Jan. 1, 2005
Customers hit hard by the economy over the last few years may still be looking for ways they can to cut costs, which makes it a good time for a refresher

Customers hit hard by the economy over the last few years may still be looking for ways they can to cut costs, which makes it a good time for a refresher on dealing with price objections.

  • Know your customer

    The first step in winning the battle over price is knowing your customer's business well, how they operate and the market in which they compete. This allows you to see where you can help the customer be more competitive and the areas beyond price that individuals within the customer's company see as valuable.

  • Lay solid groundwork

    Use every opportunity to focus a customer's attention on the value your distributorship provides. Schedule quarterly meetings with customers to share information on suppliers, obtain feedback from the customer regarding needs and your company's performance, and gain insights on ways to make purchasing more efficient. This reinforces your partner-like relationship to a customer's business and differentiates you from competitors by placing the focus on the value of the relationship rather than just on price.

  • Be flexible

    When the price objection comes up, avoid making assumptions about the motives behind it. You may feel instinctively from previous conversations that you know where the pain lies, but making this assumption can lead to spending a lot of time and effort countering a problem that isn't there. It's better to just ask.


Customers don't base their purchase decisions solely on the “objective” criteria of product and price. If they did, each market would be dominated by the distributor that offered the lowest price. That rarely happens — at least not for long. Other factors come into play:

  • Product quality
  • Delivery
  • Product availability
  • Technical assistance
  • Service response
  • Advertising and promotion
  • Financing and terms
  • Personal service and follow-up
  • Training
  • Past experience
  • Relationships

It's the salesperson's job to kindly remind and subtly sell customers on these strengths. Sure, price is always a major concern for a competent buyer. You occasionally may need to make price concessions to deal with competitive situations, but when salespeople allow a customer to focus solely on price, they've failed in their jobs.


  1. The customer doesn't have the money.

    Solution: It's possible to help the customer “find” the money. If you've done your homework, you might have noticed something he is paying too much for elsewhere, or a product he's buying that has more capabilities than he needs.

  2. The customer believes the product can be obtained cheaper from your competitor.

    Solution: Find out as much as you can about the pricing and services the competitor offers. Remind the customer of the relative merits of your product and why it may be a more effective solution to his problem. Follow that with the service advantages your company offers. Don't try to justify the whole price of your product. Concentrate on the difference in price and offer sufficient evidence to justify that difference.

  3. The customer simply must win concessions in any negotiation.

    Solution: If the customer absolutely must win, help him find a way to win and still pay your price for the product. This can often be done using the soft-cost savings. Making him a hero to his boss, by giving him a way to save the company much more in transaction costs than it could save by whittling down the price, is a win for everybody involved.


A quick quiz to gauge your company's performance

Get out your pencil and check off the practices your company presently uses. Give yourself one point for each check. No points for “planning to someday,” but if your company is currently developing one of these strategies, give yourself half a point. Add up your score when finished and gauge your company's performance. You'll see the areas that need improvement.


  1. Know your customers. Look for ways to help individual customers be more competitive.

  2. Provide customers with new-product information.

  3. Offer customers lines of credit.

  4. Train customers on new products.

  5. Call on customers at their convenience in their place of business.

  6. Offer customers advice or assistance regarding the bookkeeping side of their businesses.

  7. Help customers solve problems and troubleshoot.

  8. Provide customers “report cards” so they can grade your company on various aspects of your service.

  9. Take customers as your guests to local electrical shows so they can learn about new products on the market.

  10. Organize counter days, in-house training or trade shows so customers can meet with manufacturers.

  11. To help key customers save on the time commitment and travel cost of attending trade shows, organize trade fairs at customer locations with some of your suppliers.

  12. Give third-party recommendations on products you sell.

  13. Offer customers who use you as their main source of electrical supplies special incentives such as extended dating and payment terms, special delivery, training, etc.


    Offer customers a single source of supply for hundreds of manufacturers.

  15. Have the right inventory in stock at the right time.

  16. If for some reason you don't have the requested item, offer substitutions.

  17. Deliver products to the job site or plant.

  18. Make emergency deliveries.

  19. Coordinate just-in-time deliveries to manufacturing plants.


    Know the National Electrical Code changes and be able to help customers learn about its impact on product features and applications.

  21. Have a 24-hour hot line.

  22. Know local building codes and practices.

  23. Provide printed product information, catalogs and technical bulletins.

  24. Demonstrate products.

  25. Employ capable in-house salespeople to handle questions, expediting and repeat orders.

  26. Employ product specialists to answers technical questions and help meet your customers' needs.

  27. Bring manufacturers' reps or field salespeople to customer job sites to help with product-related problems.

  28. Expedite orders for big projects by staging deliveries, and managing extraordinary supply needs.

  29. Put together a “system” or package of products that work together.

  30. “Kit” products for manufacturing plants that need a certain group of electrical or electronic components to be built into the products they produce.

  31. Identify material and its sources.

  32. Do take-offs for customers.

  33. Make detailed quotations for customers' project bids.

  34. Source hard-to-find products for customers.

  35. Save customers shopping time by stocking nonelectrical job-site supplies such as water coolers, ladders, foul-weather gear, maps, shovels, etc.

  36. Offer a tool rental program for more expensive power equipment such as power benders and generators.

  37. Provide industrial plants with full-time, on-site tool-crib stocking.

  38. Work with distributors of other construction and industrial supplies to provide customers with a one-stop source of supply for MRO-oriented products.

  39. Provide key customers with demonstration models of tools or samples of new supplies so they can evaluate the products under job-site conditions.


    Be a dependable local source of supply.

  41. Provide accurate, timely pricing information.

  42. Conduct business in an ethical, professional manner.

  43. Be open on Saturdays.

  44. Accept credit cards to help out smaller customers.

  45. Accept returns on unused or defective products.

  46. Stand behind the products you sell.


    Provide accurate computerized information for customers.

  48. Offer customers e-mail as an option to send in orders, request information, etc.

  49. Take orders through Electronic Data Interchange (EDI) to cut down on paperwork errors.

  50. Maintain a Web site offering 24-hour access to product information, order status, company services, etc.

  51. Help key customers build their own Web sites.

  52. What other value-added service does your company offer?

  53. List them and give yourself a point for each.


A score of 29 or less

Some competitors have gotten a jump on you in molding their companies into professional marketing organizations. It's time to sit down with your people and take a hard look at what it will take to catch up.

A score of 30 to 39

You are on your way, but there's room for improvement. Get your company to the next level, and then start working on those 50 new ideas.

A score of 40 or more

Your company is leading the way. Don't stop now, though. Work with employees to come up with 50 more ideas.