How often have you heard “Your price was higher.” as the reason why you didn’t get the job? An experienced sales coordinator recently told me that the customer gives that as their reason for choosing someone else over 90% of the time. So, what can you do about that? Here are three answers.
Fact: The competitor’s price is lower for the same products.
No matter what you do, there are always going to be “cheaper” competitors. There are plenty of reasons for that, including they don’t know how to price a job, they don’t know what their costs really are, they don’t have the same overhead you do, they owner is doing the selling and doesn’t have a sales commission, and more.
Solution: Don’t offer just products.
You know from experience that just replacing the equipment will not solve problems related to incorrect system design, shoddy installation practices or substandard materials. Knowing this, engage your customer in a discovery process by asking questions, looking for clues and taking measurements to determine what else needs to be fixed before replacing the equipment. Include these remedies in your choices proposal so you can’t be compared to others. Be higher…and have good reasons for it.
Fact: You didn’t sell yourself.
George Burns, the comedian, once said, “The secret to success in life is sincerity, once you learn how to fake that you have it made.”. If the customer doesn’t like you, or at least believe they can trust you, they ain’t buying.
Solution: Care about the customer.
Sincerity can’t be faked, as you know. If you’re reading this, you likely know that your success comes from helping others. Just be yourself and let your sincere interest in understanding their needs and your willingness to help them solve their problems come out. Don’t be afraid to tell them that you care.
Fact: You can be competitive.
As a larger contractor you have buying power and other business efficiencies that help you keep your costs in line. Even with higher overhead and sales commissions accounted for, you can still offer your basic equipment, professionally installed, within 5-10% of the low-priced competitors.
Solution: Explain what they don’t get for a 5-10% difference.
If your bottom choice is within striking distance of the competitor’s “bid/estimate/quote”, then you can legitimately compare the two. Focus on the non-product differences, such as installer training and quality, company guarantees and warranties, online reviews from satisfied customers and use those to support the small difference in “price”. This way you are selling a few hundred dollars difference, not focusing on the total amount.
My good friend David Holt, NCI’s Director of Business Training and Coaching, shared his thoughts on this subject with me. I’ll suggest that how you say this is as important as the words themselves, but I love the way it makes the point. At the kitchen table, or later on the phone, when the customer states or implies that a competitor’s lower price is their primary factor for making a decision, you might reply, “Our price reflects everything you’re getting, and I’m sure theirs does too.”
By taking the time and consciously making the effort to show the customers you sincerely care, to engage them in discovering problems that others don’t find, and still presenting a competitive solution with your other 2-3 other upgraded choices, you will reduce the number of customers who believe that “price” the only deciding factor.