How Low?

chrisduffy543

chrisduffy543

Member
OK what is the best thing to do? Do you have set prices and stick to them and maybe budge just a little bit? or if you start naming your prices to a potential client and they sound like they dont like the prices how low do you go? Is it better not to get the job and stick to your guns? I know you dont want to low ball anything but sometimes you need the money.
 
Oh, boy.
That's a big can of worms. I have to head out now but if it hasn't been beat to death by the time I get back I will give you my thoughts on 'price negotiations'.
 
Duffy's,
Actually the answer is all around you. If you go to a retail store, do you dicker prices? Do you ask them to knock some off? If you did, they would laugh and refuse. They have to make so much money to run their business, just like us. They do put items on sale. This is because they deal in bulk. Just like you can lower your $ per sq. ft. on a large project. On your every day pricing, you set it at that so you can make a profit and grow. Giving it up, to please anyone is not good. You need to feed your family and pay bills. I'd get a part time job, till the slow period is over. When you make alot of money this year, save some for next slow period. By lowering your price, you defeat the purpose of being in business. To grow and be profitable. Lowering prices will get around, you will get all the work you want and will be known as the cheap guy. Not good. Being profitable, growing your business and being known as the company that does excellent work and is worth every penny is Good. We had this problem 10 years ago. Worked 24 / 7. Booked up months in advance. Never made any money. Three years later, raised our prices 25%. Lost 25% of our business. Made more money than ever, worked less hrs. and charged enough to do every job great! We grow about 25% per year gross. This is due to dedication, and by all means not lowering prices. Times were hard to start. Did not have excess cash. It isn't easy to grow and be better. It will pay off in the long run. Ask the guys who have been in business for awhile. If they ran their business profitably, they will show it. In their equipment and knowledge of what they do. Hope this helps. Thank You.
 
My price is my price, I'm not selling a fixed price commodity, I am selling a high quality, high satisfaction, professional service.
 
Chris,

I've been washing houses in our area for 8 years full-time, year-round and have never compromised on my prices. In my experience, if a potential customer has a problem with your price, you are either charging too much to begin with (not likely) or (more likely) you are selling your services in the wrong neighborhood. Not to say that just because someone lives in a nice house that they'll pay whatever you ask, but, as long as they perceive the value, they will pay reasonable prices.

John
 
Yeah the other day i lost a potential customer they wanted a lower price so it seemed but i didnt keep negotiating i told them what it was and that was it and then said if the would like to set an appointment but they never called back.
 
chrisduffy543 said:
Yeah the other day i lost a potential customer they wanted a lower price so it seemed but i didnt keep negotiating i told them what it was and that was it and then said if the would like to set an appointment but they never called back.
Click to expand...

Just make your phone ring more.... Then there will be another prospect to sell to. If you are really worried about getting a "yes" all the time, then you're probably not getting enough leads. The best way to get work is to market.
 
Don't let that ruffle your feathers.

You will not get every job. Most of the time you don't want every job, just good quality customers.

This advice on this thread is very good, try to learn it and remember it.

In the beginning you want every customer, every job until you start to get some of the pita customers and after a while you start to get tired of them. Finally you raise your price if they want the job done then either they pay you to be a pita or you move on. Your time is not worth dealing with those customers.

I am learning this every day, always try to learn every day.

Now I just need to learn how to sell good.
 
chrisduffy543 said:
Yeah the other day i lost a potential customer they wanted a lower price so it seemed but i didnt keep negotiating i told them what it was and that was it and then said if the would like to set an appointment but they never called back.
Click to expand...

I am guessing it was more your sales pitch, confidence level and approach moreso than it was about you dropping the price. Dropping your price 10% can eat 50% of your company net profit. Its a dangerous game that I let others play.
 
chrisduffy543 said:
Yeah the other day i lost a potential customer they wanted a lower price so it seemed but i didnt keep negotiating i told them what it was and that was it and then said if the would like to set an appointment but they never called back.
Click to expand...

Unless you want to be the "$49 House Wash Guy" who runs around and undercuts all the $79 house wash guys then don't worry about it.
I can almost guarantee you that if you had dropped your price you would have figured out that you didn't want this person as a customer anyway.

When you drop prices to get work you tell the customer a few things:

-You were charging them more than your service was worth to begin with.

-Since you already admitted that you inflated the price they should keep hammering at you to get you to go down even more.

-The more you drop your price the less they trust you.

-If they let you do the work they probably won't be satisfied because they will wonder where you cut corners.

There are more, but you get the drift.
 
I've only been in the PW business for about 6 months now, so Im asking the same questions as you Mr. Duffy.

But, I used to be in car sales, and my experience in that has helped me in this business. My value customers who came in, knew what they wanted, and saw the value of not only the vehicle that they were buying, but also our personal service, would usually purchase the vehicle for at or above MSRP, and call and thank us profusely.

The other customer who came in with a dictionary size book of comps and other quotes, would usually talk us down 2,3,4,5 thousand dollars and then complain about the interest, and then we would get phone calls everyday, about things that were wrong with it, and it wasnt cleaned right, and blah blah blah etc etc....

My point is that valuable customers know what they want, and they want you to show them the value of your service. And if you do that, they will pay top dollar, thank you, and refer you to friends and family. Usually... hope that helps!!
 
I never drop my price.

I have offered group discounts that result in a lower price but only if I'm pulling in more work. Occasionally I will offer more value by adding in wet wax or cleaning the front walk but that's where I draw the line.

What's your close ratio? Sometimes knowing this can tell you that your pricing jobs too high or that your sales technique needs some tweaking.
 
Scott D,

The same holds true for selling service. I go for the "lay downs". I cannot close, nor do I want to, the majority of the bargain hunters. They worry non-stop if they got the best price and will flat out wear you out as a customer because they overcompensate for their perceived buyer's remorse by calling you back three times or by hovering over your work pointing out mistakes. The keyword in selling anything is value. Period. If you cannot sell value by way of showing the customer what benefits him or her, you are spinning your wheels. Value is not saving a customer $100 over the competitor. They'll forget that savings when they look at crap work every day because you had to cut corners to make any money. Sell them on a beautiful deck that they can enjoy over the summer.. sell them on professional service that makes the transaction pleasant for them.. sell them on the savings from the longer life they will get from their roof by utilizing your service and you'll close more sales.
 
Real simple, IF you get every job you bid, your to cheap.


"needing the money"
there's a problem. "Last time you did it for $$"
Explain to them " last time I really needed the money"

That puts you in a tuff situation to talk yourself out of.

________________ bottom line
stick to your price.
 
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