How To Defend Against a Lower Price

Let's suppose that your product is virtually identical to that of your main competitor. Your competitor drops his price. There's no way to match his price without losing money. How do you keep your price high, and still compete?

The typical approach in this situation is to emphasize a feature that the competitor's product doesn't possess and make that feature a "must have" that will command a premium price (e.g. the iPhones's ease of use.) But we've already said that the two products are virtually identical

So, are you stuck with losing the business? Not at all. There are five other differentiators that you can put into play which will keep the customer buying from you at a higher price. They are:

1. Convenience. If your product is easier to purchase than the competition's, the customer may pay more for it.
2. Tradition. If purchasing your product is a well-established habit, the customer may pay more for it, at least for a while.
3. Perceived Quality. If your product is perceived to be better made, the customer may pay more for it (even if in fact it is identical).
4. Your Personality. If the customer personally likes you, the customer may be willing to pay more to keep you "on retainer."
5. Mutuality. If you are involved in a partnership with the customer that's crucial to his business, he may pay more for your product.

Personally, I think that "convenience" is the one that's the most powerful (and the most commonly neglected by sales professionals). In today's insanely busy world, just making things easier for people is a sure-fire way to keep them happy, and buying.

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