A customer tells his current sales rep that another vendor offered him a better contract for the same price. The customer threatens to switch to the other vendor unless the sales rep makes a better counteroffer. What should the rep do first?
Tell him the company is always improving its services and ask him to reconsider switching
Promise to call him back, and then discuss the situation with a manager
Promise not to raise the price of his service in the future if he stays
Tell him that vendors often raise their prices after convincing customers to switch
Thank him for his transparency and ask how the other vendor’s offer is better
Ask how much of a price reduction would convince him to stay
The Correct Answer and Explanation is :
The correct answer is: Thank him for his transparency and ask how the other vendor’s offer is better.
Explanation:
When a customer brings up the possibility of switching vendors based on a competing offer, the best approach for the sales representative is to first gather as much information as possible before making any promises or decisions. Asking how the other vendor’s offer is better allows the sales rep to understand the customer’s true needs and expectations. This opens up a dialogue that can help the rep determine whether the current offer can be matched or improved upon, or if there are other factors influencing the decision beyond just price.
This approach is more effective because it focuses on understanding the customer’s perspective. It shows that the sales rep values the customer’s input and is genuinely interested in providing a solution that meets their needs, rather than making a quick counteroffer without knowing the full context. By learning the details of the competitor’s offer, the rep can assess whether it is truly a better deal or if the customer might be overlooking key differences, such as service quality, product features, or long-term benefits.
Jumping directly to promises, such as agreeing to price reductions or making guarantees about future price stability, may be premature without a deeper understanding of the situation. Additionally, making promises to call back or discussing the issue with a manager could delay the conversation and potentially frustrate the customer, who is already expressing dissatisfaction with the current offer.
In summary, asking the customer for more details about the competing offer helps the sales rep respond in a more informed, thoughtful manner. This approach allows the rep to either tailor a more competitive offer or adjust the existing offer in a way that meets the customer’s needs, helping to retain their business and prevent them from switching vendors.