheaper” Tactic
So, what can sales professionals and negotiators do when faced with this common line? Brian offers several strategies to counteract this tactic effectively:
Differentiate on Value, Not Price: When a buyer says, "I can get it cheaper," shift the conversation back to the unique value that you bring to the table. Talk about the quality, the experience, the support, or any other aspect of your offer that makes it more valuable than just the raw product or service itself. Show the buyer why the total cost of ownership is a better deal in the long run.
Ask Questions: Instead of simply defending your price, dig deeper into the buyer’s objections. Ask questions like, “What is it about the other offer that is appealing?” or “What kind of support are you getting with that cheaper option?” This allows you to uncover potential weaknesses in the competitor’s offer and highlight the strengths of yours.
Don’t Just Drop the Price: If the buyer continues to press on price, resist the urge to simply lower it. Instead, consider offering additional value that aligns with the buyer’s needs. This could be through bonuses, added services, or extended support, all of which can increase the perceived value without reducing the price.
Use Social Proof: Share testimonials, case studies, or examples of how your product or service has positively impacted other customers. This will help reinforce the idea that your price is justified and that other customers are willing to pay for the value you provide.
Know Your Bottom Line: It’s critical to understand your own bottom line before entering a negotiation. What’s the lowest price you’re willing to go? Knowing this will help you stay firm and avoid unnecessary discounts, ensuring you maintain profitability.
Stay Confident: Confidence in your product and its value will resonate with buyers. If you can calmly and clearly explain why your offer is worth the price, buyers will be more likely to accept your terms.
Conclusion
The “I can get the same thing cheaper” tactic is a classic negotiation strategy, but it doesn’t have to result in giving up profits or reducing the value of your offer. By shifting the conversation to the value you provide, asking the right questions, and staying firm in your pricing, you can avoid falling into the trap of unnecessary discounts.
For sales professionals and negotiators looking to protect their deals and maintain the integrity of their pricing, these strategies are key to navigating this common and often dangerous tactic.
Be sure to check out this insightful episode of StreetSmart with Brian Dietmeyer and Carrie Welles, where they dive deeper into this negotiation challenge and offer even more valuable advice for tackling tough negotiations head-on.
StreetSmart episode: https://closemode.media/episode/streetsmart-negotiation-problem-2-price-pressure-k9vh
