Tips Provided To Help 'Justify' Project Prices

Tips Provided To Help 'Justify' Project Prices

How often have you heard a client say, "I like the design, but the price is too high."? Next time you do, try this: Ask in a calm, serious manner, without sounding defensive or combative, "Our price is too high compared to what?"

Virtually everyone you'll encounter as a prospect does something for a living they're proud of. They consider what they do to be of high quality and price their own products and services accordingly.

If your prospect owns a restaurant, point to the most expensive item on the menu, and say, "For the price you charge for this, I'm sure you use the finest ingredients and the highest culinary skill. Well, this room design uses the finest products and was designed with high degree of professional skill."

What this can help your prospect do is put your price into a frame of reference he can understand. When buying a kitchen, bathroom, home office or other-room design from you, the client has little to go on. He can go to home centers and appliance stores or look in magazines and newspapers to get some idea of what the products themselves cost, but even then he may be comparing apples with oranges.

What's invisible in your price is your time and skill and asking this question can help put this in perspective. A lawyer knows how much time is required to prepare for a court case, just as an accountant knows how much time and training he puts in above and beyond the few hours he invests in filing a tax return. These professionals charge accordingly for their projects, and reminding them of their own business practices can help them understand how you charge for yours.

Another advantage of this tactic is that it can make you understand what some of the underlying assumptions are that your client is making. For example, your client may have visited an appliance store and seen the prices for low-end ranges, and may assume the commercial-look, high-end range he specs is priced similarly. He may be comparing someone else's semi-custom or high-end stock cabinets with your custom cabinetry line. He may be comparing granite-look laminate with granite-look solid surfacing, or with granite.

You may also find some interesting gaps in the way other retailers are pricing their jobs that can give you a competitive advantage when you sell. For example, does the price your client is comparing yours to include permits and inspection fees?

Does it include applicable state and local taxes? Some retailers hide these "extras" from their estimates and hit the customer with them at the end, when the job has been signed.

Finally, be sure you and your clients are comparing apples with apples. Some years ago, a retailer in the Northeast built short-term volume rapidly with low-ball quotes. His competitors discovered, however, that his tactics to beat everyone's prices were dishonest his room drawings often showed items like moldings, soffits and even refrigerator cabinets that were not included in the price quoted, nor in the contract. Needless to say, any competitor that tried to match the room shown in the perspective at the same price would have been at a severe disadvantage.