How would you bill it?

[Cow]

A little backstory:

Long time customer's sprinkler controller starts acting up. 42 zone controller with a couple zones not functioning correctly, take a look at the board and see it's damaged from being in service for years, make a quick fix and move wires to some spare spaces. Call the manufacturer and ask about options. You can rebuild for $600 or get a newer replacement model for $2900 list. Customer is standing right over me when making the call, so I relay these prices right over to the customer. I figure the supply house can probably get it for less and after markup it'll still be around list. He decides to wait it out and doesn't want to spend the money just yet.

In the mean time, I call the supply house to see what the REAL price is, $2200 for a new one.

Fast forward two months, the controller is acting up again, and now the customer wants to replace it. Call the supply house to verify the price and availability again, he says $1000..:huh: I ask him to check to make sure I'm getting the whole controller and not just the board, etc. He calls back, that's the right price, do you want to order it? I order it up.

Controller shows up but come to find out his vender misquoted it, but the supply house held them to it. Now I have a $2200 controller for $1000.

Do you pass the savings on to your customer as their good fortune or keep it for yourself?

 

[Strathead]

A little backstory:

Long time customer's sprinkler controller starts acting up. 42 zone controller with a couple zones not functioning correctly, take a look at the board and see it's damaged from being in service for years, make a quick fix and move wires to some spare spaces. Call the manufacturer and ask about options. You can rebuild for $600 or get a newer replacement model for $2900 list. Customer is standing right over me when making the call, so I relay these prices right over to the customer. I figure the supply house can probably get it for less and after markup it'll still be around list. He decides to wait it out and doesn't want to spend the money just yet.

In the mean time, I call the supply house to see what the REAL price is, $2200 for a new one.

Fast forward two months, the controller is acting up again, and now the customer wants to replace it. Call the supply house to verify the price and availability again, he says $1000..:huh: I ask him to check to make sure I'm getting the whole controller and not just the board, etc. He calls back, that's the right price, do you want to order it? I order it up.

Controller shows up but come to find out his vender misquoted it, but the supply house held them to it. Now I have a $2200 controller for $1000.

Do you pass the savings on to your customer as their good fortune or keep it for yourself?

That is a really good question! My first instinct was keep it. Then, no credit them, then it depends!

Here are my thoughts on it...

If it were part of a fixed price contract job, I would absolutely keep it. I would condsider it part of the pluses and minuses of doing the job. You were, after all the low bidder.

Under any circumstances, I would not feel guilty about keeping it. The customer, after all got a product worth $2900 list for $2900.00 Grainger would have no problem selling it to you for that all day long. So my feeling is I would assess the situation. If I felt there was an advantage in future work, or the ability to charge a higher mark up in the future to this customer, I would pass back part of the savings. If this was a customer who has already proven that they are looking for the low price, I would put every penny in my pocket with a smile.

I feel you have no moral obligation to refund money to the customer any more than you have a moral obligation to pay more to the vendor who quoted it wrong and will need to eat it. Had you quoted it wrong, to the customer you would have eaten it wouldn't you?

 

[ishium 80439]

Let's imagine for a moment that your supplier remembered the original phone call with you and the price he quoted. You call back two months later, he researches his price finds he can get for $1000. Does he say "Your lucky day!" or "I'll still honor the price I quoted you two months ago"?

Now just because someone else would do something doesn't necessarily make it right but I think there is a fundamental rule of business here. Make what you can when you can. Your customer agreed to a price and that is the price you are going to charge. You are providing a service that has a value of X and you are charging X. The fact that you happen to be making a good profit is the reason you are in business. IMO I would stick with the price originally quoted and count the windfall against all of the other times you have likely been burned.

My .02.

 

[petersonra]

The way I see it is you quoted a price to the customer and that is the price. But I would also expect that if you quoted a price of $1000 and it actually cost $2200 that you would abide by your quoted price as well.

 

[bpk]

What if you made a mistake and quoted 1900.00 when it was actually 2200.00, would your customer pay the difference ? I would stick with the original quote, dont be afraid to make money, thats why youre owning youre own business.

 

[Bill Annett]

This is just my opinion, but why dont you tell the customer that you were able to get the part a littler cheaper than I thought and cut him a little break. You will still make more money and if the customer even saves a hundred dollars he will be Happy. A Happy customer is better that an un Happy customer.

 

[Cow]

If this was a customer who has already proven that they are looking for the low price, I would put every penny in my pocket with a smile.

Yep, this is my customer.

So it looks like most of you guys agree with our office guy, he wants to charge them the original quoted price....

 

[220/221]

I wouldn't lose any sleep over a little bonus. It helps make up for all the times it doesn't go your way.

 

[growler]

This is just my opinion, but why dont you tell the customer that you were able to get the part a littler cheaper than I thought and cut him a little break. You will still make more money and if the customer even saves a hundred dollars he will be Happy. A Happy customer is better that an un Happy customer.

If the customer was un-happy he would have called someone else. He knew the price and the job was sold.

If he is a regular customer there will be plenty of chances to do him a little favor in the future that's not charged for.

If you are selling ice cream you may give out free samples but you don't give out dollar bills. A free ice cream cost the store almost nothing and still keeps the customer happy.

I often do a little something for free while waiting for an inspector ( I get bored anyway) and that way I don't lose any time only the materials. That way it looks as if they are getting a $100 item but it only cost $20 in materials.

 

[Strife]

If the controller was actually worth 1000 and you got quoted 2200 by mistake, then get it at what is worth I would say definitely return the money to the customer. Customer might find out later what is really worth and that might leave him with a VERY bitter taste in his mouth.
But if the controller is worth 2200, and you were able SOMEHOW, ANYHOW, to secure it for 1000, that is your business.
I can buy things (sometimes, not VERY often) a lot less than what is actually worth. Let's say I do a job for 10K feet of #10. So I sell the #10 at 210-220(going price) a thousand plus the markup, but before I start the job I ran into someone closing up shop who's got a load of #10 and I get most of the wire for 80-90 dollars a thousand.
Do I have an obligation to give credit to the customer? The same obligation the customer would have to pay me more if the #10 jumped to 400 overnight. Which is "NO WAY IN HELL".
Now if it's a really good customer and I want to make his day, I'd give him back 200-300 and still make a nice profit.

A little backstory:

Long time customer's sprinkler controller starts acting up. 42 zone controller with a couple zones not functioning correctly, take a look at the board and see it's damaged from being in service for years, make a quick fix and move wires to some spare spaces. Call the manufacturer and ask about options. You can rebuild for $600 or get a newer replacement model for $2900 list. Customer is standing right over me when making the call, so I relay these prices right over to the customer. I figure the supply house can probably get it for less and after markup it'll still be around list. He decides to wait it out and doesn't want to spend the money just yet.

In the mean time, I call the supply house to see what the REAL price is, $2200 for a new one.

Fast forward two months, the controller is acting up again, and now the customer wants to replace it. Call the supply house to verify the price and availability again, he says $1000..:huh: I ask him to check to make sure I'm getting the whole controller and not just the board, etc. He calls back, that's the right price, do you want to order it? I order it up.

Controller shows up but come to find out his vender misquoted it, but the supply house held them to it. Now I have a $2200 controller for $1000.

Do you pass the savings on to your customer as their good fortune or keep it for yourself?

 

[sd4524]

"Hi Mr Cow this is Charlie the guy that you replaced my sprinkler controller for last year. Hey I never told you that I have another property the next town over. I'm having the same problem at my other property with the sprinkler controller. I want to replace it as well. I told my neighbors about what you did for me and they both want the same thing done."

 

[ritelec]

"Hi Mr Cow this is Charlie the guy that you replaced my sprinkler controller for last year. Hey I never told you that I have another property the next town over. I'm having the same problem at my other property with the sprinkler controller. I want to replace it as well. I told my neighbors about what you did for me and they both want the same thing done."

"Hi Mr Cow this is Charlie. I think I'm the guy that you replaced a sprinkler controller for. I'm interested in electricity and have been reading around this forum and it may me coincidence but I think your referring to me and my
system ".


Tough call Cow.

Is the customer a good guy, does he give you much work, ......................you may want to let him know and cut him a break, after-all that money wasn't estimated in the cost of the job anyway.

Ask yourself......... What Would Jesus Do.


I think you'll do the right thing.


Oh.............just another thought............the guy they gave you the "light quote". Is he in a pickle now, did he loose his job? Maybe talk to the supplier to find out his cost, reduce the original quoted price to cover the suppliers cost and as a
savings to the customer. Everyone gets paid. No one gets duped. You can sleep at night and not think of it (sticking a grand in your pocket) every time you visit this customer.

 

[chris kennedy]

The way I see it is you quoted a price to the customer and that is the price. But I would also expect that if you quoted a price of $1000 and it actually cost $2200 that you would abide by your quoted price as well.

Agreed.

 

[controlled]

Let's say you Are bidding a job. You get all material prices from supplier A. With these prices you are awarded the job. After being awarded the contract, but before the job starts, you get better pricing from supplier B. Would you go to the GC and reduce your price? I know I sure wouldnt

Derek

 

[ritelec]

Let's say you Are bidding a job. You get all material prices from supplier A. With these prices you are awarded the job. After being awarded the contract, but before the job starts, you get better pricing from supplier B. Would you go to the GC and reduce your price? I know I sure wouldnt

Derek

I understand your point and
I understand you gotta make a buck.............but does that not also fall into the same category as when people waste your time and shop your number?

I would hope you used the supplier you were working with (not reducing for the GC). Or at least consult with them (the supplier) of any major pricing differences.


Have we lost our morals and scruples???

 

[chris kennedy]

Have we lost our morals and scruples???

But of coarse, where have you been???

 

[ritelec]

On a small planet about 94 million miles from Alpha Centauri A.

There was work there, but I missed home.

 

[chris kennedy]

...........

 

[Fulthrotl]

A little backstory:

Long time customer's sprinkler controller starts acting up. 42 zone controller with a couple zones not functioning correctly, take a look at the board and see it's damaged from being in service for years, make a quick fix and move wires to some spare spaces. Call the manufacturer and ask about options. You can rebuild for $600 or get a newer replacement model for $2900 list. Customer is standing right over me when making the call, so I relay these prices right over to the customer. I figure the supply house can probably get it for less and after markup it'll still be around list. He decides to wait it out and doesn't want to spend the money just yet.

In the mean time, I call the supply house to see what the REAL price is, $2200 for a new one.

Fast forward two months, the controller is acting up again, and now the customer wants to replace it. Call the supply house to verify the price and availability again, he says $1000..:huh: I ask him to check to make sure I'm getting the whole controller and not just the board, etc. He calls back, that's the right price, do you want to order it? I order it up.

Controller shows up but come to find out his vender misquoted it, but the supply house held them to it. Now I have a $2200 controller for $1000.

Do you pass the savings on to your customer as their good fortune or keep it for yourself?

now if your customer googles sprinkler controller price, and this post comes up third on google,
as it did when i googled it, how would you feel if you were in the customer's place?

how would you feel in YOUR place, if you had to explain this post to the customer?

what i'd do, is i'd tell the truth, and explain that WE had a windfall, and that i'm splitting the
difference with them. but i like sleeping well at night.

truth is, the fair thing to have done was to do what you'd appreciate having someone do
for you if you blew a number on a bid.... i'd a talked to the wholesale house, and had them
go back to their vendor and fix the number, so that the vendor makes their profit.

do unto others, and all that..... i have good customers, and they treat me fairly, and i treat
them fairly, and it feels good to work for them.

now, if i have something in stock, i charge market value for it.

 

[ritelec]

now if your customer googles sprinkler controller price, and this post comes up third on google,
as it did when i googled it, how would you feel if you were in the customer's place?

how would you feel in YOUR place, if you had to explain this post to the customer?

what i'd do, is i'd tell the truth, and explain that WE had a windfall, and that i'm splitting the
difference with them. but i like sleeping well at night.

truth is, the fair thing to have done was to do what you'd appreciate having someone do
for you if you blew a number on a bid.... i'd a talked to the wholesale house, and had them
go back to their vendor and fix the number, so that the vendor makes their profit.

do unto others, and all that..... i have good customers, and they treat me fairly, and i treat
them fairly, and it feels good to work for them.

now, if i have something in stock, i charge market value for it.

+1