Selling To Price Driven Customers

 
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Old 02-24-2017, 08:53 PM   #21
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Re: Selling To Price Driven Customers


id give up.....customers have a budget and an idea....i have never found them to up their budget....and typically not change their idea...they just keep shopping until they find someone who will do it for what they have.....this is what sidejobbers are for...i used to get angry over side jobbers...until i realized they customers they take were never going to be my customers from the start.....

another tip someone gave me which i believe in....in your personal life--are you a price shopper or someone who buys based on quality/service....i used to sell service/quality, but in my personal life be cheap/frugal.....when i changed my personal life choices i found it easier to understand my customers...because i was in the same basket as they are....

when i started my business i would bid and bid and bid...id win 1 out of 10...i was horrible....then i changed my ad to read DO IT RIGHT THE FIRST TIME.....amazingly the 80-90% just went away....i won over 50% of my bids and greatly reduced bid time.....i also listen for keywords from potential customers...some dont realize it but they bring up price in every sentence...its so on their minds they cant see anything else....they say the wrong thing i give them a rough $ on the phone and wait for the crickets chirping on the other end...then they say- oh good bye.......spending time with people who will never be your customer is taking time away from real customers and also raising your prices (if your smart enough to include bid time in your hourly wage--which most smaller companies dont)

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Old 02-25-2017, 07:33 AM   #22
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Re: Selling To Price Driven Customers


We usually pre-quality people thoroughly but somehow it wasn't as thorough with this customer as it should have been. Usually we get a budget before I even go out to their house unless it's not realistic. I also have a couple of customers who don't have budgets because they want what they want and can pay for it.

I quit messing around this year. I now charge for proposals. I give free estimates over the phone if it's possible, average cost per sq ft or per project, that kind of thing. I'll meet with them to get more information, talk about some ideas and refine the estimate if I can. At that point if they want to go further and talk hard numbers they're paying for it.

So far I haven't had any push-back. If a customer puts up a fight about a proposal fee even after I've explained it that tells me either they have no intention of doing the project or they're just looking for that 3rd estimate to help drive down costs for someone else.

I'm seeing companies offering $2000 signing bonuses for hiring carpenters in my area. Skilled trades are becoming more rare as people are too lazy to do anything but sit on their phones and Xboxes. I'm quite happy about that.
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Old 02-25-2017, 07:52 AM   #23
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Re: Selling To Price Driven Customers


congrats on charging for proposals


i dont charge for a bid, but im getting close to doing it...even charging a small fee of $50 would eliminate people who just collect bids.....im probably going to start doing that
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Old 02-25-2017, 09:49 AM   #24
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Re: Selling To Price Driven Customers


I charge roughly 1% or less of what I expect the project to cost. The proposal fee gets credited toward the project total if they sign within 30 days. Longer than that I'd have to re-estimate it to some degree, I'd probably credit 1/2 of it within 60 days.
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Old 02-25-2017, 11:19 AM   #25
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Re: Selling To Price Driven Customers


I really don't care for the "free bid" stuff.

I once got a "free bid" from an electrician.. The electrician looks at the place for about 5 minutes, goes to his brand new shiny truck and comes back with an estimate on a ticket the size of a restauant bill. He scribbled on it " Wire building $7,760.00."

That was it. I chit you not.
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Old 02-25-2017, 01:21 PM   #26
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Re: Selling To Price Driven Customers


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I charge roughly 1% or less of what I expect the project to cost. The proposal fee gets credited toward the project total if they sign within 30 days. Longer than that I'd have to re-estimate it to some degree, I'd probably credit 1/2 of it within 60 days.
That's a great approach putting a diminishing time-frame... getting money instead of none also makes them less likely to want to part with it...
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Old 02-25-2017, 09:05 PM   #27
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Re: Selling To Price Driven Customers


What about the clients who are doing their due diligence and get 2 maybe 3 estimates? I don't mind bidding on those, but if you charge an estimate fee, you won't get those calls.
I do agree though, after a rough estimate you need to charge. Two years ago I started doing no charge estimates, and then proposals if they wanted to proceed. I charge a fee that is refunded on the final invoice at the end.


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Old 02-25-2017, 09:37 PM   #28
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Re: Selling To Price Driven Customers


I have started charging an estimate fee which is refunded if work is completed for anything requiring me to come on site.

Helps weed out tire kickers as anyone serious will have no problem knowing that money will be applied to the final bill

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Old 02-26-2017, 08:14 AM   #29
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Re: Selling To Price Driven Customers


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Originally Posted by sparehair View Post
. Drop the price a grand and put the other grand in your pocket.

Any time you have a cheapskate use their personal inclinations against them to increase your profit by reducing scope and materials alot and reducing cost a little.

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I did that last year. Worked pretty good. I threw in $800 worth of gutters and a shingle upgrade that cost me 4 bucks a sq. The perceived value was much higher than my actual cost
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Old 02-26-2017, 02:35 PM   #30
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Re: Selling To Price Driven Customers


It's amazing when push comes to shove how your sales will increase by how you're willing to drop your price.

However if you drop your price your never making the money you should and you're running around in circles it's a vicious cycle.

I was recently told something, nothing new but for some reason it resonated with me lately. And that is that some guys say the best they do is selling one out of five. Hell I probably sell two out seven but...

Certainly easy to say you can't win them all but for me I have always tried to win them all and with that comes disappointment.
What we/I should concentrate on punching out more thorough estimates with less effort in order to grab that sale. It's hard to keep all that in perspective when your hustling your ass off it's exhausting but I know it's something that I need to work on.

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Old 02-26-2017, 03:32 PM   #31
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Re: Selling To Price Driven Customers


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What about the clients who are doing their due diligence and get 2 maybe 3 estimates? I don't mind bidding on those, but if you charge an estimate fee, you won't get those calls.
I do agree though, after a rough estimate you need to charge. Two years ago I started doing no charge estimates, and then proposals if they wanted to proceed. I charge a fee that is refunded on the final invoice at the end.


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If they're doing their "due diligence" in getting 2-3 estimates, great. That's an opportunity for you to educate them on the differences in companies, processes, materials, etc. Unless you're very familiar with the industry there's no way a customer will be able to adequately compare estimates. Most customers don't "bid out" projects. Sure they might have a list of what they want, but competitive bidding requires a lot of details they usually haven't even thought about yet.

An estimate is for finding out if the project is within their price-range. Beyond that they should hire you based on you so it's your job to steer the discussion to that. Unless you can only compete on price, but that hurts the entire industry, not just you. It's a race to the lowest price and everyone looses. You don't make enough to stay in business, they end up getting garbage work and materials that fail prematurely.

A lot of people have no idea how to hire a professional. Everyone has heard the 3-bid rule but they don't know what it really means.
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Old 04-12-2017, 01:37 PM   #32
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Re: Selling To Price Driven Customers


One mistake many make is to lump all "price objections" into one bucket.

There's a big difference between "I can't afford that" and "I didn't think it would cost that much". Likewise, how you handle each should be different.

I posted this several years ago, but perhaps it still has helpful content for you. It was my approach on handling each of the different "price" objections... in a one-call closing approach.

Hope this helps!
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File Type: pdf KillingThePriceObjection.pdf (36.7 KB, 78 views)
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Old 04-16-2017, 02:49 AM   #33
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Re: Selling To Price Driven Customers


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I didnt start out this way. The customers made me who I am.

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That is brilliant
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Old 04-17-2017, 09:08 AM   #34
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Re: Selling To Price Driven Customers


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Cheapskate customers cause more headaches, even if you get the job. Even if you've spent the time to put together a real bid, you're better off cutting your losses unless you really need the work.
You said this really well, except I would just take away the "unless you really need the work". I hear this all the time when the contractor takes work and is already not making much, and then one thing goes wrong and they have a nightmare and just break even or lose money. Then there is no time to pursue new opportunities. There is no reason for a contractor to wake up to do work to break even, or worse yet, lose money. And to make matters even worse they will lose money and most likely not even get a review. Use the advice to walk away.
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Old 04-21-2017, 06:58 AM   #35
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Re: Selling To Price Driven Customers


Received this email last night. Interested to see how others would respond.

"I am looking for a free in home estimate for a new construction 5x8 basement bathroom installation. There is a 3" stack nearby and hot & cold water lines to tap into as well. Three walls are already in place. I have interviewed multiple contractors and have gotten familiar with the process and costs associated with this job. If you're company would like to provide a free estimate for the job I would be happy to have someone visit my home to size the job up. I am okay with getting all materials for the job ahead of time (including tub, vanity, mirror, toilet, tiles, etc.) I am looking for a contractor that will agree in writing to a start and end date for the project. I cannot have the project linger on for 2 months. My town's inspectors (plumbing, electrical and building) all work 40 hour weeks Monday to Friday and go out for inspections everyday so they will not slow the project down. Also, I am looking to give no more than $1000 up front and will pay as the project is being completed with a final 50% payment due on the day the project is completed. As you may already assume, I have had bad experiences with contractors not finishing their work or becoming impossible to contact, so I will not give too much money too soon ever again. I am looking for an honest, diligent and scrupulous company to complete this job this summer. I am a high school teacher and am off in the July & August months. If you're company would be interested in this job kindly call me at ***-***-**** or e-mail me back here as soon as possible. Thank you in advance for your time."
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Old 04-21-2017, 07:07 AM   #36
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Re: Selling To Price Driven Customers


Quote:
Originally Posted by NJ Contractor View Post
Received this email last night. Interested to see how others would respond.

"I am looking for a free in home estimate for a new construction 5x8 basement bathroom installation. There is a 3" stack nearby and hot & cold water lines to tap into as well. Three walls are already in place. I have interviewed multiple contractors and have gotten familiar with the process and costs associated with this job. If you're company would like to provide a free estimate for the job I would be happy to have someone visit my home to size the job up. I am okay with getting all materials for the job ahead of time (including tub, vanity, mirror, toilet, tiles, etc.) I am looking for a contractor that will agree in writing to a start and end date for the project. I cannot have the project linger on for 2 months. My town's inspectors (plumbing, electrical and building) all work 40 hour weeks Monday to Friday and go out for inspections everyday so they will not slow the project down. Also, I am looking to give no more than $1000 up front and will pay as the project is being completed with a final 50% payment due on the day the project is completed. As you may already assume, I have had bad experiences with contractors not finishing their work or becoming impossible to contact, so I will not give too much money too soon ever again. I am looking for an honest, diligent and scrupulous company to complete this job this summer. I am a high school teacher and am off in the July & August months. If you're company would be interested in this job kindly call me at ***-***-**** or e-mail me back here as soon as possible. Thank you in advance for your time."
Well, in my personal opinion, I would leave this one for the wolves. Mainly because the client seems too clued up on the process, and this can sometimes make them super difficult as they think they can argue with you on what's best for the job. Also, I have never had a good experience with someone telling me the terms of payment for the work I will provide them, and that's in the contractor and online industry.

I would thank them for contacting and considering you, tell them you unfortunately only work on payment system *** and if they would be happy to work under those terms, you would be more than happy to come and see them. Always offer a work service, not a slave service.
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Old 04-21-2017, 04:01 PM   #37
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Re: Selling To Price Driven Customers


Quote:
Originally Posted by NJ Contractor View Post
Received this email last night. Interested to see how others would respond.

"I am looking for a free in home estimate for a new construction 5x8 basement bathroom installation. There is a 3" stack nearby and hot & cold water lines to tap into as well. Three walls are already in place. I have interviewed multiple contractors and have gotten familiar with the process and costs associated with this job. If you're company would like to provide a free estimate for the job I would be happy to have someone visit my home to size the job up. I am okay with getting all materials for the job ahead of time (including tub, vanity, mirror, toilet, tiles, etc.) I am looking for a contractor that will agree in writing to a start and end date for the project. I cannot have the project linger on for 2 months. My town's inspectors (plumbing, electrical and building) all work 40 hour weeks Monday to Friday and go out for inspections everyday so they will not slow the project down. Also, I am looking to give no more than $1000 up front and will pay as the project is being completed with a final 50% payment due on the day the project is completed. As you may already assume, I have had bad experiences with contractors not finishing their work or becoming impossible to contact, so I will not give too much money too soon ever again. I am looking for an honest, diligent and scrupulous company to complete this job this summer. I am a high school teacher and am off in the July & August months. If you're company would be interested in this job kindly call me at ***-***-**** or e-mail me back here as soon as possible. Thank you in advance for your time."
Three red flags...
1. He's already got 3 estimates and wants more... what's wrong with the first three?

2. Wants definitive start and end date under the assumption he knows his towns inspectors schedules and yours especially during busy season...

3. Wants to set the terms on how your business should be compensated according to his preferences/past experience...
Those three alone would garner a...

"We appreciate you contacting our company to consider us for your project. Most of our work comes to us via referrals from previous customers who are very satisfied with our work and process, however, based on the variables you presented in your initial request, we do not feel we are a match for your project at this time. While we appreciate you may have a bad experience in the past, we have a process we follow regarding scheduling and payments for services that serves both our customers and our company which we do not deviate from and seems to be at odds with what you are looking for in a company for your project. This is compounded by your request coming during the busiest time of the year. We wish you luck in matching your parameters with a company to do your project, and thank you for your inquiry."

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Old 04-21-2017, 07:24 PM   #38
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Re: Selling To Price Driven Customers


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Three red flags...
1. He's already got 3 estimates and wants more... what's wrong with the first three?

2. Wants definitive start and end date under the assumption he knows his towns inspectors schedules and yours especially during busy season...

3. Wants to set the terms on how your business should be compensated according to his preferences/past experience...
Those three alone would garner a...

"We appreciate you contacting our company to consider us for your project. Most of our work comes to us via referrals from previous customers who are very satisfied with our work and process, however, based on the variables you presented in your initial request, we do not feel we are a match for your project at this time. While we appreciate you may have a bad experience in the past, we have a process we follow regarding scheduling and payments for services that serves both our customers and our company which we do not deviate from and seems to be at odds with what you are looking for in a company for your project. This is compounded by your request coming during the busiest time of the year. We wish you luck in matching your parameters with a company to do your project, and thank you for your inquiry."

Pretty much my reply, along with the job being not the right fit due to it's size. Imagine all that for a 40 sf basement bathroom!

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Old 04-21-2017, 09:09 PM   #39
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Re: Selling To Price Driven Customers


You guys are WAAAAY to nice, I wouldn't even dignify that inquiry NJ Contractor received with a response. Lack of respect for your service isn't worth the time I just spent writing this post to respond to.
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Old 04-21-2017, 10:53 PM   #40
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Re: Selling To Price Driven Customers


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congrats on charging for proposals


i dont charge for a bid, but im getting close to doing it...even charging a small fee of $50 would eliminate people who just collect bids.....im probably going to start doing that
i love this thread as having been in sales I can relate to all of it. But this is a great thought.
I always put the price for my time to bid in all my bids so even if I win it then I'll still collect for it. If it ever comes up in conversation then I'll just be honest and say of course I get paid to sit around and think. Otherwise I'd only get paid half salary for a full time job.

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