How to Handle the Dreaded Price Objection When Faced with Cheaper Bids
Profit is a six-letter word. Yet sometimes it is treated as a four-letter word by your customers. They look at a quote from you and compare it with a few “Chuck in the Truck” competitors who’ve left invoices that are thousands cheaper—and they think you’re trying to rip them off.
Of course, you and I know that’s the last thing you’re doing. You have to make a profit to be a real business. Sadly, too many other business owners don’t understand how to price themselves to make a profit. They simply try to be “not as high” as the other companies in the market. Well, that’s why they’re going out of business—they just don’t know it yet. And that’s too bad.
The next time your customer has a price objection because the competition seems to be offering the same product or service as you are, ask to look at the bid. Make sure they’re comparing apples to apples. If they’re not, explain the difference. But if they are offering the same equipment for a drastically lower price. Here’s what you need to do…
You need to explain to Mr. and Mrs. Jones that the price you’re offering ensures you can hire the very best technicians and staff in your community. You only want the best because they, the homeowner, deserves the best. The most important day in that piece of equipment’s life is the day it’s installed. If it’s not installed properly, it could dramatically shorten its lifespan—costing them money in bloated utility bills and create the need for a replacement system much sooner than necessary. Mr. and Mrs. Jones, you don’t want that to happen to you, do you? Of course not!
Furthermore, Mr. and Mrs. Jones, we offer great warranties and guaranties. If you have a problem – and I don’t believe you will – we’ll be here to fix it. Why? Because we charge properly, which ensures we’re going to be in business in 10, 20, and 30 more years. Our competitors giving you those insanely cheap bids? Well, they could be out of business a year after your installation is complete. If and WHEN something happens with that system, they won’t be around to stand behind their work.
Customers absolutely no problem buying clothing, food, furniture, and a variety of other items every single day that come with dramatic mark-ups, sometimes 300% or 400%. It means they’re willing to spend on HVAC services, if you can explain WHY they should spend more on you, versus “Chuck in a Truck” or “Dan in a Van” who will be out of business and working for somebody in a few weeks.
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