Underbid by a Competitor? Here's What to Do.

“I got another estimate from your competition that is 20% less, can you match their price?”

Ugh.

The least favorite response you can get from a prospect, eh?

How do you handle it?

You have payroll that is due.

You have a bill that needs paid at your supplier.

And you need the work…

But… it’s in this moment that your profits hang in the balance.

You could accept the offer, and get an immediate boost to cash with that down payment.

…and then feel the pain of even larger lack of cash again in a few short weeks or months.

Or you could stand your ground, and…

…and what?

Walk away from the job?

Not yet.

My favorite response in this situation is:

“Interesting, I’m curious though, why are you still talking to me? Why haven’t you hired them yet?”

And then shut up.

There’s always a reason… else they wouldn’t be talking to you in that moment.

The point is not to be arrogant, (that won’t do you any favors.)

The point is to be genuinely curious, with the mindset to serve your prospect like you’d serve your grandmother.

You might still not win the job, as you might be talking to a prospect that will go with the lowest proposal regardless of the consequences to them as the buyer.

But there’s a pretty good chance you can win this.

In answer to your “why haven’t you hired them yet?” question, you might get various responses like:

“We liked your proposal better.”

“We felt like you understood what we wanted better.”

“The other contractor seems to be less experienced.”

“The other contractor didn’t have many google reviews.”

The list goes on.

But the idea is: whatever they say next after you ask that question is their real concern, and your real opportunity to win the job.

Additionally, let me just gently remind you that lowering the price without lowering the scope of work is the recipe to going out of business.

Plus, statistics show that it’s not the lowest price that wins jobs anyway.

What is?

A study on 1.3 million proposals showed that the highest indication of who was going to win the job was who had the first proposal back to the client.

If it’s taking you weeks to get a proposal back, it’s not the price that is losing you work, it is your proposal turnaround time.

So redirect your energy away from trying to be the cheapest, and direct it to being the easiest to do business with.

Use templates and production rates to turn your proposal turnaround time into a task that takes minutes, not hours.

In fact, get them the proposal before you even leave the driveway on the consultation.

Additionally, focus on adding value.

What can you do that your competitors are not willing to do?

What can you do to elevate an incredible client experience?

Your investment into these types of pursuits will take your business far further than any price cutting to win the job ever will.

If this “your competitor is cheaper” problem plagues you incessantly, you might just be talking to the wrong prospects, meaning you have a targeting and marketing problem.

To solve that problem you need to focus on your lead vetting and qualifying process.

I did a webinar that shows the lead qualifying process we used at Tussey Landscaping, a $6m+ design/build firm in rural PA.

The 4 things I talked about in that webinar dramatically improved our sales process and close rate.

And it’s nothing magic, just hard earned lessons and solutions from years of trial and error in the real world.

Give it a watch.

Cheers!

Weston Zimmerman

SynkedUP CEO and founder