Chapter 5 – Sales Technique – Agree On Price

The first step of getting the customer to agree on price is telling the customer how much you will charge for the job. This is relatively simple. Just say — I will do your job for .

The customer will generally do one of these ten things:

1. Tell you to do the job.

2. Tell you he already has a better price from someone else.

3. Tell you that he thought the job would cost less.

4. Tell you that he thinks the job should cost less.

5. Tell you that he wants to get other bids and then decide.

6. Tell you that he will think it over.

7. Tell you that he wants you to do the job and that he will call you back when he is ready for you to start work.

8. Ask you if you are sure you have taken into consideration all of the work that he needs.

9. Say “Thank you,” and then hang up the phone or walk away from you.

10. Ask you to lower your price.

Your ability to handle the customer at this point is, to a large degree, going to greatly affect how well you do as a contractor. After all, if no customers want you to do their jobs, you will be out of work in a hurry. However, if a large percentage of the customers who originally contact you end up by wanting you to do their work, you will have a very good chance of becoming a successful contractor.

Even if a customer doesn’t immediately agree to the price, you may well end up doing the job. There are many ways to turn a doubtful customer into one who definitely wants you to do his job.

Let’s take a look at each of the ten things a customer might say to you and see what they mean. Also, let’s examine some ways you can respond.

1. THE CUSTOMER TELLS YOU TO DO THE JOB

What he means: The customer wants you to do the job.

How to respond: Do the job!
2. THE CUSTOMER TELLS YOU THAT HE ALREADY HAS A BETTER PRICE FROM SOMEONE ELSE

What he means: The customer has gotten a better price so why should he pay you more?

How to respond: O.K. so the customer might have been given a better price from another contractor, but if he pays you more, will the customer actually get a better value? Could you do the job faster or better? Could you start the job sooner? Was the other contractor’s price
lower because he wasn’t going to do as much work? What about materials — is your price higher because you are going to use better materials? Ask the customer these questions. Often, the answer to one or more of these questions is yes, and you can end up doing the job for him.
3. THE CUSTOMER TELLS YOU THAT HE THOUGHT THE JOB WOULD COST LESS

What he means: The customer is surprised and unhappy that it will cost so much for you to do the job.

How to respond: Agree with the customer that the job is expensive but also explain that your labor, material, insurance, phone bill, etc., all are outrageously expensive these days and that you need to charge this price to make a profit.

Often, customers have no idea what the job should cost and are genuinely surprised. Another reason a customer might say the job should cost less is because he thinks that by telling you this, you might give him a better price.

If you have told the customer about your own operating expenses and he still seems unhappy, tell him what you estimate the material will cost and what the labor will cost.

Tell him how long you think the job is going to take. Sometimes the customer will have greatly underestimated this. Go over with the customer how long various parts of the job will take individually and then add them all up to show the customer how you arrived at your time estimate. Often, if you can explain this to the customer in a pleasant way without being defensive, he will decide that the price you originally gave him was, in fact, a fair one, and he will now agree that you can do the job.
4. THE CUSTOMER TELLS YOU THAT HE THINKS THE JOB SHOULD COST LESS

What he means: Same as #3 above except the customer is saying that he knows your price is too high.

How to respond: Same as 3# above. Additionally, since the customer seems so positive about it, ask him if he already has another price on the job from someone else.

If the answer is yes, handle the customer as in #2 above.
5. THE CUSTOMER TELLS YOU THAT HE WANTS TO GET OTHER BIDS AND THEN DECIDE

What he means: Either he wants to get other bids and then decide or he already has a better bid.

How to respond: In a friendly way tell the customer that this is a good idea. Your attitude should be that since you know that your price reflects the best value, you have confidence that your price will compare favorably with others. Remember, customers don’t just look at price, they look for the best value.

Also, invite the customer to call you back if he has any questions about your bid or even the bids of other contractors. Tell the customer that you will be glad to go over the various bids with him to see if they all are for the same amount of work and also to see if the materials are the same. Sometimes, after you tell a customer this, he will immediately decide to give you the job.

Sometimes, the customer will immediately tell you that he already has another bid, and he will go over it with you. Or, he may call you back later and want to go over the other bids he has gotten. When you are going over the bids, you once again have a golden opportunity to demonstrate how honest, friendly, helpful, and competent you are. Often this will get you the job.
6. THE CUSTOMER TELLS YOU THAT HE WILL THINK IT OVER

What he means: Same as #5 above or, after hearing how much the job costs, the customer has just decided not to do the job at all, or he’s going to get another bid. Basically, it means, NO! Very rarely this customer, after getting one or more additional bids, will call you back. But, at least in my experience, not very often.

How to respond: This customer will not respond to the same handling as in #5 above. In fact it is unlikely that he will respond to anything at all. Simply say thank you and good-bye.
7. THE CUSTOMER TELLS YOU THAT HE WANTS YOU TO DO THE JOB AND THAT HE WILL CALL YOU BACK WHEN HE IS READY FOR YOU TO START THE WORK

What he means: When a customer says this, he either means exactly what he says or he means exactly the opposite — that he doesn’t want you to do the work and he will not call you back.

How to respond: Tell the customer that you are happy that he wants you to do the job. Ask him when he thinks the job will be ready to start. As a general rule, the more definite his answer is, the more likely you will end up doing the job.
8. THE CUSTOMER ASKS YOU IF YOU ARE SURE YOU HAVE TAKEN INTO CONSIDERATION ALL OF THE WORK THAT HE NEEDS

What he means: The customer is surprised that your price is so low.

How to respond: Believe it or not, what you must now do is prove that it is O.K. for your price to be so low.

For whatever reason, the customer is afraid that your price is too low. This customer is clearly more concerned with value than price. He is concerned that you may not do a good enough job at the price you quoted him. So what you must do is convince the customer that you are a reliable and competent contractor. Go over the job with him again just as in #3. This time, however, you must show the customer that it is not necessary to charge more than your original price.

Also, it is possible that you did, in fact, miss something. If this is the case, apologize to the customer, raise your price, and compliment the customer on his honesty. If there is nothing wrong with your original price, however, DO NOT RAISE YOUR PRICE. Remember, you are trying to convince the customer that you are a good contractor. If he feels that you are taking advantage of him in some way, he is not likely to want you to do the job.
9. THE CUSTOMER SAYS THANK YOU AND THEN HANGS UP THE PHONE OR WALKS AWAY FROM YOU

What he means: When a customer does this, he has completely dismissed you from any possibility of doing his job.

How to respond: Fortunately, you don’t have to do anything. The customer has already broken off communication, and I would advise you to keep it that way. I have learned from experience that this is not any kind of customer that you want.
10. THE CUSTOMER ASKS YOU TO LOWER YOUR PRICE

What he means: The customer wants you to lower your price.

How to respond: Just because a customer asks you to lower your price doesn’t mean he won’t accept your original price. Ask him this — What are you thinking? Depending on what he says, you may be able to work something out. Some customers think that it is a standard business practice for a contractor to give a higher price than he really wants and then lower his price if the customer asks him to.

What it all boils down to is how much you want to do the job and what price you want to be paid to do it. Don’t let a persuasive customer talk you into any agreements that you feel uncomfortable with. As a matter of fact, these customers are likely to be poor customers anyway, so don’t ever be afraid to tell the customer that you will not lower your price.

YOU DON’T NEED TO GET EVERY JOB

At this point I’d like to point out that there are many customers out there who you should not do business with. Remember, what you are trying to do as a contractor is MAKE A PROFIT. No matter what a customer says or does, the bottom line is — DID THE CUSTOMER MAKE YOU A PROFIT? So, when you don’t get a job from a particular customer, it is always possible that you might actually be better off not getting it.

If you can’t come to an agreement with a particular customer, don’t worry. There are lots and lots of good customers out there looking for good contractors, and they are willing to pay you well for your services.

AGREE ON EXACTLY WHEN YOU WILL BE PAID FOR THE JOB

Let’s assume that you and a customer have agreed that you will do the job for a certain amount of money. There is still one more agreement that you must make with the customer. YOU MUST AGREE ON WHEN YOU WILL BE PAID FOR THE JOB.

The time to do this is after you and the customer have agreed on how much money you will get for the job and before you do the work. This can be a simple step, such as agreeing that you will collect a check as soon as you finish the job. Or it can be a more complex arrangement, where you receive progress payments as the job advances. Whether simple or complex, ALWAYS MAKE AN EXACT AGREEMENT ABOUT WHEN YOU WILL BE PAID BEFORE YOU START THE WORK.

If you wait to discuss the pay agreement until after you have completed the job, you may find that it is now harder to collect the money.

Think about this for a minute — imagine that you have just given your customer a bill and you are now expecting him to write you a check. But he doesn’t write you a check. Instead, he tells you that he thought he had thirty days to pay the bill, or that you need to send the bill to some far-away company, or that he can’t pay the bill because his business partner (who happens to be in Ireland) needs to approve payment before he issues you a check. Or, or, or, or, or, or,…. Get the idea?

Here are two good reasons for making an agreement as to when you will be paid for the job before you start the work:

1. The customer will more easily agree to your payment terms if you have not yet started the work.

2. If you can’t reach a pay agreement that you are both happy with, you still have an opportunity to walk away from the job.

There are many contractors who seem to have a reluctance to discuss with a customer exactly how much the job will cost or exactly when the contractor will be paid. Fortunately for contractors, one of the best ways to separate good customers from bad customers is to see how willing customers are to make exact agreements about money. Because good customers plan on keeping the agreements that they make, they want to know exactly what those agreements are.

A good customer appreciates pleasant and straightforward communication about any aspect of the job, including how much the job will cost and when you want to be paid. So, if you find that a customer is getting upset when you talk about how much the job will cost or when you will be paid, ask yourself this question — Do you really want to do work for this customer?

PUT AGREEMENTS WITH CUSTOMERS IN WRITING

If you want to save yourself countless future problems as a contractor, put your work descriptions, price and payment agreements with customers in writing and get the customer to sign that agreement before you do the job. There are countless reasons for doing this, all of them good.

The same advice, by the way, goes for additional work orders to existing contracts. Never do additional work that you want to be paid extra money for without first getting a signed agreement.

And now, guess what? You have covered all the basics on how to find customers and get work. Congratulations! You are now well on your way to learning how to make good money as a contractor.