A question from a window cleaner below…
Steve,
I recently provided an estimate on a large home for $436. While that is a good amount of money to have your windows cleaned, after going back and reviewing the estimate I believe it was an accurate quote based on the amount of time it would have taken me to do the job. When I called the prospective customer back to follow up on the quote (he was not home when I did the estimate) he said the amount was more than what he had anticipated and would need to save for several more months to have the work done. I thanked him for his time and said I’d follow up with him in a couple of months.
With that in mind, my question is this and relates to this situation as well as other similar situations that may come up in the future: When providing a large estimate where the prospective customer initially declines, did you ever call back and offer a slight reduction in price knowing that the sheer size of the job would be worth a reduction in your "average" income per hour? And if so, how did you handle such a callback situation? Would appreciate your input!
Many thanks,
Dale
My Response:
Hi Dale:
Good morning. It’s great to hear from you.
First of all I’d like to stress that not everyone will say "yes" to you. There are a variety of reasons why. One of the reasons of course is price, but stick to your guns. I got off the phone yesterday with someone who says he is routinely upping his estimate prices and folks are jumping on board without batting an eye. So just because one prospect is balking at your price, I wouldn’t allow this one person to alter your pricing strategy at all. Some folks have no idea how much window cleaning costs and they think they can get their whole house done for $50. So good luck to ‘em.
Now on to your specific question. I would never, ever, ever reduce your price after it’s been presented. It’ll make you look terrible and have the prospect thinking "why didn’t he offer this price initially". The prospect will feel like you’re taking advantage of him and that’s no way to build a solid, trusting relationship. The best thing you can do is promise to follow up with the prospect like you did. Maybe between your presentation and your follow up phone call, the prospect hired someone else for a little less money, but he did a terrible job. This happens a lot. So stick to your guns and don’t budge on price.
An additional note since we’re talking about pricing…some window cleaners make the critical mistake of defending their price at the door. I wish those window cleaners could listen in on some of my phone conversations with other window cleaners who are going in with higher prices and closing the jobs. But back to these window cleaners who defend their pricing….they don’t have confidence in their pricing, so they present it in such a way like this: "Lots of windows and time required for this job. I normally do it for $220 but for you today I’ll do it for $180". So they’re in defensive mode immediately. Then they compound the error by offering a "discount". By doing this, it’ll group these window cleaners in with all the other window cleaners out there who fight it out over price.
To provide you more information, I don’t know if you remember reading in my manual about when I would give an estimate and then if I wasn’t successfully in my follow up efforts, I sent them a flyer with a coupon offering them a discount. It didn’t work.
So again, the best thing you can do for your business is stick to your guns and feel comfortable with your pricing for the service you provide. Never go back on it.
What you might want to do though is do some testing until you come up with the right pricing for your area. A good rule of thumb is that if you close 80 to 85% of the people you present estimates to, your pricing is right on the money. If you’re closing almost everyone, your pricing is too low. Yes…you might have lots of jobs, but your profits and per hour pay won’t be where it needs to be. And if you’re closing somewhere around 50% or so, then you’re pricing needs to be lowered. 80 to 85% closing ratio is the perfect ratio giving you the best profits with plenty of customers.
One final note in the future. Assuming this $436 comes up again just using this as an example, but if you feel that there might be extra profits in this $436 price, and you think you can still make some good profits by lowering the pricing, then for sales purposes present it as $395. Usually with a job this size, your completion time will be fine which will make up for the small drop in price. Make sense? Normally I don’t advocate a drop in price at all, but a $41 drop probably will not hurt your hourly pay at all. I’m just suggesting this as an alternative because $395, $396, etc, sounds better than a number over $400. On the other hand though, if your true estimate is $450, $460, etc, there is no way you can lower it below $400, so in this case raise it a few bucks. You’re already over the $400 threshold so another few bucks won’t affect anything.
If you have any more questions about this, please give me a call. In the long run, as long as you stick to your guns, don’t play the pricing game, and present estimates you feel provide value for the service you provide, you’ll secure plenty of "quality" prospects.
Take care for now.
Regards,
Steve
256-546-2446