By Tom Grandy
Trades companies today sell in a variety of ways. Sometimes it’s the owner themselves in the sales role. Other times the techs are doing the presentations while larger companies tend to have full time salespeople. No matter who is in front of the customer there is a high probably that at some point, after the presentation has been completed, that the potential customer is going to request a lower price. I guess we have the automobile industry to blame for that. Who pays sticker price? No one, especially since Americans have been bombarded their entire life with sales. There are special holiday sales, good customer discounts, employee discount pricing and the famous savings of thousands of dollars at year end for the “Have to make room for new inventory sale!” So why would anyone pay full price?
There is a phrase I have heard and reflected on for many years. The phrase is “Just because you can, doesn’t mean you should.” The calculated price provided the customer should cover all costs while generating a reasonable profit. If this is true, why negotiate and reduce your profit? If you negotiate, word will get around, like the automobile industry, that your initial price is not the real price!
I just finished working with a 30-old company that builds custom cabinets for very high-end customers. Most of their sales are through designers, architects or directly through general contractors. They have built a reputation of doing top quality work, doing it on time and ALWAYS backing up their work. That is reflected in the fact that nearly all their work comes from word of mouth recommendations. Their communication with their customers exceeds all expectations. Their word is their bond…old fashion perhaps, but refreshing in today’s world.
Their salesman, we will call him Jack, shared a recent experience with me. He had made his presentation to the general contractor which was $78,000 for all the cabinets in the house. He had worked with this contractor for many years providing quality work and outstanding communication. The contractor told him he had another bid for roughly $50,000. He then asked if he would lower his bid. He refused, telling him about the quality of work, timeliness of their installations and responsiveness when minor problems popped up. The general contractor then told him if he would drop his price $5,000 the job was his. Jack refused. The contractor told Jack he could not believe he would walk away from a job that big over $5,000 dollars but Jack did. Guess what? The general contractor called him the next day and accepted the bid at the full $78,000 price.
Now granted he stood his ground because of the reputation the company had earned for over 30 years. If your company provides the kind of quality of work this contractor does, don’t lower the price… unless you want to negotiate price with all your customers for the rest of your life.
Knowing that the company MUST charge $XX.XX/hour to generate a profit also provided a bit of extra confidence when speaking to the potential customer. As the company grows, hourly rates are “forced” to increase. The problem lies in the fact that most techs and/or employees do not understand why those rates need to increase. They already think you are ripping off the customer while getting rich yourself. There is good news. We have a program entitled “Why do we need to charge so much?” walks the viewer through the process of setting proper hourly rates. When tech/employees understand “why” you need to charge what you are charging they tend to stop underbilling the customer. This program is normally $99.95 but this month it’s featured as the Website Special for only $79.95. Order today! As always, our products carry a 100% satisfaction guaranteed or you money back. If for any reason you don’t like the program, simply return it for a full refund.
