Pavone
SIGN IN

How to Respond to "Your Competitor Is Cheaper"

"Your competitor is cheaper" is sometimes true, sometimes a negotiating tactic, and almost always based on a comparison that is not like-for-like. Before you respond, you need to know what is being compared and whether price is the only thing in the way. This page covers how to find that out and what to say once you have.

Want one built around your product? Use the Sales Objection Handler.

How buyers phrase it

  • We've had a lower quote from [competitor].
  • Can you match what [competitor] is offering?
  • Your pricing is well above the others we've seen.
  • [Competitor] is offering the same thing for less.
  • I can get this cheaper elsewhere.
  • You're the most expensive option on the table.

What "Your competitor is cheaper" usually means

Price comparisons between vendors are rarely like-for-like. The cheaper quote may exclude implementation, support, training, or integrations that you include; it may be for a smaller scope, a shorter term, or a tier that does not do what the buyer needs. The buyer often does not know this because they are comparing headline numbers from two proposals written in different formats. Your first job is to understand what is actually being compared.

Sometimes the comparison is fair and the competitor is genuinely cheaper for the same thing. Then the question is whether the buyer wants the cheaper option, and you need to find out what the difference buys them, using something they told you mattered. If nothing you do is worth the difference to this buyer, you are going to lose on price and you should decide whether to match or walk, not pretend the gap does not exist.

The negotiating version is a buyer who prefers you and is using the competitor to get a better number. The tell is that they are still talking to you after telling you the competitor is cheaper. A buyer who had decided on the cheaper option would not bother. Treat it as a sign of preference, and respond with a conversation about value rather than a reflex discount.

Ask before you answer

Most reps respond to the words. The better move is to find out what is behind them first.

  • Can we compare what's in each quote, so we're looking at the same thing?
  • Is the lower price for the same scope, term, and level of support?
  • If the prices were identical, which would you choose, and why?
  • What's the difference in cost, roughly?
  • Is price the only thing left to decide, or are there other factors?

The four-step response

1. Acknowledge

Take it seriously and do not get defensive about the competitor. "That's useful to know, and I'd expect you to be comparing" treats the buyer as a rational person doing their job. Do not disparage the competitor, do not act hurt, and do not immediately reach for a discount. The buyer is watching how you respond to pressure, and that tells them what you will be like as a vendor.

2. Clarify

Ask to compare the quotes side by side: scope, term, users, support, implementation, what happens at renewal. Nine times out of ten the comparison is not like-for-like and the buyer discovers that themselves. Then ask the decisive question: if the prices were the same, which would you choose? If the answer is you, the deal is about the gap, not the price. If it is them, price is not your real problem.

3. Reframe

Shift from headline price to total cost and outcome. Total cost includes what the competitor charges separately, what it costs to switch if it does not work, and what the difference in outcome is worth. Use the buyer's own numbers from discovery. If the gap is small relative to the problem they are solving, say so plainly. If the gap is large and your product is not worth it to them, you will not reframe your way out, and you should know that.

4. Ask

Ask what would make the decision easy, rather than offering a discount. If they prefer you and the gap is the only issue, trade for it: a longer term, a case study, a faster start, a reference. If you decide to move on price, do it once, with a reason, and in exchange for something. Then ask for the decision, because a price concession without a close invites another round.

Word-for-word responses

On a cold call

That's useful, and I'd expect you to be looking at options. I don't know what their quote covers, so I'm not going to argue with it blind. What I'd suggest is fifteen minutes to compare what's actually included, because in my experience the headline numbers rarely cover the same things. If it turns out they're cheaper for the same thing, I'll tell you that. Would that be worth your time?

On a discovery call

Thanks for telling me. Can I ask what's in their quote? Specifically: is implementation included, what level of support, and what's the term? [Listen.] Okay, so ours includes [items] and theirs prices them separately, which means the real comparison is [adjusted numbers]. Setting price aside for a moment, if they were identical, which would you pick? That tells me what we're really deciding.

After a demo

I appreciate you being straight about it. You've seen both now, so let me ask: what did you see in ours that theirs doesn't do, if anything? [Listen.] And is that worth [the difference] to you over [term], given what you said [problem] is costing? If the honest answer is no, I'd rather hear it now. If yes, let's talk about what would make the decision easy rather than me just cutting a number.

Late in the deal

Understood. We're late enough that I'll be direct: you're still talking to me, which tells me you'd rather go with us if the numbers worked. Is that right? [Listen.] Okay. I can't match a quote that covers less than ours, but I can look at the term, the start date, and the scope. If we moved on [specific concession] in exchange for [a longer term or a reference], would that close it? I need this to be the last round, not the first.

By email

Thanks for letting me know. Before I respond on price, I'd like to make sure we're comparing the same thing. Our quote includes [items]; could you check whether theirs does, and whether the term and user count match? If after that they're still cheaper for the same scope, tell me the gap and I'll tell you honestly whether we can close it and what I'd need in return. I'd rather be transparent than play games with the number.

What not to say

  • "Yes, but they're not as good." Unverifiable, defensive, and it insults the buyer's research.
  • Matching the price immediately. You have confirmed your pricing was inflated and started a bidding war.
  • "You get what you pay for." It sounds like a threat, and the buyer has not decided yet.
  • Criticising the competitor's product or customers. You look rattled and the buyer trusts you less.
  • "Let me see what I can do" with no questions asked. You have conceded without learning what the comparison is.

Frequently asked questions

How do you respond when a prospect says a competitor is cheaper?

Ask to compare the quotes side by side on scope, term, support, and implementation, because headline numbers are rarely like-for-like. Then ask which they would choose if the prices were equal. If they prefer you, the conversation is about closing the gap with trades rather than discounts. If they prefer the competitor, price is not your real problem.

Should you match a competitor's price?

Not reflexively. First confirm the comparison is fair, then establish whether the buyer prefers you. If they do and the gap is the only issue, trade something for a concession such as term length, a reference, or a faster start, and do it once. Matching immediately tells the buyer your pricing was never real.

How do you compete when you're the most expensive option?

Move the comparison to total cost and outcome. Include what competitors charge separately, the cost of switching if the cheaper option fails, and the value of the difference in results using the buyer's own numbers. If the difference does not matter to this buyer, you will lose on price, and it is better to know that than to discount into a bad deal.

How do you know if a prospect is bluffing about a cheaper competitor?

Ask for the specifics: what is included, the term, the user count, the difference in price. A real quote comes with details; a bluff stays vague. More usefully, note whether the buyer is still engaging with you. A buyer who had chosen the cheaper option would not be on the phone telling you about it.

What should you say when asked to beat a competitor's quote?

Say you will look at it once you understand what is being compared, and ask for the breakdown. If the scope matches and the buyer prefers you, offer a structured concession in exchange for something. If the scope does not match, show the difference and let the buyer decide whether they want the cheaper, smaller offer.

More how to respond to common sales objections

Start practicing in minutes

AI Roleplays for any scenario

  • Build a roleplay from your scenario
  • Practice with AI, voice to voice
  • Get instant, structured feedback after practice
  • Free to start — no credit card required