Predatory price buyers
They're out there, and you've got to fight them with everything you've got
By Tom Reilly -- Industrial Distribution, 5/1/2003
We've all heard the references to predatory sales practices, but why don't we ever hear about predatory price buyers? They're out there, and everyone knows at least one. A predatory price buyer is someone who uses whatever it takes – fair or not – to squeeze the last bit of profit out of their supplier's deal.
That's okay if the buyer is purchasing from a non-profit organization, but how many salespeople work for non-profits?
Here's how to recognize predatory price buyers. First, they wring you out and they string you out. They work you over on the front end for the absolute cheapest price, and then pay you late. Second, they worry you to death. They have a million-and-one requests for special treatment after the sale. Third, they have a short-term time horizon. They think only in terms of here and now.
One example of a predatory price buyer is the company that hires an outside consulting group to handle its purchasing. This generally means two things: first, they don't want to do the dirty work themselves; second, they are really saying that they can't trust their own purchasing people to make good decisions, and that their suppliers are all thieves. These third-party buying groups have done more to reduce trust between buyers and sellers than anything in recent memory. These buying groups can single-handedly ruin long and loyal relationships and years of good will.
When selling to predatory price buyers, you must decide whether or not you want their business. If you must pursue it, here are a few suggestions. First, since they think only in the present, ask them questions to stretch their time horizon. "If we were to fast forward 12 to 18 months, how would your management look back on this decision and evaluate its effectiveness? Would it be the price you paid or the value you received?" Or, "When the ink dries on the invoice, what will determine the value of your decision – the price or everything we do to help you succeed?" Granted, these questions may cause the buyer to raise his or her eyebrows, but give it your best shot.
Second, if you want the business, make the buyers accept what they are willing to pay for. Un-bundle your solution by stripping it of your value-added services and reducing the cost to serve. Deliver less when they pay less. Tell the predatory price buyer, "I can give you the price you want, as long as you don't care how I get you there."
Your company has a right to make money. Predatory price buyers are a daily reality for salespeople, but you don't have to take it lying down. Fight for your margins. Be tight with your discounts. And just because the predatory price buyer raises a price objection, that doesn't mean that you have to lower your price.
| Author Information |
| Tom Reilly is a professional speaker and author of the books Value Added Selling and Crush Price Objections. He may be reached via e-mail at tom@tomreillytraining.com or by phone at 636-537-3360. |















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