Nobody likes to lose out on a job, especially after you have poured hours and hours into evening meetings, phone calls, chasing prices from subbies and preparing a quote. So how do you combat low ball pricing and secure the job when you’ve put forward a higher price than other bidders?
Trying to achieve a premium price over low bidders is probably easier in the residential market than the commercial one. With residential work you are more likely dealing with a range of factors that affect the decision making – including emotions – so it’s often easier to get a buyer to consider other elements that add value to the project.
In a commercial project, price ranks higher in the priority list and so you need to be pretty much “on the money” in order to be considered. This doesn’t always mean that you have to be the cheapest to get a commercial job. If you do good work, provide value, put in the effort before the tender or RFP is issued, then you can often convince evaluation panels to look at the full picture and not just price.
When bidding for work in the residential market, there are some strategies to use to combat lower priced competitors:
- Don’t bad mouth the competition. Focus on what your strengths are and let the client draw the right conclusion.
- Be reliable. Turn up for appointments early and prepared.
- Be presentable. Turn up for appointments looking smart.
- Say what you do and DO what you say (plus a little bit extra).
- Provide value to the prospect early in your relationship with free advice or information. Taking time upfront to build trust and rapport always pays for itself in the long run
- Be honest and transparent with the prospect about price comparisons. Let them know you understand they may look at other bidders, and that you may not be the cheapest, but assure them of how you can provide the best overall value
- Ask the prospect what factors play a part in their decision making, and ask them to rank them according to what they value most. If they say “price”, you can do one of two things. You can either spend some time trying to convince them of the importance of value over pure price. Or you can recognise that a client purely focussed on price is not your ideal client and, therefore, not someone you want to pursue. Know when to walk away.
- Present your quotes professionally and with relevant supporting information, such as recent testimonials. Having a well-written, professional looking quote with ample information that is easy to sort through is absolutely key.
- Present your quote in person, not just by email. An easy way to secure this meeting is to set the day and time for it at the first conversation, so the prospect knows ahead of time that there will be an in-person presentation of the quote.
- Keep up the communication. If a prospect isn’t ready to give you an answer immediately, make sure you follow up with more value, advice or useful info. Let them know they’re important to you.
Use these tips with confidence (but not arrogance) and you will attract a better class of job that provides a higher margin with fewer hassles. The ground work you do at the early stages of the sales process to build trust and credibility will help you in the final delivery of the quote.
If you have other tips and techniques that have worked for you, please share them here for others to benefit.
By Andy Burrows The Trades Coach. www.tradescoach.co.nz