Paul tackles a common challenge salespeople face — How to compete with low-cost providers. Paul also taps into the implications of discounting.  *** Our show is updated weekly with the questions you ask. So, please, go to the home page, subscribe, share it with your friends, but most importantly, ask the question that you want answered.  The Q and A Sales Podcast is edited by The Creative Impostor Studios. http://www.theqandasalespodcast.com Thank you for tuning in. Make it a big day. Transcript How can I compete against low-cost providers? A few weeks ago, I was in a presentation, and during the break, a salesperson said, “I’ve got one of my long-standing customers who is now starting to question price.” He continued, “I have this one competitor who is offering cheap prices, across the board, to try to buy the business.” I know this is a common challenge that salespeople are facing. Let’s unpack this challenge a little bit. If you have a low-cost provider that is out there promising cheap prices, it really can screw up the market. Your existing customers that are familiar with your value added, see a lower price and compare that price to what they’re currently paying. That creates what we call an equity gap. They start to question the fairness of what you’re charging them for the value they receive. As they’re questioning it, they’re starting to become more open to this other alternative. This creates an equity gap that can frustrate customers. It certainly frustrates salespeople. How can I compete against low-cost providers? The first thing to do is take a look at this competitor. Do a basic SWOT analysis; try to understand them; try to figure out where they are vulnerable, or where they are weak. When you analyze cheaper competitors, you’re usually able to find one or two things that are a weakness that also can draw attention to a strength that you have. For example, I remember a group we did some work with a couple years ago. They were selling in industrial distribution, and they had a company that was promising cheap prices. After they analyzed this particular competitor, they noticed that thee salespeople were not very knowledgeable. In fact, they didn’t bring any real value. Now, when they’re going out there competing against this low-cost provider, they’re asking questions that call attention to this competitor’s weakness. For example, when the customer says to them “I can get this cheaper over at XYZ Distributor,” they say, “I know there’s a difference in the price, but what about the experience of their sales team? Are they able to come in and solve problems? Are they able to bring some experience to help you become more profitable?” They’re calling attention to that competitor’s weakness. When you’re dealing with a low-cost provider that gives stupid-low prices, use a framing technique—we call it the boomerang or casting a little bit of doubt. I’ll give you an example. A couple of years ago, I was interested in getting Lasik eye surgery, and I went to go meet with a reputable doctor. We talked about it; he asked a lot of questions, and he explained the whole process and even shared with me the kind of equipment he’s using. And then he gave me his price. The price at the time was about $5,000. I explained, “That’s quite an investment. I’m going to do a little more research.” I remember seeing billboards, and I heard a radio ad for this other doctor who was offering Lasik eye surgery. It was right by my house, so I decided to stop in. Now, it was a completely different experience going to the other doctor. As soon as I got in there, it felt like they were pulling out all the old used-car techniques. They were trying to schedule me in to get the surgery before I even had discussed with the doctor what I wanted to accomplish. Finally, I said, “Before I get surgery, I want to talk to the doctor.” I talked to him, and he asked me a couple of questions, but then he said, “I just had a cancellation nex