Unscrupulous Competitors

It seems the world is filled with unscrupulous competitors.

Last week, during my Sales Training Boot Camp, someone asked this question.

"The products we sell are made from petroleum based raw materials and our material costs have skyrocketed 40% this year - how do we pass this on to our customers?"

And then there was a part B to the question. "How do we pass this on to our customers when our major competitor is holding steady with their prices?"

Well there are all kinds of possibilities to consider. The competitor may be selling from excess inventory and can afford to hold prices for a while.

They can be deliberately low-balling their prices to gain market share.

They could be doing a salesamadazzle - I made that up - keeping prices low for the short term and then raising them, once they have the bsuiness, for the long term.

Have you been to a gas station lately?

Have you been to a supermarket lately.

Have you received your homeowners insurance bill lately?

Have you looked at the interest rates on your credit cards lately?

What they all have in common are rising prices. These higher prices are being passed on to you because the seller's costs are going up.

There are no quick and easy ways for salespeople to pass price increases to customers. But you have to make a profit and companies who don't make a profit can go out of business - have you been reading the newspapers lately?

So one option is to build a case for your customers. Offer evidence showing how much your raw material costs are going up. Offer more proof about how your company is decreasing and even eliminating some costs of manufacturing.

Your customers won't like it but you'll be in a much better position if your customers understand the reasons why.

What if you're dealing with unscrupulous competitors? These unscrupulous competitors are telling your customers they will not pass their higher cost of raw materials to their customers.

What are these unscrupulous competitors really saying?

Are they saying they won't be raising prices today?

Are they saying they won't be raising prices tomorrow?

Are they saying they won't be raising prices ever?

Your competitors aren't magicians. They can't keep swallowing rapidly rising raw material costs.

Sooner or later and it's probably closer to sooner than later - they'll have to raise their prices.

Let your customers know you're put in a Catch 22 position. If you raise your prices you may lose the business. If you don't raise your prices your company becomes unprofitable.

If you're competing against an unscrupulous competitor, it's possible they'll take your business and then raise their prices.

Ask your customer if he's getting a written commitment and a specific time frame for the lower pricing.

Ask your customer if he has included penalty clauses if terms of the contract are broken or changed.