Handling Price Matching Without Undermining Value

Price matching requests can be a daunting challenge for any salesperson, especially when commission is tied to the value of the sale.

However, these requests don’t have to undermine your confidence.

With effective sales training, your team can turn price objections into opportunities to showcase your brand’s value without compromising on margins.

One notable example of a successful price matching strategy is the iconic “Never knowingly undersold.” pledge by John Lewis, which exemplifies how to maintain integrity and customer trust.

Let’s explore why customers request price matching and how you can strategically respond.

Why Customers Ask for Price Matching

Customers ask for price matching for various reasons, often driven by a reasonable desire to get the best deal. With the rise of online shopping, price transparency has increased significantly, enabling buyers to quickly compare prices between competitors.

There is also the concept of System 1 thinking (as proposed by Nobel prize-winning psychologist Daniel Kahneman) by which humans seek easy heuristics to make easier decisions, rather than employ complex logical System 2 thinking.

In other words, a “money off” sticker often carries more weight than a long list of product specs.

Some more thought through reasons for a price match request include:

• Budget Constraints: Customers may have tight budgets and are looking for the lowest price to stick to their financial limits.
• Perception of Parity: They may believe that similar products or services provide equal value; price then becomes the key differentiator.
• Negotiation Tactics: Some customers may use sales objections as a negotiating tool to secure a discount or an extra benefit.

While these requests can feel like an immediate threat, especially in a competitive market, they also present an opportunity to reinforce your unique value and build a stronger relationship with the customer.

What you don’t want to do is wince, draw-in breath, crinkle your eyes and look like you’re sucking a lemon!

The Real Danger of Price Matching

The primary risk with price matching is that it can lead to a race to the bottom. This is more prevalent in some sectors than others, of course. Constantly lowering prices to compete may:

• Undermine Your Brand’s Perceived Value: If your product is consistently discounted, customers may start to question its quality or worth.
• Erode Profit Margins: Each price match cuts into your profit, which could affect the long-term sustainability of your business.
• Encourage Future Discounts: Once customers realise they can negotiate on price, they may be more likely to ask for a discount again, expecting the same flexibility.
• Undermine the value of discretionary discounts: You’ve probably seen stores that seem to be constantly holding a sale: can there really be any meaningful discounts on offer if a sale never ends?

Without careful handling, overuse of price matching strategies can harm both your business and your brand.

How to Highlight Your Unique Value Proposition

Rather than immediately agreeing to a price match, the focus should shift to showcasing your product or service’s unique value.

This could be your product’s superior quality, exceptional customer service, faster delivery, or additional, unique benefits. Demonstrating how you offer more than the competition is key to justifying a price difference.

For example, you could say:

“We may not be the lowest price on the market, but our solution includes 24/7 customer support and a two-year warranty, which none of our competitors provide at this price point.”

12 Proven Strategies for Handling Price Matching Requests

When faced with price matching requests, how you respond can make all the difference.

Below are several strategies you can use to protect your margins while addressing the customer’s concerns.

1: Reaffirm the Value of Your Product or Service

Before discussing price, remind the customer of the benefits and unique features of your product or service. Emphasise what sets you apart from competitors, such as superior quality, a strong warranty, or excellent customer support. If you’ve won any awards or garnered rave reviews, now is the time to stress those accolades.

Example:
“You’re not just buying a product; you’re investing in ongoing support, faster service, and a long-term solution that delivers better value.”

2: Offer a “Non-Monetary” Concession

If the customer insists on a price match, try to offer non-monetary benefits instead of a direct discount. This could include extended service, additional training, or a free upgrade. You should have a few options at your fingertips for this eventuality.

Example:
“For that price, I can’t match exactly, but I can offer you a free upgrade to our premium customer support plan for six months.”

3: Ask for a Trade-Off

When a customer requests a price match, ask if there’s anything they would abandon to achieve the discount. This strategy not only shifts the focus from the price but also demonstrates that value-based selling comes with certain trade-offs.

You’ll often find the customer backs off when they realise they might miss out on something valuable.

Example:
“We can reduce the price, but it would mean scaling back on the customization options we discussed. How would that impact your project?”

4: Compare the Full Picture, Not Just the Price

Many customers focus solely on the sticker price, neglecting other factors like shipping fees, delivery times, or additional services. Ensure they’re comparing apples to apples by highlighting the full scope of your offering.

Example:
“The competitor may be offering a lower price, but our package includes free installation and a 12-month maintenance service that they don’t provide.”

5: Use Time-Sensitive Offers

One way to handle a price match request is by creating urgency with a time-sensitive offer. Let the customer know you’re willing to work with them but within a specific time frame. Be careful that this deadline doesn’t sound punitive or arbitrary.

Example:
“We can offer you a 5% discount, but this offer is valid only if we can close the deal by Friday.”

6: Bundle Offers

Create additional value for the customer by bundling your product with related services or features. This allows you to maintain your price while still offering more perceived value than a direct price match.

Example:
“If we stick with the current pricing, I can offer a complementary service, such as a one-year extended warranty, to ensure you get more value for your money.”

7: Offer Payment Flexibility

Instead of reducing the price, offer more flexible payment terms, such as extended payment plans or delayed payments. This can make the purchase more attractive without altering the price point.

Example:
“We can’t match that price, but we can spread your payments over six months with no interest. Would that make it more affordable for you?”

8: Focus on Post-Sale Support and Services

Highlight the quality and comprehensiveness of your post-sale services, such as customer support, training, or maintenance, to demonstrate added value.

Example:
“The competitor’s price may be lower, but we include 24/7 customer support, free training, and ongoing maintenance, which will save you time and money in the long run.”

9: Reference Customer Success Stories

Use testimonials or case studies to demonstrate how previous customers achieved better outcomes or ROI by choosing your product over a lower-priced competitor. Highlight how these success stories can help build a strong and loyal customer base, reinforcing the value of your offering. Make sure you can back up such case studies with evidence and specifics.

Example:
“One of our clients had a similar choice between us and a cheaper competitor, and after choosing our solution, they saw a 30% improvement in efficiency within six months. We’d love to help you achieve similar results.”

10: Customise the Offer Based on Customer Needs

If possible, tailor your offering to meet the specific needs of the customer. This could involve modifying the product or service to better align with their requirements, allowing you to maintain the price while increasing perceived value. Bespoke or personalised offerings can more reasonably command a unique price.

Example:
“Let’s customise this package to exactly fit your needs. We’ll include only the features you’ll use most, which ensures you’re getting the best value for your investment.”

11: Highlight Long-Term Relationships and Trust

If you have an existing relationship with the customer, remind them of the trust and reliability you’ve built over time, emphasising the risk of switching to a lesser-known competitor. NB: this needn’t require you to denigrate your competitor, just stress the uncertainty of opting for their offering.

Example:
“We’ve worked together for several years now, and you know you can rely on our timely delivery and exceptional service. While the competitor’s price might look attractive, there’s a lot of uncertainty in terms of what you’ll receive from them.”

Discover more practical strategies to strengthen client connections with our list of 10 relationship selling examples. Learn how to build trust, deepen loyalty, and drive long-term success in your sales approach.

12: Highlight Long-Term Savings

Instead of focusing solely on the upfront price, guide the customer to look at long-term value, such as lower total cost of ownership or reduced maintenance expenses over time. This shifts the conversation from price to the price vs sales value.

Example:
“Our initial price might be higher, but with our energy-efficient design, you’ll save 20% on operational costs over the next five years.”

When Price Matching Might Make Sense

In some cases, price matching can be a strategic move. It might make sense if:

1. You’re in a highly competitive market where price is the main differentiator. This is the situation with John Lewis in the competitive world of retail superstores.
2. You’re trying to win a high-value client who could lead to more business in the future. Sometimes a “loss-leader” offer is a strategic coup.
3. The price difference is minimal, and absorbing the cost won’t significantly impact your margins. If your margin is 20%, perhaps a 5% discount doesn’t make a significant difference.

In these instances, price matching strategies may help you secure long-term customer loyalty.

How to Keep Control of the Conversation

It’s essential to keep control of the price matching conversation by steering it toward value rather than price alone. Here are a few tips:

• Ask questions that get the customer to reflect on what they truly need beyond just the price. This could be convenience, efficiency savings, flexibility, peace of mind, or many other non-monetary values that comprise your product’s UVP.
• Frame the conversation around outcomes rather than features, helping them see the long-term value of your product.
• Stay calm and composed—don’t rush to agree on a discount, as this can diminish your position and invite more customer price concerns in the future.

The Long-Term Impact of Price Matching

Frequent price matching can have a detrimental effect on your brand’s perception and profitability. While it may offer a spike in your sales volume short-term, over time, it may lead to:

• Customer price sensitivity, where clients expect lower prices regularly.
• Decreased brand loyalty, as customers chase the cheapest option.
• Eroded profit margins, which can undermine the sustainability of your business.

To avoid this, focus on the long-term benefits of retaining value, such as higher customer loyalty, better brand perception, and increased margins over time.

To match or not to match

Price matching requests don’t have to be threatening.

When managed strategically, they become opportunities to reaffirm your value and win customer trust. Use the above strategies to maintain control of the conversation, highlight your unique proposition, and protect your margins.

For more insights and hands-on training to enhance your win-win sales negotiation strategies and sales negotiation tactics, explore our Selling Skills Training, or bring our experts to your team with In-House Training.

Test your negotiation aptitude with our Sales Personality Test.

Happy Selling!

Sean

Sean McPheat
Managing Director
MTD Sales Training