Let The Game Begin.....

Leo G

I have a lady who found me through my website. She is interested in a bathroom vanity. She says she is in Granby, a few towns over. She asked me a price on a certain sized vanity. I told her I would need more info and listed the options and specs to choose from. She writes back with the info and I sent her back a price based on it.

Then she tells me she is from Avon, a richer town. But makes no difference to me, my price is my price. This goes over a few more emails and we narrow down the design and specs. She sounds like she is liking the deal.

The "thee" email comes. The one where she asks what we can do to lower the price and on top of it, maybe do overlay doors and drawers, now she wants it installed instead of just delivered.

I don't get it. Why does it have to go this way. Why do they always try to get something more out of the deal. I emailed back that the price would be the same if everything stays the same. I offered some price reduction solutions. Like changing the interior to birch instead of Cherry, getting rid of the dovetail drawers and replacing them with pockethole drawers. We'll see what becomes of it.

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Chris Johnson

Some people seem to think that every contractor is starving and will bend to their demands. Let it go, let them get burned by someone else.

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Leo G

Oh, don't you worry. My price is my price. If I can't make money on the deal - I just won't do it. I just don't understand what the game is. Why do they think they can do this? It is seriously a game to them. It is a living for me. I really don't like getting website borne jobs. They are always looking for a WalMart price with Ethan Allen quality with a custom product. I guess I don't get it. I don't play the game with others, they tell me the price and I either say OK or no thanks. I know they need to make a living, I will not waste their time trying to short change them. Just frustrating to put work into a nice detailed bid only to have them play along until the end when they all of a sudden think the price should be lower for some mysterious reason.

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naptown CR

I sold a job tonight the first in a while. The client is in the Navy and this is his 5th project with me. Gotta tell you I like Military officers it is yes or no but never maybe. Anyway tonight is yes again. On every project Ihave done for him before he has always beaten me up for a few bucks not much but something to feel he has won. Tonight I figured the job and added a couple hundred to account for some beating up. This is the first time I did that and this was the only time he didn't try to get the price reduced.

MALCO.New.York

Makes up for a time-or-two of beatings in the past.

Feel GOOD about the "Vig"!!!

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silvertree

Right on! I like to hear that.

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BobsLandscaping

Do you know what ethnicity your client is? I deal with quite a few clients that are grad students at WSU or UofI on a foreign student program. In some cultures (I've noticed it primarily in people from Arab/Persian countries) haggling over a price is part of their custom. For example I had a nice family from Nepal, the husband is going to UofI's electrical engineer program. They're renting a house and wanted a sandbox, swing set, and outdoor entertaining area. I padded my quote by $1,000 since I knew the husband was going to want to negotiate. It's part of their culture where he's from. I spent about a hour haggling over the price and then called deal when he reached my unpadded price. He appreciated it and felt good about the whole thing. I got the price and profit I originally wanted. Mostly it's for show. Lots of arm waving, throw a calculator, yell back and forth a little. It's so he can look "alpha male" in front of his family and peers.

Sometimes they're not trying to get something for nothing, in some cultures haggling over a price is to be expected. If your client is an immigrant from one of those cultures it can pay you great benefits to be culturally sensitive and deal with them accordingly. A lot of my repeat business is from these types of people, when they finish school, get a work visa and stay they buy homes and often call me back to do their landscaping.

With Americans I set the price and that's it. European immigrants can go either way. If they're from the old East Bloc they like to haggle down by $100 to $200. Western Europeans seem to like even dollar amounts. For example if I turn in a bid of $850 they say how about an even $800? I've done some work for African immigrants and they like to add in an extra job. Like I quoted a yard clean up for $500 and she asked me if I'd come back the following week and mow the front yard again. Since it was on my route and would only take 15 minutes I said sure. Once you can get a read on different world cultures it's easier to set a price. Just takes a little time to learn.

There are 2 major universities and 1 state college within 20 miles of my house, so I have clients from all over the world. Guest professors, students, etc. It helps to know a little about foreign cultures in my area.

Your mileage may vary.

Crock

Did she forward any pics of herself?

nEighter

that is why he was "firm" with his pricing!

Home Services

First off – full disclosure. We are fortunate to be busy enough that we can turn down the “cheap a**es”. (On pace for our best year ever… go figure).

Second – there are certain ethnic groups that we refuse to work for – more headaches than they are worth.

Third – our industry has already done enough damage to ourselves with “Free Estimates”

Forth – those of you that “negotiate” on your prices – PLEASE STOP. I don’t care if you start high & then negotiate down to your “real” price – it makes us all look like used car salesmen or tin men… not to mention (IMHO) dishonest.

We need to change some of the ways our industry operates. Unfortunately, I don’t believe it will ever happen in my lifetime. With this “supposed” down economy, we will create an even bigger future problems, if we now let customers control the sale & pull us around by the nose!

I can’t wait to read the replies to this post!!!

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BobsLandscaping

I use this to weed out tire kickers. A basic estimate is $50, a design starts at $200. If they're not willing to pony up that, they're not ready for a high end pond, waterfall, deck, outdoor kitchen, etc.

Quote:

Originally Posted by Home Services Forth – those of you that “negotiate” on your prices – PLEASE STOP. I don’t care if you start high & then negotiate down to your “real” price – it makes us all look like used car salesmen or tin men… not to mention (IMHO) dishonest.

I hope this isn't directed at me. Only reason I do it is to accomodate folks that are new to the US. I found that by showing a little cultural sensitivity I get more work. Also it's fun to learn about new cultures.

For instance I have one customer from Japan that's been my client for many years. By learning about the Japanese culture and gardening style I was able to pick up several more clients on their referral. Some of the differences include greeting, yes they like it when I bow. They're also very particular about how the plants in the garden are arranged, trimmed, etc. Also their way of doing business is much more formal. There's the initial meeting where we discuss plans, then a week later I bring by a written estimate for them to consider, a week later we have another meeting to discuss the estimate and I give them a contract to review, a week later we have another meeting where they sign the contract. They're some of my best clients because I make the effort to understand them and their culture. They appreciate it.

Of course I live in an area where there are a lot of foreigners here because of the universities. It's not like that everywhere.

Leo G

I live in America, I do not haggle. If you live here learn the culture. I don't know (or care) what ethnicity she is. My price is determined by formulas I have developed over my career. I know what it takes for me to build and I know when I am not going to take a job. She wanted me to lower the price. But all she was going to give up was inset doors. Which means nothing had really changed. I am still making the same amount of doors, the size is the same. As a matter of fact I see it as almost more work to go that way. I have to make the doors slightly bigger. I have to route a profile on the edge and then sand that edge multiple times from white-wood to final finish coat. I need to use different hinges that I do not normally stock. I was willing to not charge more for this even though it is more work for me. So I offered to use some less expensive materials and joinery. Which would make things go faster on my end and make my material bill a little lighter. That is how you reduce the price.

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J F

I posted this "elsewhere" yesterday Leo, thought you might get a kick out of it...and yeah, I caved...a little


Long read, so hope you're bored

This was the email exchange with a prospect we were supposed to go out and see tommorrow...and yeah, sometimes I can be a little too honest, and tell it somewhat like it is

It starts out with the prospects email this a.m. to swmbo....

____________________________________

To swmbo:

After reflecting on our initial conversation, I concerned about all of the upfront expenses. Your website indicates that there is no charge for your initial visit and we have had other companies provide floor plan designs (not as detailed as your example) and cost estimates (with basic material assumptions) without fees.

I don't want to waste your time tomorrow so I'm inclined to cancel unless you can suggest an alternative.

Thanks.

***xx

_________________________________________________

Hi ***xx,

Thanks for taking the time to write. Swmbo is out at the moment, but I thought I might answer your email (I'm Jay, by the way, nice to "meet" you).

As of late we have started charging a $75 trip/service fee due to the amount of "wild goosechases", so to speak, that we've been on, not sure if it's the economy, but I'm guessing so. Lots of "interesting" people starting to do this type of work lately and for some interesting pricing structures as well.

We have charged a design/estimating fee as well, mainly just due to the need to be paid for our time....I (as owner/carpenter/cad designer) found the need years ago to stop doing "free" estimates as they cost me too much...lol...free is seldom free.

As a business you can choose to do "free" estimates, then charge the clients who do hire you for the "free" time you devote to those who don't hire you...never seemed quite fair, although it is common business practice....so, that's why we haven't done "free" estimates for a number of years as we chose to only charge our clients for the time spent with them, not the time spent with others as well.

I do apologize that the $75 trip/service fee was a surprise to you, but that's why we bring it up in the first conversation.

And please don't think that $75 covers our expenses to make a trip to someone's home, as it definitely does not, but it has helped us reduce the amount of time that is being spent on chasing our tails (technical term).

I've often wondered why electricians/plumbers/appliance repairmen charge $125-200 to come out and take a look at whatever a problem is and write a quote in a couple of minutes...and it's normal operating procedure.

As a (very) small business, we strive to provide the best work/communications/customer relations as we can, but yes, we do charge for our time.....sorry for the "War and Peace", but thanks for reading.

That being said/written, we would love to meet with you to discuss your project with you and hope our service fee does not preclude that from happening. If in fact it does, we do wish you well with your project.

Respectfully,

Me

__________________________________________________ ___

Jay:

Thanks for the follow-up and rationale. I'd like to charge for my sales calls too. I'm not worried about the $75 as much as getting a cost estimate prior to spending $1,000+. If you can frame the cost for me after our meeting tomorrow, then I would like to proceed with our meeting.

I understand the variability in cost can be significant, but once you get a feel for our project can you make an estimate? We are early in the process, although we would like it completed in 8 weeks, so I don't know if our vision would cost $10K, $30K or $50K.

Our budget is ~$20K. So I don't know if we have champagne dreams on a beer budget or if we are on target. If we are way off then we need to reset our expectations and do a cost/benefit. It might mean we wait until our budget reaches our vision.

All we want is a basement that will make us cry with joy like they do on Divine Design...although that might cost extra.

Let me know if you think you can provide a ballpark estimate without the detailed plans. If so, I look forward to tomorrow. If not, then I will need to postpone.

Thanks,

***xx

__________________________________________________ ___________________



Hi ***xx,

Thanks for the well thought-out response, I appreciate it. As far as ball- parks, I do apologize, but without drawings we don't do any kind of estimating...been bit by that more than enough in my early years to know better.

I can tell you we've done basement projects from $45-$110 a sq. ft., or $30,000 - $240,000, but as you can probably see very quickly, that won't tell you much about your project. Every project is custom and unique in and of itself, and we treat it as such.

I don't want to scare you, but if you're contemplating a bathroom and a bar, just for those two alone, you will probably want to revisit your budget a bit...especially if you want something you're going to be thrilled with as you enter the basement, as opposed to keeping the neighbors/in-laws out, due to embarrassment...lol.

If I throw out a ball park, it could be 20,50..or 200% off , without looking through the details (and yes, I feel I'm good at estimating, just not with the winging it part.)

How does this sound? Swmbo will keep the scheduled appointment with you and mrs. ***xx tomorrow. She'll be able to fill you in a little more on our process and about who we are. She'll have plenty of our previous design work and portfolio.

We'll waive the $75 fee, and you and mrs. ***xx can then decide if it makes sense to proceed with the floor plan design stage.

If all goes well, and Swmbo doesn't step on your cat, we would schedule a time to come back out and measure (figure 1.5-2.5 hours), take pictures, etc. and begin the drawing stage.

Let me know what you think, and again, I appreciate you taking the time to flesh this out some more.

Me

__________________________________________________ _____________

Jay:

OK. I appreciate the waived fee and I look forward to hearing more from Swmbo.

It is just my opinion, I'd have to check with mrs. ***xx, but if she does step on our cat...your hired.

***xx

__________________________________________________ ______________________________

Thanks ***xx, I just snorted ice tea on my keyboard :-)

Swmbo will give you a call around 8:00 a.m to confirm with you for 9:00 a.m. I hope you guys have a nice evening and that I get the chance to meet you and mrs. ***xx soon as well.

Me

P.S. I'll make sure Swmbo wears some heavy shoes...

__________________________________________


At least he ended up having a sense of humor, which goes a looong way in my book (if you can imagine that)

Watch, I'll get an email at around midnight canceling anyway


Update:

The meetings still on, so we'll see how my gal makes out...is it easy to get "cat" off your shoes?

Publisher1

If you are dealing with people from cultures where pricing negotiation is the norm culturally (not industry specific) I agree that building in a haggle-factor is the right approach.
Equally, the price/quality trade off can work (less for less).
But most contractors get caught in the price competition game and "low bid wins the job" mind-set because they are chasing and competing with far too many others for the same work. This is the space of the much-loved leads services.
Consider raising your prices and allocating some of the added revenue to marketing and client relationships/added services and surprise extras (and some to your own profit).
Test the idea. If you raise your prices 10 per cent without increasing your costs, will you lose proportionately that much business? Or will your margin increase -- net profit -- be so much better on the jobs you retain that you are overall making more money with less work and stress?
(Of course, this is on the selling side. On the buying side, I'm getting a top notch website built for a new project for $75.00. And I'm sharing the information about how I found that site to my clients who have been paying thousands more. Costs nothing to share, and allows me to 'hold' my prices as clients really sense they get value by working with us.)

Home Services

The replies above are exactly what I expected.

We have found over the years that the ethnic "hagglers" (even if we did get our price) are also the biggest pain in the a**. There is too much good & profitable business in our area to have to take "headache" jobs - therefore, we pass.

If I were to move to a middle eastern or asian country, I would learn and comply with their culture - they need to learn ours IMHO.

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PGD

Home services hit the nail on the head with the earlier post it's more or less what I was thinking when I read: "I padded my estimate by $1,000". you hacks make me sick! your behaving exactly like the mall jewelry stores with their 70% off pricing! you raise the price and then lower it at the drop of a hat to give the impression that you saved the person money!

And you fail to see the hypocrisy of posting how much you hate it when people haggle! Your exactly why people (of ANY culture) think they need to haggle!

Stick to your price and your principals or don't complain in public about hagglers while dealing in their methods....You hacks! and don't let me catch you buying a used car one day trying to negotiate the price with the salesman you lost all your "negotiating" privileges when you complain about it in public.


By the way, I get all our Jewlery at Ben Bridge, because they NEVER have sales (I've purchased well over $30,000 there in the last 15 years)

neolitic

You're getting plumbing advice
from an airline pilot?

http://www.contractortalk.com/attach...umbing_job.jpg

I'd be watching the ad hominems.

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Crock

Mr T is on CT

PGD

Funny I didn't know that working on your OWN plumbing at home makes you a HACK! I guess their are RETARDS and Hacks in this place!

as for the Mr.T reference : I was sure to write; "Our jewelry" my sons both got a Rolex watch for graduation from collage and I wear one myself and my wife has the rest of the balance, since her wedding ring was only a hundred bucks almost 36 years ago.

Nothing about the hypocrisy of lowering prices and complaining about hagglers huh? then I guess you agree with them.... I Pity the fools!

neolitic

Non impediti ratione
cogitationis conloquium
currus.

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