(To read part two of this series, click here)
How many times have you seen this happen?
- You get a call from someone who needs an expensive project done: a furnace, boiler, or water heater replaced, or maybe a remodel of their home that includes a new heating system or plumbing system.
- You go to their home to meet them and see what exactly it’s going to take to get the job done. You measure, figure, and take some notes on what’s going to be involved in it, and leave promising to be in touch in a couple days with a bid.
- You call back in a day or three with their price, or email it to them. They reply with a thanks for your time and the bid, and that they’ll be in touch when the rest of the bids come in.
3a. They call you in a week to ask if you’ve had time to get their bid together. *note: this is not a good scenario:)
- You call them back after another week or so to see what they’ve decided. They inform you they’ve decided to go with someone else who was “cheaper” than you.
You wonder for the umpteen time why people make decisions like this based solely on who was “cheaper.” Don’t they know there are several very good reasons your price is higher?
You know there’s a reason you’ve seen people get taken to the cleaners time after time. They always pick the lowest bid to save a buck. The lowest bid is almost always from the company that does shoddy work, and after four call-backs and possible legal action, the customer finally realizes they’d have been better off just paying an extra 25 percent up front and had a real professional do their work.
I hate to break it to you, but it’s not the customer’s fault they do this. It’s yours.
WHY PEOPLE CHOOSE THEIR CONTRACTOR
First, ask yourself why and how customers make their decisions on who to hire for a project. Assuming they aren’t the customer who only looks at price (more on this later), they look at three basic things:
- Trust. A lot of things fit into this one. Will you show up when you promise? Will everything work like they want it to when you’re done? Will you keep your mess to a minimum and clean up after yourself? Will you be nice to their dog? Will you charge them exactly what you said you would, and not add “unforeseen” costs?
- They feel listened to. Will you ask them what’s important to them? Will you address their concerns? Will you explain why you are doing what you plan to do?
- Price. Will you give them a decent deal?
All things being equal, if they don’t have any other information, can you guess what their automatic reason to choose someone is?
That’s right: price.
TECHNICAL LISTS AREN’T ENOUGH
Sending someone a detailed list of what you’re including in your price, while vitally important, is just a ticket to the game. It’s necessary, but not enough.
If you were to need knee surgery and the doctor explained that he would need to do a “left knee arthroscopy with partial medial meniscectomy,” would you be any the wiser? This is what it sounds like when you write “Replace all zone valves and thermostats reusing the existing wiring.” To any self-respecting hot-water heat tech, this makes total sense. To your average customer? Not so much.
THE TWO SALES
In my friend Arne Raisanen’s book Don’t Miss That Sale!, it’s explained that when you make a sale, there are actually two sales being made. Every time.
The first sale is convincing the customer they actually want to go ahead with the project. The second one is convincing them they should choose you to do the work.
In the process of making the first sale, you’re doing a large part of the work needed to make the second sale.
In the sales world, the first sale is called the discovery process. This is where you ask tons of the right questions. Then you do a novel thing. You actually listen to their answers.
If you do it right, you’ll create trust and show them that what they think, want, and need in getting their project completed is important to you. If you do those things, a low price carries much less weight.
We contractors tend to be technical people who understand our trade so well, we forget other people don’t have a clue what we’re talking about. We fail to explain in layman’s terms the “whats” and “wherefores” of our proposal. We tend to get tunnel vision about what’s important, or even possible in completing a job while satisfying a customer. We forget, or don’t realize in the first place, that people will pay a premium for a service that includes all the elements listed above. This is why customers choose the cheapest bid. They aren’t actually choosing a contractor, they’re choosing a price. As far as they can tell, everyone’s offering the same basic equipment with the same basic results.
In this article, I’ve set the stage for why you’re losing sales to clueless guys who work for “cheap.”
In the next article, I’ll get more in depth on what a successful sales call can look like, and the reasoning behind it.
Earlier in this article, I promised you I’d talk a little more about the customer who only wants the “cheapest” price.
They don’t care about anything else you have to offer, and the first two reasons people choose a contractor don’t apply to them. They’re only interested in No. 3.
This is not your dream customer. Unless you’re dying for work, be very careful about agreeing to work for this person.
They are always the ones who expect more. They’ll nickel and dime you, and because you gave them a “cheap” price, everything extra they demand from you will take every bit of your profit. It’ll end up being one of those jobs you realize afterwards you’d have been money ahead not doing in the first place.
If you do work for the “price is all that matters” crowd, protect yourself, half down up front, and make sure you have a water-tight contract they sign. I hate to paint with too broad a brush, but in general these are the people you’ll have a hard time collecting from.
See you next time.
Publication date: 11/20/2017