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ItsHot

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What is the best way that you handle customers that after receiving your price quote,then start trying to talk that price "down"? I guess that is called "negotiating"? Thanks for your thoughts!
 
If there is a part that they can do (trenching maybe?) I will offer a small reduction.

Otherwise I tell them our pricing is fixed, it's the best we can do, walk away and hope they don't call.

HUGE red flag.
 
I used to build a 10% extra into my bids for "negotiating factor".
It didn't help.
If you offer 10, they want 15....either way, you just confirmed their idea that we are making money hand over fist.

So now I start with ...the cost of copper has risen 300% in the past 2 years; fuel cost are through the roof, insurance is insane...and lead up to ...so where we shall we try and trim this job to a price that matches your budget....we can delete this that and the other thing...

Or in other words...just be honest with them.
 
When a customer wants to talk you down, you first need to know that you didn't do your job. You didn't build enough value in whatever pitch you did (or didn't) give. The goal is to build enough value for them to think the price is cheap.

There are many closing techniques to use when the objection is that "the price is too high". That objection, on the face, is something really only rookie salesmen get. One approach to diffusing that objection, which will allow you to drop back and build more value is called "the drive-in theater close":

"I understand how you feel. Others have felt the same way, but when they considered __________, this is what they found".

You'll note the emphasis on feel, felt, and found, which is fundamental to how this closing technique works. Use that blank space to give your pitch some more, perhaps much more if you never gave it in the first place, and ask for the sale again. Tell them why your price represents value.

If this doesn't work, you can start offering to subtract things off the scope of work to bring the price down to match their budget better.

Since there are literally hundreds of ways to handle the price objection, I would highly suggest some Zig Ziglar and Brian Tracy books. By reading these books, you'll learn how to use "test closes" throughout the pitch to almost guarantee that any objection when you ask for the sale will not happen. These books are also quite useful to the electrician in the field who's additional income may be partially tied to upselling.
 
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Try this:

You: "This complete job (blah, blah, blah) will be $3,475."

Customer: "That's too much, more than I expected, etc. How about $3,000?"

You: "After looking over the numbers again, I can offer it to you for $3,750."
 
220/221 said:
If there is a part that they can do (trenching maybe?) I will offer a small reduction.

HUGE red flag.
Click to expand...

We stopped that years ago, when we got the homeowner dug trench, it was never stright, or deep eniough, so it ended up costing us time to clean up their mess, and time is money.
 
People are conditioned to ask for something off of the job price.


I would have either of 2 responses.

Customer $ 1
"Pierre, I have given you a number of jobs, do I get a volume discount?"

Pierre's Response
"I wonder how many gallons of milk you have purchased from your grocer? Have you asked them for a volume discount...and they are a billion dollar corporation"


Customer # 2
"So Pierre, what do you think you can do with the estimate price?"

Pierre's Response
"Well, I thought I gave you a good price, but I can go up about $500 if you like." Stops them in their tracks.

I never negociated down in the last 6 years I was in business. There is not enough time and once you go down in price, two things happen.
1. they think you over priced the job.
2. They will keep on asking for money off in the future...a bad way to do business in my mind.

Yes, I did bid on some work, but not a large percentage of my work.


Okay, so I only had 2 customers... the ones above. :grin:
 
thanks

thanks

Thank you for the great info. Larry I am really going to have to remember your technique!! The job that made me consider posting this question, has something similiar to all of your thoughts. Even the trenching part.By the way I did get the job, I nudged a little becuause there will be a follow up "bigger" job that i hope to get also. Thanks again!
 
Pierre C Belarge said:
People are conditioned to ask for something off of the job price.
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I disagree wholeheartedly. You did something that caused them to feel that they could try. There aren't many people in line at WalMart trying to negotiate the price of their goods with the cashier. There aren't many people in line at Jiffy Lube trying to negotiate the price of their oil change.
 
ItsHot said:
The part that I "nudged " down on is 4 can lights that the customer decided he could do with out.
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That's a good way to handle that. You didn't cut your price then, in that case, and if you were savvy, you might have even left your profit in the price for thost cans anyhow.
 
ItsHot said:
The part that I "nudged " down on is 4 can lights that the customer decided he could do with out.
Click to expand...

We noticed, once you come down with your price, they are convinced you were too high in the beginning, and they are problem customers after that.
 
ItsHot said:
I nudged a little becuause there will be a follow up "bigger" job that i hope to get also.
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That's how it often happens. When someone holds the next job in front of me, looking for a discount, I tell them I'll give them a discount on that next job when it happens. It almost never does.
 
mdshunk said:
If this doesn't work, you can start offering to subtract things off the scope of work to bring the price down to match their budget better.
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That's it right there. You don't negotiate the price just the scope of work.

If you are in the check out line at Wal Mart they won't reduce the price if you don't have enough money but they will let you put items back on the self to be purchased at a latter date.

I think many people just like to test your responce. Why shouldn't they ask for a price reduction, you could be dumb enough ( you don't look to smart and you do work for a living).:grin: :grin:
 
Sometimes, negotiating is a cultural thing. In certain Asian cultures, you wouldn't get a job w/o a little give and take.

I try to read the customer as I'm looking over the job. If I feel the need, I can always find some room for negotiation.

Sometimes though, people are just cheap. I don't work cheap and don't bid cheap. Again, if I think that's the type of customer I'm dealing with, I'll bid the work fast and high, and get on to more productive activities.
 
This often happens in the engineering world as well. The responses I have seen made by the companies I worked for, when a client asks for a lower price, was essentially the same in all cases. We went through the work scope, and told them that if we dropped this item from the project, we could reduce our price by that much.
 
Before your too fast to reduce your price, think about your own situation, will your suppliers reduce their prices, try to get a reduced rate from your phone company, or your insurance rates, how about your truck payments, fuel prices, and all it's repair charges, you will most likely kind , they will not reduce prices, but rather incease then, on a regular basis, if your selling street goods in a third world country, where there are no orderly markets, yes then you can bargin, the prices.
 
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satcom said:
Before your too fast to reduce your price, think about your own situation, will your suppliers reduce their prices, try to get a reduced rate from your phone company, or your insurance rates, how about your truck payments, fuel prices, and all it's repair charges, you will most likely kind , they will not reduce prices, but rather incease then, on a regular basis, if your selling street goods in a third world country, where there are no orderly markets, yes then you can bargin, the prices.
Click to expand...

Will my suppliers reduce prices? Yes, especially on larger orders, repeated similar orders, and things they accidentally over-ordered to begin with. I also expect (and sometimes ask for) zero reduction for the small jobs, or things that I know are going to come with a lot of research on their part.

I negotiate with my insurance broker, my banker, both my phone companies, and the auto repair-shops. Sometimes I get a discount, sometimes I don't. If I take my car to the dealer for an oil change, I'm gonna pay retail. If I need oil change, tune up, transmission flush, gaskets, and a new alternator, I'm going to ask for, and usually get, a discount on the labor. That's because the dealer and I both know they have fixed pricing for those items based on a nation-wide average of the hours it takes to do each job. When they have the same tech, working in the same area of the truck, it takes a lot less time then it is priced at.

If I think a price is unreasonable for the market/labor/parts/quality combined, then I have no problem saying so and asking for a contractor to verify the numbers. Then I make a decision from there.

As an example, many contractors around here like to flat rate recessed down lights. I on the other hand would expect the reasonable cost of 6 cans installed in 1 upstairs room (with attic space), 1 switch, & 1 home run to be different than 2 cans each w/ 1 switch installed in 3 downstairs rooms (no crawl space), & 1 home run. If they come back as the same price on 2 line items of the same estimate, I'm going to ask them to recheck the numbers, even if I think they have underbid. I want to keep the contractor in business, I am not interested in keeping them in Armani. Is that unreasonable of me as a client?
 
pbeasley said:
Will my suppliers reduce prices? Yes, especially on larger orders, repeated similar orders, and things they accidentally over-ordered to begin with. I also expect (and sometimes ask for) zero reduction for the small jobs, or things that I know are going to come with a lot of research on their part.

I negotiate with my insurance broker, my banker, both my phone companies, and the auto repair-shops. Sometimes I get a discount, sometimes I don't. If I take my car to the dealer for an oil change, I'm gonna pay retail. If I need oil change, tune up, transmission flush, gaskets, and a new alternator, I'm going to ask for, and usually get, a discount on the labor. That's because the dealer and I both know they have fixed pricing for those items based on a nation-wide average of the hours it takes to do each job. When they have the same tech, working in the same area of the truck, it takes a lot less time then it is priced at.

If I think a price is unreasonable for the market/labor/parts/quality combined, then I have no problem saying so and asking for a contractor to verify the numbers. Then I make a decision from there.

As an example, many contractors around here like to flat rate recessed down lights. I on the other hand would expect the reasonable cost of 6 cans installed in 1 upstairs room (with attic space), 1 switch, & 1 home run to be different than 2 cans each w/ 1 switch installed in 3 downstairs rooms (no crawl space), & 1 home run. If they come back as the same price on 2 line items of the same estimate, I'm going to ask them to recheck the numbers, even if I think they have underbid. I want to keep the contractor in business, I am not interested in keeping them in Armani. Is that unreasonable of me as a client?
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I think your missing the point, of cost of doing business, with the direct cost, sure you can go to another phone company for your service, but the unit rates will remain the same with that company, and the same goes with your vendors, you can change a vendor, but every price he quotes you will pass on to your customer.

You have a phone company now, what are you going to do move to another company every time you deal with a customer?

Or change your yellow page Ad. after it is published and get a better Ad rate?

The State makes the laws that controll the Worker comp insurance rates, you can run to a hundred brokers, but the rate will remain the same.
 
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I am always looking for the bargan I shop at wal mart the day after a holiday and buy at 70% off. I rented a car and asked for a free upgrade and got it.I bought the fridge for our shop at the box store and had to get a manager to do it but they lowered the price because it was the floor model.My money spends everywere and if someone does not want to negotiate that is fine I can go elsewere that is the way I aproach a customer who wants to dicker the price if I have room I might penny price them if not they are free to go elsewere.
 
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