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Is it ever wise to hand your competitor a sale?

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During a recent sales training workshop, I became involved in a spirited discussion about giving away business. I suggested that it sometimes makes good business sense to pass a sale onto a competitor. The moment the words escaped my lips, a look of horror appeared on workshop participants’ faces.

One participant stated that if he gave away a sale, he might face severe consequences from his manager. Others in the room nodded in agreement. So, for the next 30 minutes or so, we debated the merits of walking away from a sale and actually recommending a competitor instead.

This is a difficult concept for some salespeople to accept, I know. And this is because they believe that any sale is better than no sale—especially if it means that the prospect might go to a competing company for a product or service.

There are, however, times when that is exactly what you should do. A few years ago, I was coaching the owner of a small, independent retail store that sold nutritional products and health supplements. She had many customers who consistently asked her to match her competitors’ prices, and she always agreed to their requests, even if it meant she lost money on the sale. She felt her customers would see the value of her knowledge and service and eventually be willing to pay full price. I suggested that she stop price-matching and focus her attention on attracting more customers who were willing to pay full price.

Unfortunately, she was reluctant to make this change, and she continued to struggle to make her business profitable. She had the top-line revenue, but she didn’t have the necessary profits to pay her bills. Eventually, she was forced to shut down. It is never easy to walk away from a deal, but sometimes your business can actually benefit from it.

In many cases, the people who demand your absolute lowest price are the most difficult people to deal with after a sale is closed. They’re needy. They seem to always call with a problem of some sort. In short, they are high-maintenance. As a result, you end up spending valuable time dealing with them when you could be selling to high-value customers instead.

Every minute you waste on a low-value, low-profit customer is a minute you can’t spend on a high-value, high-profit customer.

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