How to close a deal when the prospect has a “better offer” from a competitor

by Steli Efti
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During price negotiations, prospects often mention the incredible offers they’ve received from your competitors. X Company gave them a massive discount. Y Company dropped all service fees. Z Company provided exclusive access to a bunch of new features.

As a salesperson, your first instinct might be to counter those offers—after all, it’s your job to close deals—but many times that’s a mistake. Instead, take a step back and ask yourself one fundamental question:

Why are these prospects still talking to me?

If the other deals are so great, why don’t they just buy from your competitors? Why go through the hassle of re-negotiating with you?

Because you have something they want—a superior product.

If they’re torn between two deals, don’t compete on price alone. There’s no path to victory in a price war. When you offer another discount, the competition will just lower their prices, too. You need to close them based on value, not price.

In the middle of price negotiations, it’s easy to forget why they’re even talking to you. But if they’re still on the phone, that means your product provides real value for them. They’re ready to buy. They just want to see what else you can offer.

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Let me share a quick Close.io story

One of our sales reps was in the final stages of negotiation when the prospect said they were going with someone else. Apparently their CEO decided not to sign for two reasons:

  1. One of our bigger competitors was offering a massive discount
  2. Their current solution was also cheaper than our offer

So the rep came to me and said, “I already gave them a great discount, but they’re asking for more. What can we do?”

I said, “If they’re so happy with their current solution and this other offer, why are they still talking to us? What kind of value do we create for them—how much would we increase revenue or decrease operational costs over time?”

Unfortunately, because their earlier conversations had been so positive, the rep missed an opportunity to frame the price negotiation around value—which goes to show you that even we make mistakes.

So what did we do next?

I sent an email to the CEO that basically said:

“We’re excited to work with you, but we’ve given you the best deal we can. We’re confident this partnership will create a ton of value for both of us, so let’s get started.”

All I did was reinforce that we’d offered a great deal and that we wanted to work with them. Shortly after, the CEO replied:

“I appreciate you stepping in, but we’re getting a 60% discount here and a 70% discount there. We’d like a better offer from you guys.”

I thanked the CEO and said:

“If you’re really getting these kinds of discounts, you might want to take them. It could be the best thing for your business.”

I honestly meant this. In the end, only they know what’s best for their business. I did, however, want to explain why we weren’t offering any further price reductions:

“We like to be super transparent with our pricing. We don’t have any hidden costs—what you see is what you get. But being transparent means we can’t play the discount game. Unlike some of our competitors, we don’t offer massive discounts and then find other ways to get that money back. That’s not how we do business. If you want to go with X Company, that’s cool. I think they offered you a great deal. But if you want to work with us, we’re ready to go.”

What happened next?

They replied and said, “Thanks for the deal—we’re excited to work with Close.io. Let’s get started!”

When prospects flaunt other offers during price negotiations, remember to ask yourself, “Why are they talking to me if there are so many ‘better’ offers on the table?”

It’s because you’re worth it.

So don’t chase discounts. Don’t buy into the hype that your competitors have better offers. You have the best offer. You have the right product for them. You provide the most value. That’s why, after all this back and forth, they’re still on the phone with you.

 

 

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