B2B Street Fighting Blog

How often do you hear, "I can get the same thing cheaper"

Posted by Marie Dudek Brown on Wed, Apr 03, 2013 @ 04:33 PM

How often do you hear "I can get the same thing cheaper"Chances are your buyer cannot get the "same thing" cheaper. In virtually every business negotiation where there are professional buyers on one side of the deal and professional sellers on the other, the business solution being negotiated has virtually no chance of being "the same" as what your competitor is offering.

Buyers say these things because the selling world has trained them well - i.e., they work - but not because the tactics are based on fact.  If two providers were offering the same thing, then why not always use the web and / or reverse auctions and both parties could obtain higher margins by eliminating the people representing the buy and sell side?

Let's take a look at a question we need to collect data on to help us break away from the "same thing" trap:  "What are the consequences in the event an agreement is not reached?"

This question forces us to think through our customer's alternatives and the consequences if they were to choose their alternative over us.  Let's assume their alternative is our closest competitor. What most sellers fall prey to is the (mostly false) perception that what they are selling is exactly what their competitor is offering.

This is easy to believe, since the focus is often on the most visible component: the product itself.  For example, let's think of "stents," the medical device that surgeons use to clear heart blockages.  Before the advent of drug-coated stents, virtually every manufacturer of stents produced the same thing.  In this instance, the buyers were well-served to suggest that "your competitor has exactly the same stent as yours and is priced lower."

But times have changed. Let's start with the "exactly the same stent" analysis. On face value, the stent is the same. However, when you dig into the value proposition of Firm A vs. Firm B and get a sense of all the other solutions and services they each provide to the hospital or GPO - for example, corporate stability, availability of supply, the technology that might be supporting the relationship, new product pipelines, educational training, etc. - the "decision" for the buyer begins to get more complex when comparing all the variables.

Likewise, it may be true that one aspect of our value proposition could be commoditized or seen as "exactly like your competitor," although it is the sum of your overall value proposition that differentiates you - and that is our focus here. (If your value proposition does not differentiate you, your problem is not in negotiation; it's a larger business strategy issue.)

So, knowing that it's in the best interest of buyers to attempt to commoditize our offering, what do we do?  Well, let's remember that precendents have long been set and true commodities do exist; t-bills or pork bellies, as examples, point to price as the only differentiator. So it takes a long time to reverse those prescedents and change the conversation.  And that's where practice and patience come in.

Would you like to see an example of putting this to work? Request our white paper on anticipating and preparing for the dreaded "I can get the same thing cheaper" statement.

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Tags: business negotiations

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The B2B Street Fighting blog brings you the latest on what's happening in the real world of business negotiation.

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