Apples To Apples Price Match

Nathan

Does anyone here offer an Apples to Apples price patch?
I've considered offering one but I'm not sure if its a wise decision. We are a very professional company and impress most of our customers. I would say that the only reason someone would not use us is if our price is too high.

I thought offering an apples to apples price match would help people understand why others prices are lower and then give me the chance to match a lower price if someone does in fact beat me.

The danger comes in when my competition doesn't understand how to bid a job and sometimes they mess up. I guess I was thinking of offering a way out by saying we will match the price or give them $25 or $50... something like that.

Thoughts?

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Nathan

"He is no fool who gives what he cannot keep to gain that which he cannot lose." - Jim Elliot

hatchet

That's just plain silly
I might provide them with a sheet where they can match prices apples to apples. This will benefit you more than losing money. If your estimates are detailed - you'll have an upper hand right off the bat. Instead of a numbers game it becomes an appearance issue. You appear to be more detailed, you appear to have covered more (and most likely have). But to price match is just waiting for someone to come and along and cut your knees out from under you. If you offer the price match and have an out clause - then it looks like you're trying to pull the wool over their eyes. I'll match any price around unless it's too much - trust has been lost.

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Rich
WIT Construction Co.
Superior MT Contractor

Grumpy

Nate,

You may consider offering an apples to apples price match as a marketing gimick. What I mean is tell the customer you will match any price of any other written estimate. When they show you the other written estimate you will be able to pick it apart and let the customer know what youa re doing that is better and that the comparison isn't apples to apples.

Personally I prefer to not advertise this because advertising "low prices" brings in a type of customer who is a price shopper and this type of person is not my type of customer.

Word to the wise: In your marketing you should include some kind of out clase so that you can tell the customer, when it gets down to it, that the price simply can not be matched. This prevents you from being locked in and a customer having recourse if you decline to do a job for a loss. Your out could simply be such as the following:

We will match any price guaranteed!*


Acceptance of price matching guarantee varies from case to case and must be accepted by company management.

Teetorbilt

I guess that if you're really hungry it works. Somehow I always picture Glass' 'soup kitchen' guys when I see the ads 'We'll beat all others prices'.
After seeing one of these guys proposals on a kitchen table, I've been tempted to really lowball just to make the guy eat his shorts.
I don't think that a reputable company should have to stoop to this. Like Grumpy said, sometimes it's just best to walk away.

Nathan

I guess I'm not wanting to be the low ball guy. I'm just trying to point out how these guys aren't offering what I'm offering.

I guess a contractors check list or something like that is best.

I'm just sick if getting beat by people who don't use good paint or skip important steps on a job.

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Nathan

"He is no fool who gives what he cannot keep to gain that which he cannot lose." - Jim Elliot

hatchet

You bring up a good point there Nathan - quality of materials can be a selling point too. Instead of saying Paint Materials in your proposal say Polo Products (or whatever good paint is) and include a brochure on their paint. Most of the better companies have some good marketing brochures that they'll give you. Tie that with your comparison checklist and most "smart" people will be able to see the difference. The others, as grumpy and teetor pointed out, aren't the client you want anyway. Include another sheet with your process if you feel it's different enough from your competitor.

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Rich
WIT Construction Co.
Superior MT Contractor

Grumpy

If all that keeps happening is that you are losing jobs to low ballers than I have two comments, and you are probably not going to want to hear either.

A) You are marketing to the wrong demographic. Stop marketing to cheapo's and start marketing to the type of person willing to pay a little extra for quality.

B) Your salesman is not doing his job educating the customer WHY the price is higher before the price even comes up.

Mr. Customer, let me tell you about the little differences between Pro Painters and many of the others companies that work this area. It's very easy to take short cuts and cut corners on little things; I think that all though these differences are little they all add up to be a big difference in quality when you add 'em all up at the end of the job. And these differences are...

Nathan

Well, I just want to win all my estimates. I have a 57% closing rate which I know is pretty good. Most people see things our way.

As far as advertising goes. I have a lot of work to get things where I want them. I would like to get about 6 leads a day and its hard to generate that much volume. So, I tap into every advertising venue possible.

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Nathan

"He is no fool who gives what he cannot keep to gain that which he cannot lose." - Jim Elliot

Teetorbilt

Nathan, I get about 3 leads a day, most of which I can nullify over the phone.
Make yourself desireable and you will be doing this too.

Mike Finley

Offering some kind of wording about price matching is a marketing tool not a negotiation tool. You would be smart to take advantage of it. Don't look at it as a means that will always end up with you negotiating your price lower, that isn't what it is for. (That's what the customer thinks it is for, however the art of marketing is to get the customer to call you for his agenda and flip him to yours).

Look at it as a means to expand your access to more estimates without increasing your advertising expenses.

These will work to your advantage if you look at them as an opportunity to show a customer how you and the estimate they already have are different. Pointing out the differences in materials, techniques, warranty or quality and showing the weakness in the job they will be getting if they go with the estimate they are showing you. This is an opportunity for you to upsell them to the price you would have given them anyways and be able to justify it. The idea is not to match the price of the other estimate, but upsell them to yours. As was stated the out is that you will never have to match a price because you will never be matching apples to apples, it will always be a case of apples to oranges.

Grumpy

Nathan, you are closing 57% and still complaining? Wow. I am not doing that well and very content with my ratio.

In my book, if you close 67% of your estimates you are a PERFECT salesman. Let me explain. 33% you are gonna win just by luck, maybe you are the only bidder. 33% youa re going to lose just by chance, maybe the job never gets done. The remaining estimates (34%) you will need skill to close.

Mike I agree with you that it is definetly a marketing tool more than anything else... but I disagree that it is a good one. The reason I think it is a bad marketing tool is because it will attract a certain type of customer who is only concerned with price. Yes some of these customers can be closed at higher prices, but it's going to take alot of extra work.

Some are just price shoppers and respond to adds advertising lowest price and DO make buying decisions on lowest price. Any time spent on the price shoopers is a total waste of time. It doesn't make sence to me to attract price shoppers then try to convert them when I'd rather attract quality conscious customers and be dealing with my preferred customer type from start to finish. My job will be much easier and productive.

Grumpy

I knew a guy who would tell customers when they would call for an estimate "Get two other estimates, then call me. I wills top out and match the lowest."

Well he'd go out, measure up, then ask to see the other estimates and match the lowest price. He went out of business within two years.

Mike Finley

Yep, there is no doubt that you run the risk of pulling in some additional customers who may be heavy price shoppers. But that is just it you run the risk of pulling in additional customers, additional customers that you wouldn't be pulling in for no extra advertising money.

That's the good and the bad, the good heavily out weighs the bad, since the good will put more money in your pocket when you close a percentage of these additional customers at your normal prices, the bad can be easily managed if you have a bit of experience with pre-qualifying or know your customer base well, if you are devoting too much time to mutts the problem isn't with the mutts but with you for not being able to limit your exposure to them and wasting your precious time. I'm not scared of a customer being a price shopper and that somehow effecting me negatively, I can control my financial exposure to them by saying "no, thanks, goodbye.", theoretically all the while laughing yourself to the bank with the new customers you closed at your prices. It's all about managing and controlling the leads.

Teetorbilt

My approach is that I do not want to be one of the 'rank and file'. I offer superior services to those that can afford it.

PipeGuy

My take is that price = quantifiable costs + perceived risk (profit). If a potential customer can't do something to lower one or the other, I can't do much to lower the price. I've always been offended by the 'We'll match any price plus refund 10% OF THE DIFFERENCE' policy. BFD! With that and $0.50 I can get a cup of coffee.

Grumpy

Mike I guess my point is this... if you want to catch a vegitarian you use a carrot and if you want to cath a carnivore you use a steak. All I am saying is this: I would prefer too use a surgical razor on marketing to my demographic than use a butchers cleaver on a large audience and hope my dempgraphic is part of that audience.

I think the "price match" tactic WILL make the phone ring, but it wouldn't e the kind of people calling me that I would want to call me.

Mike Finley

Yep Grumpy, I would agree, that is the ultimate golden chalice or holy grail that we would all like to attain.

By the way using internet lead services exclusively isn't that about the opposite of what you are accomplishing now? ie - surgical razor, aren't the lead services basically exactly the butcher cleavers you are talking about?

Keep one thing in mind, because you have a tendency to zero in with microscopic precision on some aspect of the discussion that isn't even being discussed.

When I am referring to the benefits of a "meeting your price strategy" I am not by any means referring to that strategy being the cornerstone of your marketing. I'm not talking about running ads that shout price matching to the heavens to lure customers, which sounds like what you are thinking since you are scared you are only going to attract those types of customers. Quiet the contrary, I am only referring to offering that technique as a suppliment to your current marketing, which if done properly should bring you some additional shots at some customers you would not be talking to, not by any means drastically changing the target or demographic of your current customers.

The perfect example to how this benefits you was something that happened to me a few months ago.

I got a call from a potential customer say on a Monday and set an appointment to look at the job for Wed. On Monday evening the customer called me back to say they had to cancel our appointment because they had made a decision with somebody else already. I responded positively that that was fine, however you know that I would still be happy to look at the job because I would match anybodies price but usually I never do because I always seem to beat everybodies prices right off the bat no matter what. (Is this true? Hell no. That is the marketing point, it is marketing to get the appointment by playing to the customers perceptions) I continued with I would be happy to take a look and at the worst all you would be out was some extra time and maybe the worst that happens is that after you have my estimate and if it is higher at least at that time you would know for sure that you made the right decision to go with the other guy.

I met with the customer and he shows me the project and shows me the other guys estimate. How hard do you think it was to point out every little detail about the steps of the job and ask the customer if the other guy had included that in his estimate? By the time it was over the guy was so confused as to what he was really getting for the money with the other guy and was so positive at what I was giving him that he hired me and paid more than then he was going to pay for the other guy. Was the other guy doing everything I was going to do? Probably, who the hell knows, nobody details every miniscule thing such as using this type of screw over this one, but having the chance to tell the customer about it made all the difference. That was a "price match" customer that I got only because I offered him the "price match" marketing ploy, and I didn't match anybodies price in the end. And if in the end the estimate he had was so low and there was no way to convince him that he needed to pay more for me to do the job, I would have simply walked away from it.

I know where your fears are coming from. But keep in mind I am not referring to running some value coupon ads or val-pac stuff with "PRICE MATCHING" sprawled out all over it, because any idiot could figure out that you are going to get a bunch of customers who are heavily price shopping. I'm not saying to go after those types of customers, but be able to take advantage of the totally under valued power of the price match marketing gimic to increase your exposure to additional leads.

Don Benham

I remember typing out a response to this but must not have hit submit hard enough. Basically, if you offer apples-to-apples you're just another apple.

Even using identical materials, amounts, etc, when I come up with a price and present it, that's my price for that job. If I match a lower price then we have to change the scope of the job. That a whole 'nother basket of fruit.

When a customer starts talking about money and how they'd like to spend less, you have to change the focus of the conversation to quality and trust.

who do they trust to do the best job for their money?

Not the best money for the job. When you've presented yourself as that guy they can trust the most, the guy that will absolutely give them the best possible service that will last for years to come, price becomes less of an issue. They realize they'd have to be off their rocker not to use you.

respectfully
Don

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Benham Flooring
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Look, I know the voices in my head aren't real, it's just that lately they've had some really good points.

Grumpy

Mike I don't think that the lead services are a buthers cleaver in any way. I have the ability to accept and reject my leads. I have the availibility to target various services in specific areas (zip codes). I have the ability to increase or decrease my budgets as I see fit. I think you can get no more surgical than the lead services I use.

I feel if you are going to run adds you should run consistent messages repeatedly. This type of marketing campaign will reap the best rewards, regardless of message. Therefore if I were to run an add claiming to beat price once, I would do it again and again to the same audience. The same holds true for any message I am trying to convey.

I don't have the time to waste. If a customer tells me they already hired someone. I thank them for their time. I update their record in my mailing list and I contact the next potential customer. Regardless, you told a specific prospect that you would match price. Who knows what attracted this prospect to you? If you had a marketing campaign saying "Lowest price. I beat all prices." then you are going to get people calling yout hat expect you to beat all prices.

It is never hard at all to point out all the little differences in an estimate which is why I suggested above, that if someone asks you to match price; the first thing you do is ask to see the other estimate.

This is exactly what I thought you meant... which I do believe was Nate's original question.

Yes by all means if a customer asks you to match price, pick apart the competitors estimate, but I'd never volunteer to do it or advertise it in any way.

Mike Finley

Unfortunately, once again we are having one conversation about two different subjects and only one of us is aware of it. So I will just leave it as it is.