By Craig A. Shutt
Who hasn't heard a client say that he needs to get another estimate? You know he's just looking for a cheaper price.
A remodeler who loses a project because the client balks at the price didn't lose the job because of his high prices, says super-salesman Chuck Reaves. He lost it because he didn't explain how well he could meet the client's needs. "Price is never the reason a customer says no," says Chuck.
A former top salesperson for AT&T and now president of Twenty One Associates, a sales-consulting firm, Chuck stresses that "Price is never a valid objection. You have to convince customers that they are getting value that's well worth the price being paid."
When remodelers allow clients to focus on price, they really denigrate their own unique design and construction skills, he says. Less sophisticated or inexperienced staff members who believe low prices are the customers' paramount need tend to sell the project almost as if it were a commodity. When a company sells on price, another remodeler who wants the job badly enough to settle for less profit can quickly undercut what you think is the absolutely lowest possible price.
Accentuate the positive
Value-added selling focuses on the services that support the project: rapid response to concerns; smooth and effective communication; respect for the homeowner's individual needs, etc. The key is to stress these services rather than simply hype the finished product or brands being used. "More and more companies – large, medium and small – are turning to value-added selling to keep their companies financially healthy," Chuck says.
Remodelers who focus on services and take the emphasis off pricing are often pleasantly surprised to see sales increase, he notes." If we can demonstrate and maybe even quantify the true value of our product or service, and we do it in a way that the customer perceives as having value, then the customer will buy from us at the higher price."
The key to competing on a value-added basis is to know what your competitors offer and where your own strengths lie. Determine what you offer that sets your company apart, and emphasize the strengths that your clients most value. Ask them what three things about their project are the most important to them. Is it on-time completion? Quality workmanship? The crew being at their home as scheduled? Respect for their home and family? Customer-satisfaction surveys can show what clients like best, too, and they should ask about where the company can improve.
The services that clients value most may vary from one customer to another, Chuck cautions. Listening closely to what clients say can be the key. "Asking questions brings out the information we need," he says. "Doing our spiel only sends information to the other side."
Unfortunately, most clients don't know what they really want or how services will benefit them, as they most likely have never had their homes remodeled. But they are nervous and need reassurance.
"The most important function of the sales person is to teach their customers about the company's capabilities and value," Chuck says. "Then we can ensure we give them exactly what they need."
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