More Sales Now!

Lets discuss how to sell your service even when you are not the lowest bid, and how to sell expensive products in an environment that seems to always look for the best deal. Believe it or not, they can co-exist.

Company A submits a bid of $3100 for an irrigation system. Another company, Company B, submits a bid for $3000. A third, Company C, at first submits a bid between A and B, but upon learning that the owner was shopping price he drops his bid to $2900, or one hundred dollars below Company B.

Who gets the job? Well, if the bids are sealed and the only criterion is price, then the answer is obvious. However, this almost never happens. In the real world, here are two possible outcomes:

Scenario #1: Company C lost the bid because the homeowner went back to Company B and got him to go down to $2800. You see, the strength of the C bid was based on price alone. Once C no longer was the lowest bidder, he was out of the picture. If you get a sale based on price, you can easily lose it on price.

Scenario #2: Company A wins the bid at $3100 because the homeowner never asks either of the other two companies to get into a bidding war.
Company A made $300 more on the job than its competition would have made, and the customer will not shop the price. He even refers Company A to his friends. I prefer the second scenario, wouldnt you?

How can we get homeowners and end-users to think like we do? Its not all that difficult really, but it takes practice and diligence.

Heres what to do: Make a list of every feature and benefit in connection with the products you use and a similar list of every positive thing about your company. Use your manufacturers representatives or your distributor to seek out warranties, benefits, specifications, and features of the products you have chosen to use. Then include such things as your company training or certification program, the experience of your installers, quality of your customer service department, etc. The list will easily be ten items or more.

Now call your potential customer to explain your bid. Unless you really dont care about getting the work, you must call or meet with the client to explain your bid. In doing this you are not only explaining your bid, you are going through several important steps of closing the sale.

Each time you explain why you use a particular product, you move the listener closer to your point of view and closer to doing business with your company.

 

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Each time you let the customer know something about your company, he or she will have a personal connection that adds confidence and comfort to an otherwise cold and abstract piece of paper. I am shocked at the small percentage of salespeople that follow up with a personal call.

In this case, Company A won the bid and did the work, even though his was the highest bid. Here is a transcript of the conversation Company A had with the customer on the evening that he called on the phone to explain the bid:

Mr. Miller, I am calling to explain my bid, do you have a moment?
Well, yes, but youre too high and unless you come down. . . .
Mr. Miller, Im glad to hear that Im not the lowest bid you received, that way I know that I measured the right property. In fact, Im never the cheapest in the short run and I would be concerned if I was. I am the best, however, and I cannot be both the cheapest and the best. If you give me 30 seconds, I can tell you why I am your best choice here.
OK, go ahead.

l I use only (XYZ) sprinklers that carry a guarantee of (fill-in-the-blank). We have always had great manufacturer support and very few failures. Adjustments are also easier.

l I only use wire connectors and wire with a (you-name-it) rating.

l I use only the (XYZ) controller because, even though it is a bit more expensive, the homeowners seem to find it much easier to program or change, plus these controllers rarely fail in the field.

l I keep my employees year-round so I have several experienced installers instead of new people every spring.

l All of our designers are certified with the (XXX).

l All of my installation is guaranteed to be below aerator depth; I noticed that you core aerated your lawn recently.

l Susan here in the office has been with us ten years and my customers just love her. If you ever have a concern, she gets the technicians out right away.

l I designed a separate zone for that shaded area in your back yard, since the turf might actually die if it is watered at the same rate as the sunny areas.

The conversation continued for about another minute.

Now, just what is Company A doing? He is setting up a value standard in the customers mind that justifies the bid. The prospective customer might assume that all of these items are unique to Company A. He might assume that just some of the items are unique. Either way, the customer would have to make a list and call both other companies to compare value, and this is almost never done. It is the responsibility of the salesmen from Companies B and C to call and provide an explanation for their bid.

A few important rules are in order: It is not your job to make comparisons. Never state a negative about another company. Also, you should never even say something vaguely comparative such as Unlike most companies, we . . . I repeat, never speak poorly of another company, even if you know they are bidding against you and they are, in fact, a poor company! Keep everything positive. Simply list the items. Slowly and calmly proceed through your list. When finished ask if he or she has any questions about all the extra things you do. Then finish with something like we would love to do that work for you.

Last but not least: Ask for the sale. Are you prepared to give me a go-ahead tonight? Even if you know that the decision cannot be made now, go on record as wanting the work. Remember that your bid is the highest, and the client must never be under the impression that you consider him a lost case because your bid was higher.

Will you get every sale? No, but you will be amazed at how many more sales you get at the price you want to charge. It is a fact that when you cut your price by 5%, you must sell 20% more just to make the same total dollar profit. This is because all of that 5% was profit to start with.

Two more things: Practice saying these phrases until they sound natural to you, or make up your own statements that fit into a speech pattern that is consistent with the way you converse. Secondly, never lie. If your company falls short in some area, just ignore that area during your presentation. Then fix it so that you can brag about it later!

As a manufacturers representative who learned to sell in the brutal contractor arena, I know what its like to see the low price guys come and go. With the current tough job market and many able-bodied people suddenly out of work, there will soon be many new one-man companies out there without the overhead you have. They might be desperate. If you try to match them in price, you will lose.

March 2002