“All of us in the remodeling field have been through tough times of late. Just be aware that steep price reductions, or a willingness to take a deposit substantially less than the customary 50% in this industry, are two key signals that a firm can be in serious financial trouble. As a precaution against you and your family getting hurt in this deal, let me give you a form that will help you test this company’s stability. If they’re unwilling to give you this information, you probably won’t have the peace of mind to go forward with them – at any price.”
Script #3: When 5-6 Competitors are 40-50% Below Your Price
“Okay, so what you are thinking, Lisa, is that these other guys’ prices must be right and mine must be wrong because I’m the only one so high, correct? I checked all my numbers before we sat down, and I know that the final price I have quoted is correct for the services we have planned, my overhead and the modest net profit our company needs to stay in business, so we can service your job in the future.
“All of us in the remodeling field have gone through tough times of late. Just be aware that most contractors are not good businesspeople. That’s common knowledge in the kitchen/bath industry. They don’t know what their true costs are. So they don’t know how to price their jobs properly. In this economy, a contractor will do anything to secure work just to stay busy, not realizing he could be out of business in months, collecting money from Peter to pay Paul.
Now imagine for a moment how this could play out with your project. You sign the deal and give the contractor a deposit. Weeks go by with no word. So you leave a message. A call comes in, but it’s not from him. It’s from the cabinet manufacturer who has your cabinets ready, but needs a lot of money to deliver them. You just realized that the contractor is out of business, your deposit is lost and it’s going to cost thousands more to find people to complete the job. Not to mention a lot of aggravation to endure as well.”
Duty, FUD & Delivery
These are the three takeaways you must remember when dealing with low-priced competitors. First, if you’ve developed a good relationship with a consumer, you have a duty to make them aware of what they may experience when they risk doing business with a low-priced firm.
Second, the FUD Factor is your most powerful tool in raising people’s awareness of the downsides of accepting the low-price bid. The best way to use that tool is to paint a picture of what might happen…just do it generically without singling out any particular company.
Third, the quality of your execution – your delivery – will determine how successful you are in getting the sale at your price; hence, the need for practicing the scripts in advance of any presentation. Having additional tools as part of the delivery will buttress your key points. Fine tune your scripts, practice the delivery, use the tools available and you will be rewarded with jobs that heretofore you never would have closed.