Selling;

 

As more small companies find themselves competing head-to-head with the Fortune 1,000, they are increasingly worried about the danger of predatory pricing. But not our friend Harry. He's happy to be up against a price predator. "I've got my entire sales force trained to deal with the problem," he says. "The last thing I want is for them to stop doing it."

Harry (that's a pseudonym) is in a market dominated by a Fortune 1,000 company (call it "Mammoth Corp.") whose salespeople, as a matter of policy, will undercut any price offered by Harry's people, even if that means selling at a loss. Nevertheless, he says he seldom loses customers to his huge competitor.

"Customers hate predatory pricing," he says. "They hate the idea that a company charges different prices for the same product or service. So the trick is to get the predator to show his cards.

"Our customers and prospects usually tell us when [Mammoth] has contacted them. Then our salesperson immediately finds out whether [Mammoth's] guy knows that the prospect is talking to us. If he does, we know he's come in with a low price. So we tell the prospect to call [Mammoth], pretending to be someone else, and ask for a price over the phone. Invariably, it's different from the one already quoted.

"If [Mammoth's] guy doesn't know we're around, it's even easier. We ask the prospect to get him to quote a price before mentioning us, and then tell him that we are competing for the business. Unfailingly, [Mammoth's] guy will change his price on the spot, which makes the customer furious. Nine times out of 10, we get the account."