Regular client asks you to match competitor

[cocoy]

Ever had a regular client asks you to match a competitor's price. Would you if it was still profitable? Or do you stand firm and let them go.

I had a conversation with someone who said, "I'm loyal, so I'll ask if my regular vendor can lower the price to match first. If not, then I'll switch."

I guess overall profit trumps loyalty. If that's a definition of loyalty. :)

It's a business, so I understand if they go with the lower priced vendor who can provide the same product.

[Dan F]

I'm still new to business, but most probably you're offering something better than your competitors... at least that's what I do and try to spread the world about it. If this is the case, I hope :), tell your client what you actually do BETTER than your competitor hence the price ;)

I'm not sure if it's a good idea to give him a discount this time only... will have to wait for the experienced for the advice.

[Evan]

No, I wouldn't match their price. Though many are price cognizant though, and driven by the cheapest.

Let's say you're looking for a big bag of M&Ms. You could go to the grocery store and pay a premium. Most convenience stores (CVS, WalGreens, etc.) also charge a premium, but may have it slightly cheaper. You could get it at an office supply store (which is usually more than the grocery store), or from a "big box shop" such as Target or WalMart for real cheap.

Well, sure I can spend $2.99 for a big bag of M&Ms at WalMart, but is it convienent for me to drive there and wait in line for the item? No.

If I'm placing an order for office supplies with Staples or such, it seems quite easier to just add the bag of M&Ms then because while it's not the cheapest, it is most convienent.

Bottom line: Your paying for the customer experience, the preceived value, and the overall delivery. Take it, or leave it.

[Spider]

It's going to depend on the industry you are in. If you are selling high end ladies fashions, you face a very different set of circumstances than if you are in the construction industry. Medical equipment suppliers will deal with pricing and discounting very differently from a gift shop.

Then consider the level of authority the salesperson has to discount.

Then consider an industry that has a standard acceptance of negotiating prices and one that contracts by competitive tender, where the price quoted is fixed and the lowest bid is generally accepted as a matter of form.

Clearly, there is no standard answer to this question.

[rezzy]

I would say, if this losing this sale wont hurt, stand by your pricing model. If you let this customer bend you on price, then whats to say they wont request further price cuts. The business sets the price and not the customer.

There are instances where adjusting the rate for a client may be favorable, but to me, these are far and few between. I say that, but there are times when I offer clients reduced price or extras, however I offer them because I truly care about them or their business success, not because they threatened me with losing their business.

[orion_joel]

I have experienced this, it is not nice to see a big client, calling and asking if you can match a price. What is worst is having a very big client, call and ask you to match the biggest discounter in town.

What in my opinion it comes down to is that if you want to stay in business you need to think of this in a dollar perspective and not a customer service one. Some people say it is good customer service to keep the customer happy even if it means losing some dollars right now. But this is often for smaller business anyway the way to lose.

For me in IT i have a price structure which supports me giving good customer service, if there is a problem i can afford the time to solve it for the customer. However the big computer discounters, have price structure, that means after sales customer service is not going to really be there. Just one example, I might sell a Laser printer for $500, where these discount stores might cut that price to $400 or even less. When it comes to the printer not working this discount store will give the customer the phone number for support and forget it. Where as I can afford the time to either have a look at it myself, or make the call for support for the customer.

So really end of the day i see cutting the price, is the best way to lead towards having to cut your level of service. Which for many small businesses is the biggest differentiating factor.

[vangogh]

Perhaps in a rare circumstance I would match the price, but that would be very rare. I charge what I charge and clients can pay it or find someone else to do the work. Especially when you're in a service based business no one is really offering exactly what you offer. I offer my clients a very good value for the price I charge. If anything I should be charging most of them more than I do.

What you can say to the client is you'll be happy to match their price as long as you can also match their lower quality and service.

[Vivid Color Zack]

Evan - You have thought pretty hard about this M&M's concept haven't you? lol : )

I will match certain product prices on occasion for certain clients. Usually my web prices are the lowest already, if they aren't I don't like to stray from those. If it's a product I don't have already listed on the site though and a competitor has it for a lower price - assuming the customer has been good with us in the past - I will work with them on price.

I don't like dealing with customers that are going to drag me out every job though. If I've never met them before and I get the feeling they are going to have me price match every single job, it's just going to frustrate me and I just give them a good price and try to assure them that any money saved at other shops is not worth the inconsistencies and the lack of customer service and all of the other great things I provide.

[Business Attorney]

As noted above, I think it is heavily dependent upon the type of goods/services you are selling. It also depends on the circumstances. Are the goods/services you are selling unique or are they a commodity? If they are easily duplicated by someone else, you may have to decide whether you want to make a smaller profit or lose the sale entirely (and future sales, too). If your goods are the same as everyone else but you provide added services, then perhaps you can justify sticking to your price and still make the sale.

[Evan]

Evan - You have thought pretty hard about this M&M's concept haven't you? lol : )

I love M&Ms. But I'm using it as just the concept of a basic item to represent what everyone may "want". It's a matter of how bad you want it, and what you're willing to pay.

Plus who doesn't love chocolate? :cool:

[huggytree]

I had a builder ask me to match a price once...i didnt and still got the job...when we ran into problems i let him know that it was included in my price, but his low bidder would have charged an extra.....

often times you may be offering something more than the low bid....i strongly recommend never lowering your price w/o taking something away.

i hope this isnt your main customer?....if it is your stuck....thats why i prefer to have tons of small customers....let him go then....1/2 of them come back within 6 months...