Race To The Bottom

By: Tom Richard
Submitted: 2007-01-17 15:37:34
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Today is the day your prospect makes the final decision. The research has been done, the bids have been submitted, and the comparisons have been made. This is the moment of truth.

Behind a large desk, your prospect sits with the final two bids spread out before him. As he combs through the proposals, he contemplates which company to choose.

Then it happens. His phone rings. On the other end of the phone is your biggest competitor. “I just wanted to see if there were any questions you had,” he casually announces.

“Well, not particularly. This is a harder decision than I thought it would be,” the prospect responds. “The prices are about the same, the products are really similar, and I think both companies would do a good job with service,” he continues.

“Let me do this,” your competitor chimes in. “I want to go talk to my manager; I think we may be able to sharpen our pencils here,” he says in a fake, contemplative tone.

Your prospect receives a revised bid from your competitor and calls you to inform you that his decision has just gotten a little easier. You sputter and reel, “Well, hold on. Let me make a few phone calls. Can I give you a call right back?”

And so the race to the bottom has begun. As the phone calls between your competitor and yourself continue, the prices keep dropping as the prospect sits in amazement at how fast things can change. The fax machine is humming and the emails are flying as each company continues to sweeten the deal.

However, the truth is bitter. The flurry of last minute price reductions has diminished everything you have worked so hard to establish. You have thrown your reputation, your ability to be trusted, and your integrity under the bus in the false sense that it will help you win the sale. You have left your prospect wondering why these prices weren’t possible weeks ago when you first starting talking with him about the details of the contract. Now, he sits at his desk questioning everything, and it is all your fault.

Your last minute changes are not creating a greater desire for your product; they are creating doubt and indecision. By bringing the validity of your original price into question, you are now bringing the validity of everything into question.

The minute you allowed the conversation to focus completely on price, you admitted to the prospect that, yes, you are exactly like your competition. You have told the prospect that price is the only thing that separates you from your competitor.

In the moment of truth, you need to keep the focus solidly upon the things that you have worked so hard to establish: a strong relationship, reliability, and trust. When you keep the decision focused on these factors, you are giving your competition enough rope to hang themselves.

Take a moment and look back on the last time you participated in a race to the bottom. Chances are you misread the prospect’s cues and assumed he was talking only about price. Maybe he mentioned the price, but that does not mean that he was necessarily going to say no because of it. You were the one who took things in that direction; you were the one who threw away everything you worked so hard to establish.

The next time you find yourself standing in the moment of truth, remain confident in the work you’ve done to get to that point. You obviously did something right, or you wouldn’t have made it to the final day. Let your competitor be the one to wag his tail like a piddling puppy. Stand proudly by your price, your terms, and the solid value you intend on delivering for the customer. It will make you the obvious choice, regardless of price.

Article source: Expert Articles