Recently, a salesperson asked me this question: "Tom, what can I do when my competition tells the customer that my price is too high?" My first response was: "Do you believe your price is too high?" He said: "No. I think our prices are just fine." Then, what's the problem?

Of course your competition will tell the customer your price is too high. They'll also lie about your quality, ability to provide service and your alleged lack of follow-up. They may even fabricate stories about your company's financial stability.

The competition doesn't determine your prices, you do. Their opinion is interesting but irrelevant. When your competition does something dumb with their prices, you don't want to compound their mistake with your own.

Who says your price is too high? Your customers? Their opinion is more valuable than the competition's opinion, but customers complain about price. It's what they do as part of the negotiating process. One out of six buyers is a price shopper, which means if you're not losing one out of six deals to price, your prices are too low.

You will lose some business to price. That's okay. Some of that low-margin, high-aggravation business is business you want the competition to have. Price shoppers squeeze you on the front end for a cheaper price, pay you late, and then worry you to death. Selling and servicing price shoppers is like being bitten to death by a duck.

Who says your price is too high? Your existing customers? Not if they pay your prices. When other people — those who do not use your product or services — complain about your product, their opinion is interesting commentary but not gospel. For you to accept their opinion that your prices are too high is like saying all of your existing customers who pay your prices are foolish for doing so. Is that what you think about your existing customers? They pay your prices because they value how you treat them and the products you sell. The value of something is what it's worth to the buyer, not what it costs them.

Existing customers — those who enjoy your quality, service, and reliability — are your best judges of value and equity. If you deal with some pretty smart business people and they are willing to pay your price, take their word for it — you're worth it. Ignore the noise from the rest of the market. It will distract you from your primary mission.

Desperate people do desperate things. Competitors who cannot beat you at value added will try to level the playing field with cheap prices. They are the best judges of the value of what they bring to the table. If they tell customers that they are cheaper, they probably are, but not for the same reasons they want the customer to believe. They are most likely cheaper because they bring less value to the table.