More Q&A from our Last Two Webinars
Q: Do you believe we should be prepared with some sort of a discount or special offer while selling in the home?
A: In my opinion, every home improvement project should be structured from a price list which ensures:
- Every customer with an identical project is priced the same, inclusive of special conditions which may be present on the job which will have to be priced individually
- A price which also ensures a profitability for your company
- A price which takes into consideration marketing costs (any advertising, shows, events, showroom, signage, etc.)
- Consideration for selling costs. That means, even if you are a small company, your selling costs (respecting your time and efforts) should be factored into the price
- The price must contain a “net” profitability. Once you have established this, it is possible to give price considerations and conditions which do save you money, yet do not affect your net profitability.
Here’s an example, suppose you have 10% marketing costs figured into your pricing. You are working on a job and you develop 1 or 2 prospects nearby where you can move from the completed job to the new job, thus saving time and money. Many companies also offer payment plans called “12 months (or more) same as cash". This means that you will be offering an incentive to your customer, getting them a loan to pay you for the job and then not having to pay that money without interest to the bank for a year or more (12 months same as cash). But your company does pay for this. You can also offer special inducements (where the size of the job warrants it) for an extra window or door or something similar related to the kind of work you are performing.
So to answer your question - - we would recommend it.
Q: You recommend price conditioning during the demonstration. 2 questions: What do you do if they say your price conditioning is "too much"? Why wouldn’t you price condition them on the phone?
A: Let's deal with question #2 first. For almost all home improvement products, you have no idea how they fit the project, nor are you able to evaluate the “value system” of a prospect whom you haven’t encountered face-to-face. Giving prices over the phone (ballpark or otherwise) is a waste of time and unfair to both buyer and seller. Some companies believe they can “low-ball” a price over the phone, get an appointment and work their way up. This often offends prospects and demeans the credibility of the company. You and your personnel need training on the language to use rather than simply say "We don’t quote prices over the phone."
Moving onto the first part of your question, price conditioning is done long before you quote a price. As an example, if I show the prospect 2 components of a window (roofing material, siding, etc.) and I explain how one is made better than the other, one lasts longer than the other, one is easier to maintain than the other, etc. etc. and I ask “Which of these would you prefer?” the customer will normally lean towards the more efficient product. Price conditioning comes in when you tell a customer that he/she made “a wise choice”. An example:
"Obviously when looking at the product (explaining the components one has and the other doesn’t) you have chosen the most durable, easier to maintain model which also contains (more ingredients, more weight, more protective coating, etc.) and as such it costs 15-19% more to manufacture just this one portion, but you’re right, it will last longer."
These and similar examples are price conditioning and are related to post negative suggestion.
Q: I am a painting company. We try to present our values to prospects. We are under-priced by others who are not licensed, insured, etc. For example, my price is $4,400 and my competitors charge between $3,000-$3,400. Customers don’t care. They are buying a commodity and price is key. What should I do?
A: The majority of small, independent painting contractors probably don’t carry workman’s compensation. Those that do don’t promote it properly. Include a copy of your coverage in a brief iPad presentation, followed by copies of your license, pictures, graphs and charts. You should also promote other things such as quality paint selection, supervision techniques, and how you test the surface for compatibility of strength and bonding as they will further separate you from your competition.
Also, take a brief course in basic selling skills. It will provide you with ideas and a language response method which will enable you to present better.
For those who participated in our final in home sales webinar of 2012, we greatly appreciate it! However, be on the lookout for more webinars in the near future. In the interim, we encourage you to sign up for our complimentary sales training program at the Remodeling Show in October.