Latest / Closing the Deal with Fexingo: Sales, Negotiation, and Revenue Conversations for Operators / How One Rep Used a Competitor Discount to Win the Deal
Transcript
- Lucas: So there's a moment in almost every B2B sales cycle where the prospect says, 'Your competitor is offering this at thirty percent less.' And most reps' instinct is to match it or panic. But one rep I know did something different—and walked away with the full price deal. Luna: I've been on the receiving end of that line as a buyer, and it usually works. How did this rep handle it without matching? Lucas: Let's set the scene. It's a SaaS company selling project management software to mid-market firms. Their annual license is about $120,000. The competitor's offer comes in at $84,000—a thirty percent gap. The prospect is a VP of Operations who's been evaluating for months. Luna: So the rep is sitting on a $36,000 difference. That's real money. What was his first move? Lucas: He didn't flinch. He said, 'I'm glad you brought that up. Can I ask—did their proposal include the implementation support and the custom integrations you need?' The VP admitted it didn't. The competitor had a basic package, no onboarding, no API access. Luna: So the rep shifted the conversation from unit price to total cost of ownership. That's a classic move, but it only works if the competitor actually stripped things out. Lucas: Exactly. But here's the twist—the rep didn't stop there. He then asked, 'If you go with their solution, how many hours of your team's time would it take to build those integrations yourself?' The VP estimated about 400 hours. Luna: Four hundred hours at, say, a loaded cost of $100 an hour internally—that's another $40,000. Suddenly the competitor's price isn't lower at all. Lucas: Right. The rep did the math on the spot. He said, 'So your real cost with them is $124,000, plus the risk of delays and bugs. With us, it's $120,000, fully supported, and we guarantee go-live in six weeks.' The VP couldn't argue with that. Luna: But what if the competitor had matched the scope? Does this strategy fall apart? Lucas: That's the smart question. In this case, the rep knew the competitor's standard offering because he'd lost deals to them before. He'd mapped out exactly what they typically excluded. He wasn't guessing—he had data. Luna: So preparation is key. Going into a pricing conversation blind is a death sentence. Lucas: Absolutely. But there's another layer. The rep also used what's called a 'comparison anchor.' He said, 'I'm not going to ask you to ignore the price difference. But I want you to compare the two solutions over three years, not one.' Luna: Long-term anchoring. That's smart because SaaS contracts often auto-renew, and switching costs are high. Lucas: Exactly. He walked the VP through year two and three. With the competitor, year two would include a price increase of about eight percent—common in their model—and the VP would still need to pay for integrations separately. With his company, the price was locked for three years, and all upgrades were included. Luna: So the three-year total for the competitor was something like $275,000, versus his $360,000? Wait, that's still higher. Lucas: Great catch. Let me clarify. The competitor's base price was $84,000 year one, but with the hidden costs and the year-two increase, the three-year total was about $285,000. His company's three-year lock was $360,000. So there was still a $75,000 gap over three years. Luna: So how did he close that? That's a significant difference even with the TCO argument. Lucas: He didn't try to close it on price. Instead, he asked a different question: 'If you choose us, what's the revenue impact of having a stable platform that doesn't crash during your peak season?' The VP admitted their current system had caused $200,000 in lost orders the previous year. Luna: So he reframed the conversation from cost to value—specifically, the cost of not choosing them. Lucas: Right. He said, 'If we reduce that risk by even fifty percent, that's $100,000 in recovered revenue. The $75,000 price gap becomes irrelevant.' And the VP agreed. The deal closed at full price. Luna: This is a great example of why price-matching is usually a trap. You're training the buyer that your price is negotiable, and you're commoditizing your product. Lucas: And you're leaving money on the table. In this case, if the rep had matched the $84,000, the company would have lost $36,000 in year-one revenue alone. Instead, they kept the full $120,000. Luna: What's the one takeaway for reps listening? If a prospect brings up a lower competitor price, what should they do? Lucas: Three steps. One—acknowledge the offer without panic. Say, 'That's an interesting price point, let's look at what's included.' Two—shift to total cost of ownership by asking about implementation, integration, and hidden costs. Three—reframe to value by quantifying the risk or loss of not choosing your solution. Do those three things and you'll rarely need to discount. Luna: I'd add one more thing. Never bluff about competitor weaknesses. If you get caught exaggerating, you lose all credibility. Lucas: Huge point. This rep knew the competitor's limitations because he'd done his homework. He never said anything he couldn't back up with evidence. And that's why the VP trusted him. Luna: It's also worth noting that the VP didn't push back after the rep made his case. He was actually relieved—he didn't want to switch to a cheaper solution that would cause headaches. He just needed permission to pay more. Lucas: That's the psychological insight a lot of reps miss. Buyers often bring up competitor pricing as a negotiating tactic, not because they actually want the cheaper option. They want the best solution at a fair price. If you can justify your price with clear logic, they'll often go with you. Luna: And conversations like this—ones that dig into real strategy and save reps from leaving money on the table—that's exactly the kind of content we try to share on this show. Lucas: Yeah, we keep these episodes ad-free because we think useful sales advice shouldn't be interrupted by commercials. If you find value in that approach, you can support the show at buy me a coffee dot com slash fexingo. Luna: And it genuinely helps us keep doing deep dives like this one. So thank you to anyone who chips in. Lucas: Alright, back to the deal. One more angle on that competitor discount story: the rep also used a 'trial close' before he ever brought up price. He asked the VP, 'If we can solve the integration issue and lock in the price for three years, is there any reason you wouldn't move forward?' Luna: So he was testing for hidden objections before the price discussion even started. Lucas: Exactly. And the VP said, 'No, if you can do that, I'm ready to sign.' So when the competitor's lower price came up later, the rep already had a verbal commitment contingent on those conditions. That gave him leverage. Luna: That's a great framework. Get the prospect to agree on value first, then handle price as a secondary issue. Lucas: Right. And in this case, the rep never actually said 'our price is worth it.' He let the VP discover that himself through the numbers. That's the mark of a confident seller.