Twitter provided some good commentary as usual this week. And it was started by FENSA when they posed the question: With the rising costs of transport, what do you think about installers charging a quotation fee?
I have written about this issue before in a post earlier on DGB. I floated the idea of charging for quotations due to the rising cost of fuel and transport. Whilst many agreed it was common sense. Most also pointed out that it wouldn’t work. And the same goes for the question raised by FENSA. Whilst some would charge for a quotation, you can absolutely guarantee that others would not and use it as a selling point against the others. Despite common sense now suggesting that charges have to be now worked into prices to account for the traveling time done by the sales staff.
Conversation then moved on to the subject of prices in general and what was said to customers if they suggested they could get a cheaper price. My reply was “see ya!” Or words to that effect. And I think I am absolutely right. There is no point at all when margins are so tight and business so competitive that we should be bowing down to customer demands for discounts and cheaper prices. I say let them go down the road and get it cheaper. They will invariably getting a worse installation and a lesser product because of it, letting that company put their name to a potentially rubbish job.
Everyone else seemed to agree to that same principle which was good to see. I firmly believe that if you can sell a quality product, backed up by excellent customer service and attention to detail, you don’t need to be weak and sell on lower prices. Weak salespeople do that…in my opinion! I have never once sold on price, I have always sold on quality and service and it have almost all the time allowed me to earn something decent out of the job and most importantly earn a decent margin for the company.
As our industry starts to get back on it’s feet, right now it is very important we are not busy fools. We absolutely must be making something on the contracts we sell. Continuing to sell at lower or zero margins is harmful to a business. Excuses like “trying to keep the fitters busy” and “getting profile through the machinery” isn’t valid and never really has been.
Ask yourself this question: why are you in business? If the answer is to make money, but you are not, then you are doing it all very wrong. A big key to this is having a team of sales people who aren’t afraid of price and are prepared to sell based on the quality of the product and service you are selling. Unfortunately I hear of far too many stories about sales people referring straight back to pricing and losing the will to sell at a higher margin for fear of losing the job.
The way to stop this is for companies to stop giving sales staff discount structures to use. If they are there, the temptation will always be there to use them. We have never once used a discount structure and never felt the need to use them. We have currently 32 years trading under our belts.
So, if a customer comes to you and says they can get it cheaper elsewhere, wave them on down the road. You have put your profit margin on the job for a reason. Don’t give it up based on a threat to go elsewhere!