Summing up a recent number of continuous articles, we saw that rather than reduce your price, it’s best to communicate value. If that doesn’t result in the sale, you can often refer your prospect to a less-expensive (and, often, less value-based) competitor. In James’ case, this worked out great. Many others have found the same. I know I have. Often, when you are willing to refer someone to a competitor, you position yourself to receive the sale.
The reasons for this was discussed in the second article.
So, enough said? Actually, not really. Because it’s very important for us to understand that — when it comes right down to it — there is the Number One Reason to refer a competitor when it’s appropriate to do so…and that is to provide the best value (based on the unique situation) to your prospect.
How could it really be of best value to them if you are that good at what you do? Let’s look at just a few ways:
1. Price is an issue. Even though the value of your product far exceeds the price, sometimes it really is outside what they should (or can!) spend based on their current financial situation.
2. Product is not available and time is of the essence. Just like Macy’s referring to Gimbel’s in the 1944 classic (please watch the entire 1:54 clip – the ending rocks!), when we don’t have it and know we can’t get it for them in time, perhaps our competitor can and will. If so, make the referral. It’s the right thing to do and, just like in the above movie clip, it’s hard to separate doing good and doing well. 🙂
3. Not your core competency. Perhaps what the customer wants is not what you do well. If you know someone who can and does, make the referral. John David Mann and I highlight an example of that in Go-Givers Sell More via the story of James Smith (a different James than the one in the first two articles of this series). Yes, James turned away one piece of business. And, it came back to him financially many, many times over because of the extreme trust that he built with the customer in the very moment he put their needs ahead of his own.
And, there are many other reasons, I’m sure. Meanwhile, this brings us back to my suggestion at the conclusion of the last article, and that is to be sure that the competitor you refer possesses both high-integrity and excellence of product/service. Or, as Steven M.R. Covey, in his masterful book, The Speed of Trust refers to it, both “character and competence.”
After all, while referring your competitors will often bring you the immediate sale, and will usually bring you long-term sales and referrals, the real reason you are doing this is because – for whatever reason it happens to be at this time – it is truly in the best interest of your prospect or customer. And, when this is held as your highest business value, you cannot help but obtain abundance. And, not for some “way out there, feel-good” reason, but because that is truly the way it works. You are planting the seeds of goodwill (greatwill) that provide a benevolent context for your success.
In addition to those three reasons listed above, can you think of any other reasons why referring a prospect or customer to a competitor would be in their best interest? I’m sure I’ve missed one or two, or many.