Should We Give In to Price Shoppers?
November 20, 2008
A nice older gentleman stopped by my office the other day. He was well dressed and well spoken. He seemed to fit our typical client profile. He said, "I've been meticulously reading your ads in the newspaper and I wanted to stop by for a quote." I smiled and breathed a sigh of relief. This guy should be an easy sell, like most of the prospects from our newspaper ads.
A nice older gentleman stopped by my office the other day. He was well dressed and well spoken. He seemed to fit our typical client profile. He said, "I've been meticulously reading your ads in the newspaper and I wanted to stop by for a quote." I smiled and breathed a sigh of relief. This guy should be an easy sell as are most of the prospects from our newspaper ads.
I began to ask the man questions about his home and the rooms he wanted cleaned. He went on to tell me about the other carpet cleaning companies he'd hired in years past. He told me they were either out of business or did such a poor job he wouldn't dare hire them again.
I went on to explain my cleaning system and how we go above and beyond other cleaners in our town. "I get my carpet cleaned every year right before Thanksgiving, so I'm familiar with the process", he said with a closed minded yet eager to buy tone.
So I quoted him a price of $195 for the areas he wanted cleaned. "That's outrageous! I've never paid more than $99 to get my house cleaned."
My company has always been among the highest priced in town, so I've heard this exclamation a few hundred times before. However, I've never heard it from a guy who took the time to stop by my shop and speak with me personally. As well, most of the people who regularly read our newspaper ads understand we're not one of the cheap guys in town.
So I asked him our scripted question when we get price resistance: "Is it important for you to hire a company with a good reputation?” Just as I told him before I quoted the price, I reminded him of our excellent reputation and offered to give references for several flooring retailers we work for. I told him how many other carpet cleaning companies hire technicians without running background checks. I told him how, at the prices they charge, they can't afford the better equipment. They can't afford to take time in his home to do a quality cleaning.
I explained that if we only charge $99 for all we do, we'd go out of business too. He listened to me for a moment. Then shook my hand, said thanks for my time, and left.
What did I do wrong? Well, I guess I could have explained our cleaning process and guarantee a little better before I quoted him a price. But since he told me he had "meticulously" read all my ads, I assumed he already knew.
Honestly, there wasn't much more I could have done. I don't think it would have helped even if I went into his home and gave him a demonstration of all the things we do. He simply wasn't the type of consumer that had it in his value system to pay more than the average price for cleaning.
I guess he's still under the belief he can hire some poor guy to come out and clean his carpet for $99 and do a great job. So should I cut my prices back to $99? Heck no! I'd be forced to cut back on my service. Eventually our repeat client ratio would go down. My profit would be reduced by at least 33%.
Sure we'd be able to squeeze one more job in each day if we reduced the time spent on every job. But one more job a day just means more wear and tear on our equipment and more possibility of something going wrong on a job. I'm not interested in more jobs. I'm interested in more profit.
Just minutes after the gentleman left, I received a call from a new prospect who saw our newspaper ad. After explaining our process a couple minutes, she was ready to book a $677 job. Now this is the client we're looking for.
The moral of the story is, you can’t clean for everybody. When you lose a prospect due to price, take a mental note of what you could do better next time to sell the job. Then, go find a consumer to convert into a client.