Too many businesses fail because they don’t charge enough for their work. When they discover how much they should be charging in order to pay their bills, pay themselves, and make a reasonable profit, their first reaction usually is, “No one will pay that much!”Remodeling Sales: It's Not About Price #MarkupAndProfit #RemodelingSales #ConstructionBusinessManagement

We’ve heard, “I understand and follow the suggested markup, but the #1 reason I lose jobs when I have an in-person consultation is ‘your price is too high’ or ‘competitor was 15% lower.’ What am I doing wrong?”

It’s true that some won’t pay the price you need. They’re focused on low price, and often don’t know why that’s a bad idea. They don’t know they’re running the risk of hiring a contractor who could go out of business in the middle of their project, or who will cut corners in order to save time or money so they can get to the next job and keep cash flowing.

When you’re selling a remodeling or home improvement project, your sales ability and presentation are important. When you follow the steps of a proper sales presentation, you won’t hear “your price is too high” or “your competition is cheaper” when you quote your price.

In your sales presentation, you want to become the Contractor of Choice. The Contractor of Choice is the company that the potential client compares everyone else to. You do that by setting yourself far above anyone else they might consider for their job.

When you’re the Contractor of Choice, they won’t be as concerned about what the competition quoted. They’ll know there is more to consider than just the price.

I’ve said before, umpteen dozen times: return your phone calls, and show up for appointments on time. That’s the first step in building trust. It’s also common courtesy. Why would anyone want to do business with you if you don’t return your phone calls, or show up late (or not at all) for an appointment?

When you show up, on time, your focus needs to be on helping your future client get what they want. It’s your top priority. That gives them the assurance that you’ll do the job they want. That puts you ahead of every other contractor in gaining their trust.

To help them get what they want, you have to ask questions. Tons and tons of questions that are focused on their project. You have to train yourself to ask questions instead of giving opinions, ideas or well-meaning advice. It’s not about you and how much you know; it’s about their project.

When you’re the Contractor of Choice, you can ask the four basic questions that you need answered. Your potential client will start making commitments, and once those commitments start coming, you’ll know you’ve earned their trust and are on your way to making the sale. Once they’ve bought you, you can use the markup you need to build the job they want. Price at that point is seldom an issue. We talk about all this in detail in Profitable Sales, A Contractor’s Guide.

You should never hear your price is too high. If you do, you didn’t get the budget set before you started the design and estimating process. Setting the budget is one of the questions that needs to be asked before you move to a design agreement or letter of intent.

Don’t forget, most homeowners don’t consider price the most important factor in choosing a contractor. However, too many salespeople consider price the most important factor. If you focus on price, the owner will, too.

If you’re selling more than one out of three sales calls, your price is too low. You’re taking orders, not selling. If you’re selling fewer than one out of four or five sales calls, it’s time to work on your sales skills.

Sales ability is a skill, and it’s a skill you need. The advantage is that skills can be learned.

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Andrew Sefton
Andrew Sefton
June 12, 2019 5:56 am

Is this issue applicable to the non-residential private and public construction sector? What additional considerations should be made in the non-residential private and public construction sector?

Devon Stone
Devon Stone
June 12, 2019 11:26 am
Reply to  Andrew Sefton

Residential sales is different than commercial and public work, where the requirement is usually lowest responsible bid. That’s not sales, it’s placing bids. For those who choose to get involved in bidding, the deck is stacked against you. We recommend avoiding that work because it’s much more difficult to get the price you need unless you know how to play their game.

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