How to Handle:
“[Competitor] is cheaper”
Price comparisons are inevitable in competitive deals. This objection requires shifting the conversation from cost to value, while also ensuring you understand what's actually being compared.
Why Prospects Say This
The prospect may be budget-conscious, using price as a negotiating tactic, or genuinely confused about why your pricing differs. Sometimes cheaper competitors have hidden costs, limited functionality, or different service levels that aren't immediately apparent in pricing comparisons.
Best Responses
The Apples-to-Apples Response
“I appreciate you being upfront about that. Help me understand what you're comparing - are we looking at similar scope, similar service levels, and similar outcomes? Often what looks cheaper initially has hidden costs that emerge later.”
Why It Works
Most price comparisons aren't equal. This question reveals what's actually being compared and opens the door to discuss differences.
Best For
When you suspect the comparison isn't equivalent
The Total Cost Framework
“You're right, their sticker price is lower. But when you factor in [implementation costs/hidden fees/support quality/time to value], our customers typically see a lower total cost of ownership. Would it be helpful to walk through that math together?”
Why It Works
Shifts focus from purchase price to total cost of ownership, where premium solutions often win.
Best For
Complex purchases with significant implementation or ongoing costs
The Outcome Focus
“If [competitor] could deliver the same results at a lower price, I'd tell you to go with them. But here's what I've seen: companies that choose based on price often end up paying twice - once for the cheap solution, then again when they need to upgrade. What outcomes are you trying to achieve?”
Why It Works
Reframes the conversation around results rather than cost. Introduces the concept of paying twice for cheap solutions.
Best For
When you have strong outcome data or case studies
The Risk Calculation
“You're absolutely right about the price difference. The question I'd ask is: what's the cost of getting this wrong? In my experience, the companies that save money upfront often spend more fixing problems later. What's at stake for your business here?”
Why It Works
Introduces risk into the equation. Premium pricing often correlates with lower risk and better support.
Best For
High-stakes purchases where failure has significant consequences
The Value Stack
“They might be cheaper, but let me share what you get with us that isn't included in their price: [dedicated support/faster implementation/better integrations/proven results]. Which of those would be most valuable to your team?”
Why It Works
Makes the value difference tangible by itemizing what's included in your premium.
Best For
When you have clear differentiation in service or capability
Do's and Don'ts
Do This
- Understand exactly what's being compared before responding
- Shift the conversation from price to value and outcomes
- Quantify your differentiation in dollar terms when possible
- Share stories of customers who chose cheap and regretted it
- Ask about the cost of failure or getting the decision wrong
Don't Do This
- Get defensive about your pricing
- Immediately offer a discount without understanding the full picture
- Trash the competitor's quality without evidence
- Assume the prospect only cares about price
- Ignore the objection and hope it goes away
Follow-up Questions to Ask
“What exactly does their proposal include compared to ours?”
“How are you thinking about the total cost over the life of the contract?”
“What happens if the solution doesn't deliver the results you need?”
“Have you factored in implementation, training, and ongoing support costs?”
“What would it cost your business to delay solving this problem while switching vendors later?”
Industry-Specific Variations
“Their per-seat pricing is half of yours”
“Per-seat pricing can be misleading. When you add their required add-ons, implementation fees, and premium support, how does the total compare? Our customers typically find our 'expensive' price is actually cheaper at scale.”
“We got a quote from another agency that's 40% less”
“I've seen those proposals. The question is: are they staffing with senior people or junior resources? Are they including strategy or just execution? A lower price often means you're paying for learning curves and rework.”
“The open-source alternative is free”
“Free sounds great until you calculate engineering time for setup, maintenance, security patches, and troubleshooting. Our customers who switched from 'free' found they were actually spending 3x more in internal costs.”
Pro Tips
- Never lead with discounting - understand the value gap first
- Build a competitive pricing comparison document that shows total cost of ownership
- Train yourself to ask 'what's included in their price?' before responding
- Remember: if you win on price, you'll lose on price to the next competitor
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