How to Beat a Lower-Priced Competitor - Contractor Talk - Professional Construction and Remodeling Forum

Contractor Talk Articles · 02-26-2008, 10:52 PM

Beating a lower priced competitor is something all contractors struggle with and it is a problem that will never go away. There will always be a low-ball competitor lying in the weeds waiting to steal your work. The way to beat a lower priced competitor is to help your prospect realize your services better meet his needs. This is referred to as "selling." You've probably heard of it.

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Discuss this article below

Kenny K · 02-27-2008, 03:02 PM

make sense. good article

Celtic · 02-27-2008, 05:11 PM

Good article...."must" reading material.

MVH · 02-27-2008, 05:43 PM

Good article. I've been struggling with lowballers, too. I'm going to try to educate during my proposal. Please check out the contractor comparison sheet I uploaded to File Swap this morning.

Mike

CBCron · 02-27-2008, 07:20 PM

Mike,

How do I see your comparison sheet?

Ron

Grumpy · 02-27-2008, 07:38 PM

I don't want to read more there, I want to read more HERE. Post the entire article.

threaderman · 02-27-2008, 07:57 PM

I read all the articles,thanks for the information.

concretemasonry · 02-27-2008, 08:08 PM

When you size up a propect as a real low-ball buyer that you will not be able to do work for, give him the name, telephone number of the low price competitor. you may even want to give him a price that is a little lower than you think the low-baller will be at.

You lose nothing and the cheap guy will not be runing around throwing outprices because he has bad leads and will be too busy to do the good work that is out there. - not a new idea, but it worked very well for many people through the years.

You don't expect to do every job you quote, so why not give the bad ones away.

Kenny K · 02-27-2008, 08:29 PM

"only The Welathy Can Afford The Inexpensive Because They Hav Enough Money To Do Project Over And Over" Do You?

Sir Mixalot · 02-27-2008, 09:26 PM

Great read. Thanks.

MVH · 02-27-2008, 09:37 PM

Quote:

Originally Posted by CBCron

Mike,

How do I see your comparison sheet?

Ron

Try this link: http://www.contractortalk.com/showth...726#post387726

You'll also need MS Word or Open Office.

Mike

CBCron · 02-28-2008, 08:06 AM

Dick,

Great advice!

It may be old advice but it's the greatest trick in the book for nailing your competition and differentiating yourself. Many of my clients use it to devastating effect.

Mike,

Awesome form! Why haven't you put that up on your website? It should be linked from your home page so that it pulls up a pdf.

Would you be interested in seeing come alternative way of stating the items that may have more impact on your prospects' buying decision?

If so, may I email them to you (your address is on your website)? Would that be inappropriate? I'm still learning the ground rules of this site.

To All:

Thank You for the positive feedback.

I do my best to put as much helpful advice out onto the internet as I can but often am left guessing as to what contractors want to read.

MVH · 02-28-2008, 09:11 AM

Quote:

Originally Posted by CBCron

Dick,
Mike,

Awesome form! Why haven't you put that up on your website? It should be linked from your home page so that it pulls up a pdf.

Would you be interested in seeing come alternative way of stating the items that may have more impact on your prospects' buying decision?

If so, may I email them to you (your address is on your website)? Would that be inappropriate? I'm still learning the ground rules of this site.

CB,
Thanks for the words on the form. I do plan on putting the form on the website with an occasional pointer from Craig's List. I'm trying to come up with some type of public service wording, ie; "how to pick a good contractor, or protect your home from bad contractors."

And of course you can contract me, unless you're selling something.

Mike

Kenny K · 02-28-2008, 09:30 AM

good ideas

Mike Finley · 02-28-2008, 10:01 AM

That's a good article on the subject with good content, which in a nutshell is build value in the eye of your prospect.

Over the years in all sales I have been in, the #1 thing I have found to beat lowballers is to market and advertise your services to the correct audience and avoid in the first place and as much as possible getting infront of leads that HAVE to be be convinced about your value.

As far as I'm concerned yes, there are some customers who will be swayed, they are a small percentage of the success rate. The vast majority of customers who need this low ballers speech are not going to be swayed, because of internal issues that brought them to this point in history. They can't afford your services, they don't care about quality, and the #1 reason is they whole heartedly believe that there is no difference in the outcome of a project no matter who they choose. When you stand in front of them going over all this value building they glaze over in about 20 seconds.

This sales approach to me is the same as going out and standing on a street corner and giving your sales speech to 100 complete strangers who are walking by with no interests at all about your product. You will end up selling 1 of them.

The opposite is standing in a show room for a company that has a reputation in the community and advertises, and waiting on 100 customers who walk in the door with the intentions of buying your product or a similar one. How many of those leads will you close?

What's forgotten in all this talk about building your value is the majority of contractors standing in front of their leads are standing in front of leads of the quality of the first example of standing on a street corner. Giving that value speech to that group returns very low success rates. Giving that speech to the 2nd group is hardly even required, since if you've done your marketing and advertising right, have established a brand in your community, the people standing in front of you are already there for totally different reasons.

So yes, the article is good information, but if you want a much higher success rate and want to stop having to give the low ballers speech all the time, get in front of customers who don't need that speech. That's the secret to being successful in this or any business.

MVH · 02-28-2008, 10:35 AM

Quote:

Originally Posted by Mike Finley

That's a good article ...
but if you want a much higher success rate and want to stop having to give the low ballers speech all the time, get in front of customers who don't need that speech...

You and your logic and pragmatism.

I'm just having difficulty getting to that point as a new business.

Mike

**Nathan** · 02-28-2008, 05:23 PM

Quote:

Originally Posted by Grumpy

I don't want to read more there, I want to read more HERE. Post the entire article.

There are a number of reasons why we are doing it this way. We have had an articles section for a long time but no one ever went there because people were just focused on the forums. I had a number of good authors come to me and ask if they could write articles for us but I turned them down for a while because I felt like it was a waste of their time. This method has solved that problem and given attention to the articles.

So... now your wondering why we need to post articles in an articles section rather than just posting them in the forum section. There are a couple of reasons for this.

1. Having an articles section allows us more control over the look and feel of the article. For example it's easier to add images and place them exactly were we want them. This has a lot to do with the fluid deign that the forums have verses the fixed width that the articles section has.

2. I try to keep the forums totally off limits to advertising which has worked well... However as a form of payment for their time and effort I'm giving the authors of these articles "plugs" in the form of an author box within the article itself. These author boxes tell a little about the author and give a link to their company. So, having the articles separated from the forums allows us to maintain the ad free nature of the forums.

There are other reasons for keeping the articles in the articles section of the site (SEO, Expansion, etc..). Hopefully having to click to see more isn't causing too many problems. The idea of this "Articles" forum (which is nothing more than an RSS feed) is just to raise awareness that a new article has been published so people know it's there and so far I think it's been working well.

I'm open to feedback though.

Grumpy · 02-29-2008, 08:53 AM

Quote:

Originally Posted by Nathan

There are a number of reasons why we are doing it this way. We have had an articles section for a long time but no one ever went there because people were just focused on the forums. I had a number of good authors come to me and ask if they could write articles for us but I turned them down for a while because I felt like it was a waste of their time. This method has solved that problem and given attention to the articles.

So... now your wondering why we need to post articles in an articles section rather than just posting them in the forum section. There are a couple of reasons for this.

1. Having an articles section allows us more control over the look and feel of the article. For example it's easier to add images and place them exactly were we want them. This has a lot to do with the fluid deign that the forums have verses the fixed width that the articles section has.

2. I try to keep the forums totally off limits to advertising which has worked well... However as a form of payment for their time and effort I'm giving the authors of these articles "plugs" in the form of an author box within the article itself. These author boxes tell a little about the author and give a link to their company. So, having the articles separated from the forums allows us to maintain the ad free nature of the forums.

There are other reasons for keeping the articles in the articles section of the site (SEO, Expansion, etc..). Hopefully having to click to see more isn't causing too many problems. The idea of this "Articles" forum (which is nothing more than an RSS feed) is just to raise awareness that a new article has been published so people know it's there and so far I think it's been working well.

I'm open to feedback though.

Nathan thanks for the reply. The bottom line is I'm too lazy to click over. Have you ever gone to a website and you want to request information, perhaps find a contact number and you end up clicking 15 links before you find what you are looking for? Isn't that just so damned frustrating?

Yeah it's like that.

I pretty much understood your reasoning before your reply. My opinion hasn't changed but I'll quit complaining, won't be clicking either.

john elliott · 03-01-2008, 12:57 PM

Quote:

Originally Posted by Mike Finley

That's a good article on the subject with good content, which in a nutshell is build value in the eye of your prospect.

Over the years in all sales I have been in, the #1 thing I have found to beat lowballers is to market and advertise your services to the correct audience and avoid in the first place and as much as possible getting infront of leads that HAVE to be be convinced about your value.

As far as I'm concerned yes, there are some customers who will be swayed, they are a small percentage of the success rate. The vast majority of customers who need this low ballers speech are not going to be swayed, because of internal issues that brought them to this point in history. They can't afford your services, they don't care about quality, and the #1 reason is they whole heartedly believe that there is no difference in the outcome of a project no matter who they choose. When you stand in front of them going over all this value building they glaze over in about 20 seconds.

This sales approach to me is the same as going out and standing on a street corner and giving your sales speech to 100 complete strangers who are walking by with no interests at all about your product. You will end up selling 1 of them.

The opposite is standing in a show room for a company that has a reputation in the community and advertises, and waiting on 100 customers who walk in the door with the intentions of buying your product or a similar one. How many of those leads will you close?

What's forgotten in all this talk about building your value is the majority of contractors standing in front of their leads are standing in front of leads of the quality of the first example of standing on a street corner. Giving that value speech to that group returns very low success rates. Giving that speech to the 2nd group is hardly even required, since if you've done your marketing and advertising right, have established a brand in your community, the people standing in front of you are already there for totally different reasons.

So yes, the article is good information, but if you want a much higher success rate and want to stop having to give the low ballers speech all the time, get in front of customers who don't need that speech. That's the secret to being successful in this or any business.

This is really good stuff. This is some of the best stuff I have ever read on this forum.

There are all sorts of things a contractor, even a new one, can do to put himself in Mike's "2nd group". Choosing carefully where you advertise is probably the starting point. One of my stipulations about my advert, which appears in a weekly, paid for, newspaper which covers my target area, is that it should not even be on the same page as any advert which mentions price or special offers etc.

John

CBCron · 03-01-2008, 10:25 PM

Mike,

I whole heartedly agree that IF you can get your advertising to pre-qualify the prospects, you've got the game won. That's the approach I use in my business and it works beautifully.

But...

No prospect is going to glaze over when a speech is given to separate yourself from the low priced competitor because no speech should ever be given in the first place.

The recommended sales approach is based on a series of questions. The questions are used to help the customer realize he cares about more than price.

Personally, I've never seen a customer glaze over when he was in the middle of answering a question and explaining his feelings. Customers glaze over when a salesman rattles on, pointing out everything under the sun about the product or service.

Maybe you and I approach sales differently. Obviously, you are a very successful salesman. For me, asking questions is the key to successful selling.

You did express a great point that hopefully several others on this board will read and take to heart. Prospects must be qualified and the sooner the better.