The word “profit” has become a bit of a bad word in business over the past few years. Big businesses managing to escape paying a large amount of tax, bankers being paid massive bonuses, the banks that employ them making record profits. While the economy has suffered for so long, and people have had to tighten their belts, the image of profit has certainly taken a bashing. Totally unjustified if you ask me!
We’re not in business for the good of our health. We’re in business to sell windows and doors and make money for ourselves whilst doing so. Why then operate a business in a way which limits the ability to make profit?
Profit is what allows a business to grow. Profit allows owners to invest more cash into the business to help it develop. This money could employ more staff, expand advertising, build a better website, buy a showroom, fill that showroom, pay for company cars. The list goes on. Profit is the lifeblood of a business. So it is immensely frustrating to see companies using sales tactics that undermine the making of profit, or by using tactics that can eat into their own margins.
“We beat any genuine like for like quote”.
This is a sales tactic that baffles me. Why would any company put themselves in a position to purposely undercut other companies? What is worse, if that company’s competition knows this is going on, what’s to stop them purposely pricing low in order to force them into pricing at a loss? It’s irresponsible and certainly not a long term successful sales plan.
Undercutters should always go to the wall
Whatever happened to selling on the back of the quality of your product, service and company ethos? I know things are still a bit tight and competition is just as fierce, but surely undercutting your opposition only puts your own business at greater long term risk?
Short term, a company could survive by beating a few quotes. But the margins on those contracts will be little to nothing. Long term this is now way to sustain a business. Breaking even gets you nowhere. Even the smallest mistakes start to lose a company from that point onwards.
But what frustrates the good companies the most is the fact they lose business to the undercutting companies without a backbone. Ethical selling is done on the back of quality products, quality customer service and a good ethos. Not undercutting or cutting corners on the quality of the product or installation. So when a good company loses to another on the basis that they’re suddenly cheaper and will probably use a lesser product, that’s what hurts. You know that the homeowner is likely to get a job of lesser quality, and will probably end up paying the price for it. It wouldn’t be so bad if a bunch of quality companies were fighting it out and won business on the back their products. I don’t think any company would begrudge another on that basis. But when less than reputable establishments start undercutting left right and centre, it sticks in the craw. It’s a pet hate of mine, and of Heath Windows:
@glazingblogger I would say we are up on sales but then it is very unpredictable. Lots of companies giving it away!!
— heathwindowsltd (@MiallHardwick) March 11, 2015
@glazingblogger I know I keep moaning about it but if we all set a bench mark we’d be benefiting each other! They are hurting the industry! — heathwindowsltd (@MiallHardwick) March 11, 2015
If you read our Twitter conversation that followed those tweets, they raise good points about selling on quality and not cost. All points that I can fully agree with.
In the end, I hope that karma comes round to bite these sorts of companies on the arse good and proper. They do absolutely no favours for the reputation of our industry. Their flagrant disregard for how to run a profitable business puts their employees at risk, as well as their suppliers. They will always be around so long as there are weak sales people in our industry. It’s just up to the good guys and girls to persuade homeowners to go down the right route.
All comments on this are very welcome. If you are a company that does sell price, it would be good to get your perspective.
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