Would You Price Match?

Monique

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Let's say your schedule is on the slow side and you find yourself willing to take on a project you may normally not have done, you have already priced it on the lower end of your pricing structure and they respond to your estimate email with this.
"P*** enjoyed meeting and chatting with S****. We're ready to go with the project if you can meet the other bid of $1200."
That would be taking at least 15% off for a new customer. On the estimate it outlines that the project would cost more if we ran into a very possible situation of having to perform multiple additional steps due to an unknown variable. Funny enough it was the wife that emailed back, but while there during the estimate the husband mentioned we came in less than another estimate they got while mentioning the guy didnt even have the right equipment to do it.
So what would you choose to do offer the discount and stick to a firm price or pass on the job?
 

Cleanworks

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Let's say your schedule is on the slow side and you find yourself willing to take on a project you may normally not have done, you have already priced it on the lower end of your pricing structure and they respond to your estimate email with this.
"P*** enjoyed meeting and chatting with S****. We're ready to go with the project if you can meet the other bid of $1200."
That would be taking at least 15% off for a new customer. On the estimate it outlines that the project would cost more if we ran into a very possible situation of having to perform multiple additional steps due to an unknown variable. Funny enough it was the wife that emailed back, but while there during the estimate the husband mentioned we came in less than another estimate they got while mentioning the guy didnt even have the right equipment to do it.
So what would you choose to do offer the discount and stick to a firm price or pass on the job?
I generally stick to my price. When I do an estimate, I try to price it competitively and if someone gets because they are lower than me, so be it. You only get what you pay for. Case in point, I recently bid on a job in a pub. My price was $700. The guy who got it bid $375. He did the job with a portable and now has to go back because they are not happy. If they went with me, they would have gotten a truck mount, correct chemistry, scrubbing, flushing with the truck, fans to speed dry, blocks for the tables. There is always a certain value in what you do. When they ask for a discount, you can counter with asking what steps would they like you to skip?
 

FredC

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Unless I needed the money I'd probably gamble with the firm price unless this person seems to have something else to offer (connections, other work, etc) provided I was still making a decent profit.


and if it began to happen often I'd probably look at my pricing...
 
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Hack Attack

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Dan
Let's say your schedule is on the slow side and you find yourself willing to take on a project you may normally not have done, you have already priced it on the lower end of your pricing structure and they respond to your estimate email with this.
"P*** enjoyed meeting and chatting with S****. We're ready to go with the project if you can meet the other bid of $1200."
That would be taking at least 15% off for a new customer. On the estimate it outlines that the project would cost more if we ran into a very possible situation of having to perform multiple additional steps due to an unknown variable. Funny enough it was the wife that emailed back, but while there during the estimate the husband mentioned we came in less than another estimate they got while mentioning the guy didnt even have the right equipment to do it.
So what would you choose to do offer the discount and stick to a firm price or pass on the job?
I'd possibly price match for a regular contract if I thought I could see it working.
Price match $1200 for a one off? Nup
 
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Jim Pemberton

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I think it sets a bad precedent Monique.

Your company is built around offering a pretty unique service package, both in process and in how you handle the relationship between beginning and the end.

My guess is that these people are just trying to be (in their view) a smart buyer and using whatever means they can to get the best "deal".

But you aren't selling them a car, you're selling a service where all things aren't equal.

This is especially important with a first time customer. They haven't earned the special consideration someone with a long term relationship with you might. You also don't know the potential pitfalls, odd personality traits, creepiness, unreliability, and any number of other things that can make them a nightmare.

These people need to pay the most, because in reality, new customers are the highest cost and highest risk people to work for.
 

Monique

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I think it sets a bad precedent Monique.

Your company is built around offering a pretty unique service package, both in process and in how you handle the relationship between beginning and the end.

My guess is that these people are just trying to be (in their view) a smart buyer and using whatever means they can to get the best "deal".

But you aren't selling them a car, you're selling a service where all things aren't equal.

This is especially important with a first time customer. They haven't earned the special consideration someone with a long term relationship with you might. You also don't know the potential pitfalls, odd personality traits, creepiness, unreliability, and any number of other things that can make them a nightmare.

These people need to pay the most, because in reality, new customers are the highest cost and highest risk people to work for.
I completely agree. I couldn't see the benefit to price our company based off the overhead another company can operate under. There are also a lot of cleaners in my town that dont price themselves to be able to stay in business for years.
 

Jim Pemberton

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I've responded in the past with this:
I'm not out to beat my competitor on price. I'm out to beat them on quality. My quote is firm.

If I'm slow-- I'd rather enjoy the great outdoors and improve my health.

Ages ago a successful businessman told me:

“If I’m going to go broke, I’d rather do it rested and relaxed than overworked and stressed”

He also told me that price oriented customers are the most demanding, least loyal, most inconsiderate, and often likely to extract refunds if for no other reason than to feel like they “got over on you”.

It is all a zero sum game to them.
 

The Great Oz

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bryan
Discounts require getting something in return from the customer to make the discount worthwhile to you. Otherwise, pass.
Unless I needed the money I'd probably gamble with the firm price unless this person seems to have something else to offer (connections, other work, etc) provided I was still making a decent profit.
If you need the money, and there's still profit there, go ahead. Never believe promises of contacts or referrals. Those are standard cheapo customer BS talking points.

Your service proposals should include your procedures and mention your reliability and responsiveness. The other guys may be doing the same things, but if they don't mention them it seems like you're worth more. That differentiation, explaining the apples and oranges, is what beats the low bidder.
 

Rick J

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rick Jones
I think it sets a bad precedent Monique.

Your company is built around offering a pretty unique service package, both in process and in how you handle the relationship between beginning and the end.

My guess is that these people are just trying to be (in their view) a smart buyer and using whatever means they can to get the best "deal".

But you aren't selling them a car, you're selling a service where all things aren't equal.

This is especially important with a first time customer. They haven't earned the special consideration someone with a long term relationship with you might. You also don't know the potential pitfalls, odd personality traits, creepiness, unreliability, and any number of other things that can make them a nightmare.

These people need to pay the most, because in reality, new customers are the highest cost and highest risk people to work for.
For new , customers, I will give a discount. (Those whom I would like to become clients) I make clear that they are getting a getting to know each other discount. Hopefully, being able to interact with them some. (and, because , let's face it , in the end you may not want to work for them!!!) I invoice them my charge for the service, then on a separate line CLEARLY note the one time discount.
 
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Cleanworks

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I am assuming they went another route since I haven't seen a response to my email letting them know we had to hold firm to our price.
Sometimes it's good to give them a call in a week or so to see how the job went. You will be surprised at how many times they will complain to you about the other company. Rather than say, "I told you so", it gives you an opportunity to let them know in the future, your price includes steps that might not have been done by the other firm as well as your guarantees.
 

SamIam

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Let's say your schedule is on the slow side and you find yourself willing to take on a project you may normally not have done, you have already priced it on the lower end of your pricing structure and they respond to your estimate email with this.
"P*** enjoyed meeting and chatting with S****. We're ready to go with the project if you can meet the other bid of $1200."
That would be taking at least 15% off for a new customer. On the estimate it outlines that the project would cost more if we ran into a very possible situation of having to perform multiple additional steps due to an unknown variable. Funny enough it was the wife that emailed back, but while there during the estimate the husband mentioned we came in less than another estimate they got while mentioning the guy didnt even have the right equipment to do it.
So what would you choose to do offer the discount and stick to a firm price or pass on the job?
If you can cut cost and perform a good job maybe....


But it all depends on th variables.
 

Mr Brightside

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When I have been in the same exact situation one way I feel I usually win these accounts is sticking to my price but maybe offering something of VALUE to them that doesn't cost me much to give them. I would tell them that the price I offered was competitive and that you wouldn't want to have to cut corners to make it work but you would offer them deodorizer or protectant ect at (insert value) for free to earn their business.
 
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SamIam

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I completely agree. I couldn't see the benefit to price our company based off the overhead another company can operate under. There are also a lot of cleaners in my town that dont price themselves to be able to stay in business for years.
If it comes down to filling the schedule yes.

If there are ways to cut corners or speed up to make it yes.
 

steve_64

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I have a pub that hired the cheap guy, got a lousy job but blew the budget for the year. He'll probably call me next year.
I am starting the local truck stop this weekend. He the owner wanted cheaper I stopped returning his calls. The manager called and asked when can I start.
They need it done well more than I need the money.
 

aaronjumps

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Ages ago a successful businessman told me:

“If I’m going to go broke, I’d rather do it rested and relaxed than overworked and stressed”

He also told me that price oriented customers are the most demanding, least loyal, most inconsiderate, and often likely to extract refunds if for no other reason than to feel like they “got over on you”.

It is all a zero sum game to them.
I needed to read this today. Thanks for posting it.

Back story: I put in my first bid for a commercial job today that is big for me, and I knowingly raised the prices from what the previous guy quoted because there is a difference in quality.
 
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Cleanworks

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I needed to read this today. Thanks for posting it.

Back story: I put in my first bid for a commercial job today that is big for me, and I knowingly raised the prices from what the previous guy quoted because there is a difference in quality.
That's great as long as you can spell out that difference for the client. Otherwise, they tend to go with the low bid.
 
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