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View Full Version : i have proof than service/quality beats price



huggytree
01-09-2009, 05:14 PM
This is more of a pep talk to all of you who are thinking of slashing prices to stay in business.

i had 15 builders that i worked for at this time last year....i lost 6 of them to cheaper plumbers that spring(i was dead slow last Feb/March because of this)....3 of the 6 have come back to me!...the grass wasnt greener....the 3rd one just called today with a project....nothing makes me smile more than a satisfied customer coming back..

i hear stories of missed schedules, prices increasing slowly on each new job, talking too much with customers...

i have not lowered my prices unlike many of the local subs have...i do spend more time explaining why im more expensive and why low price is a bad idea.

I take it personally every time i lose a customer...im usually down in the dumps for a couple of days, but ive never feel too bad if its over price...its the only reason i want to ever lose a customer.

Quality & Service will always beat price in my type of business.

vangogh
01-09-2009, 06:50 PM
Agreed. People shop on value and not price. When people are looking for the lowest cost it's because they don't see the value in something. That's not necessarily bad either. One person buys a Ferrari. The nest just wants to get across town reliably and buys a Honda.

One part of my business that makes me the proudest is how much repeat business I get. Most people I've done work for have come back to me for more work later. Some may have tried another designer/developer, but most still come back.

Some people will always shop on price alone, but the majority shop for value.

seolman
01-09-2009, 10:32 PM
Couldn't agree more. Whenever a customer says "I can get it cheaper over there" I always say "go over there". People who don't recognize value deserve what they get. We have a lot of loyal customers too. People who've been with us for years and many like yours Huggy that left and came back :)

KristineS
01-10-2009, 10:15 AM
I'm a firm believer that quality and service are far more important than price. I've seen people leave for price and then come back a few months later because they weren't getting deliveries and service was bad. We just smile and take them back.

Repeat business is a great hallmark of how well you're doing. Plus repeat customers cost your business much less than going out and finding new customers.

I think it's great that you're sticking to your guns, Huggy. Keep it up, it's obviously working.

billbenson
01-10-2009, 11:48 AM
It's not just quality as well. If a customer calls for price and I can email them with a quote while we are talking on the phone, I usually close the deal. This includes purchasing agents. Its just plain people get lazy. Every few weeks, someone will ask for a discount. I inflate prices so I can discount at normal margins. They rarely ask for a discount though.

I guess you could say that getting a quote in the customers hands asap is good service. I'd say it falls more in the area of good salesmanship though.

I do get RFQ's that go out to the world. I put those low on the priority list because I don't discount them and we almost never get them.

My stuff is all b2b though, which is different than consumer. I know I price shop as a consumer.

greenoak
01-10-2009, 01:07 PM
i totally agreee on plumbing and most any other service...i would never drop a good service guy for a 20% or 30% difference in price.....maybe it would tempt me if the cheaper guy was highly recommended by several people, but if someone does a good job and is reasonable i dont price shop for service.....



but for retail its another story..as a buyer i have to look at price...i want to be competitive/realistic.....i lose lots of sales becausue they can get the same thing on line or at the big boxes cheaper than i can provide.....obvious to say get different stuff....but i need popular middle of the road things too....and way too many of the companies i used to buy from now sell online themselves, or sell the same stuff cheaper to bigger places....so im dropping some things the customers think i would have...but they want it at a price i cant have...

my thing is great value at a fair nice reasonable price..and we have survived after lots of other higher priced places have folded.... its so easy to price too high in antiques...
..i dont want to be the highest price around....this has worked for us for a long time and has attracted some real well heeled buyers as well as average home owners....... its a fine line...ive found rich people really care about their money.lol.!!!.and can appreciate value and a good deal at the same time...
what messes us up is starting with one price thats on the edge, and slowly slipping into a smaller and smaller margin.and after ive already comitted to the project or line or whatever...
.

Blessed
01-10-2009, 05:03 PM
This is one lesson my dad taught me well - you get what you pay for! It doesn't mean you have to use the most expensive plumber or buy the fanciest car or etc... but you do have to do your research first and buy second - that way you know what you are getting and when quality and service really matter you can spend a little extra to get it.

huggytree
01-10-2009, 05:31 PM
what i find is people will buy the most expensive fixtures and hire the cheapest plumber to install it...they see value in physical items, but no value in labor...a plumber is a plumber to them...i have swayed some of these type of customers after explaining the differences...

Aaron Hats
01-11-2009, 04:10 PM
I hate that nearly every morning show on tv, it seems at least once a week, tells people to ask for a discount in any and every store they walk into. It happens all the time that a customer will ask for a discount in our store. My response varies widely depending on the mood I'm in. As an example, yesterday a gentleman brought a hat to the checkout. He asked if it was on sale. With a smile on my face I said "yes, it's on sale for $68". He knew that $68 was the price on the price tag so he said "how about $60?". I said "how about $69?". He smiled then handed me his Discover card. Most people are understanding when I tell them no discounts but a few will think they're entitled to a discount and get upset. That's when I tell them Walmart is two miles down the road.

billbenson
01-11-2009, 04:18 PM
Gee, I don't know; or I gotta talk to my boss also works well.

Vivid Color Zack
01-14-2009, 12:33 AM
Gah. Such a touchy subject for me. We're happy to match prices of our competitors most of the time because the great majority of printers overcharge their customers like crazy. But when someone wants our premium card stock and fancy options and then tries to get us to meet prices for work that is in no way comparable it's really hard to not get frustrated. Most people don't see that not all things are equal. A business card or postcard can range from dirt cheap to a few hundred dollars with different options and having to explain that all the time is a tongue in cheek routine for me.

ShopLady
01-14-2009, 09:11 AM
Oh meh...this is where I am reminded about how long I've had the "If I don't charge an arm and a leg, people will buy from me" attitude. And in the long run it ended up hurting me business-wise. Plenty of people, close friends even, asked why my prices were so low at one point that I'd only make just under a dollar for a sale. I'd tell them, "Hey, not everyone in the world has loads to spend when it comes to having spare cash!" but then after a while I got over myself. Seems that there are people out there who look at what you charge and through that they determine how much pride you take in your products, your mission, etc.

It's a double edged sword, really. No sweat though! I think if you have enough confidence in any service/product you have to offer, people will be more drawn to that than the price tag.

vangogh
01-14-2009, 09:57 AM
Even though we all know it's not really true, people relate price to quality. If someone sees one company charging more than another, one of the natural thoughts is they must be better, even though they may just have higher prices.

On the other side if everyone in an industry charges $100 for something and you charge $50 the question is why are you so low. And the answer people tell themselves is you must not be as good as the others.

billbenson
01-14-2009, 12:39 PM
Years ago a friend had a bunch of retail stores selling high end womens clothing. They closed a bunch of stores. They marked up radically the products and had a going out of business sale - 50% off. Sold out in a flash.

I don't necessarily like the ethics of that. But it is an example of real price not being an issue.

huggytree
01-14-2009, 08:51 PM
i very rarely have people ask me for discounts...i never give them...if i get a job done early i may do extra for the customer without charging...

i had a guy ask me on a bid job 'if you get done early do you minus those hours from my bill?'....my response was 'if it takes longer can i add onto your bill?'....it was a smartass response and lost me the job, but i was in a bad mood and couldnt miss the opportunity for some stress relief....i did feel good after i said it....and i probably wouldnt have gotten the job anyways....i know it wasnt professional and i havent done it since.

nealrm
01-26-2009, 11:33 PM
When you have a quality product with good service customers will know. Earlier this month my wife and I did a cost of living price increase. We were very worried about how the real estate agents would handle the increase. So how was it taken ............................ we receive 15 letters from different agents thanking us for our services and support. Business did not drop off in the least.

In short, people are willing to pay for quality and service.

vangogh
01-26-2009, 11:50 PM
When you have a quality product with good service customers will know.

Absolutely. In fact that's why you don't really need to use good customer service as a selling point. You just have to practice it. I think there will always be some people who don't see the value in good service. To them the lowest price is the best value. But most people do recognize good service and are willing to pay a little extra to get it.

Ad-Vice_Man
01-27-2009, 02:27 PM
more fun responses...

sure i can knock 10% off can you just fill out this 10 page rebate form.

or.

Sure I just need you to sign up for our credit card :)

ShopLady
01-28-2009, 01:27 PM
I am understanding more and more the quality side to pricing. Just recently I changed the brand of tees in my shop to American Apparel and I've gotten a few good bits of feedback from it. The prices are a bit higher than they had been before but at least I know my customers will be recieving good quality, and that tends to bring people back.

KristineS
01-28-2009, 03:39 PM
I think the deal that a lot of retailers think they're making with consumers is this: we'll give you low prices and you don't expect much in the way of service or support. It's basically the Wal-Mart way of doing business.

The problem is that consumers don't always hold to the deal. Even if you're paying a lesser price, you're still paying out your money, and you expect the maximum return for it. A dissatisfied customer is still going to expect you to make it right, whether they paid a premium or a discount price.

Personally, I'd rather sell a higher end product and be relatively secure that it will work properly and please the customer.

Oneseoasia
01-30-2009, 04:26 AM
Yeah That's True. Because if you always compete with the price, there are always other companies can offer a cheaper rate than yours. What's important is you help customer to see your values so that they will stay with you : )

cocoy
02-04-2009, 10:42 AM
I have recently lowered my price for my "filler" work. I offered the same or a bit lower than the competition, but came out with nothing. I talked to my realtor friend and she said those prices are way too high for what realtors are willing to spend. So I lowered the price and started getting customers. I started a CAD service and decided to market floor plan services to realtors. Seemed like a quick in and out type job.

huggytree
02-05-2009, 09:46 PM
coco

slippery slope...you are getting work at less $ than you want to...instead of finding customers who will pay what you want to make. when your work load is full of cheap customers how will you find room for the higher end ones?

will your service/quality slip because they are cheap customers and you wont care as much?

you create your own customers.you determine it!...not them!!!

i have 1 filler customer...its a home warranty company....they will not pay a trip charge, so when they ask how many hours i start the clock when i leave the last job...basically a hidden trip charge.....i make slightly less money and the jobs are all small....no chance any of these customers will ever use me or refer me...they are all bad customers i wouldnt want...i started not even leaving cards with them...i want them to forget me...its not the customers i want, but it gets me an extra $400-$1000 a month..but once again its alot of phone time and screwing around for $150 per trip

Steve B
02-06-2009, 05:51 AM
"no chance any of these customers will ever use me or refer me...they are all bad customers i wouldnt want"

It's hard not to comment on this Huggy. Really, they are ALL bad and there is NO chance they would refer you? I don't know how you can be so sure. For the cost of a couple business cards and a smile - you might be surprised what might be the result from these trips. Even if the answer is that only 1 or 2% of them might refer you - I would drop off a business card.

It sounds like you live in a fairly small community - if you really want them to forget you, you might want to consider not taking your normal work van with your name plastered on it and wearing a disguise :) If they get a sense on how little you value them as a customer, you might get the wrong kind of referrals from them.

huggytree
02-06-2009, 09:07 AM
im in the Milwaukee area...nope not a small area at all!

oh yea im sure id get 1-2% of them...but id also get 50% asking for prices , bids, and advice and wasting my time. Chhhheeeeaaaappppp is the one work which describes all of them...i had a faucet issue last week and i told them it wasnt covered and would be $175-275 to fix....he said 'your kidding right?'...(my charge is $150 for the first hour)...these people brag about how cheap they are to me....they all are complainers too....

imagine your worst customer....that exact personality type is who is drawn to this insurance service...does it mean they might have a friend who needs my card who is normal? maybe...ill rethink it.

i really thought this insurance company would dump me because im too high priced.....ive had a few decent projects from them....the jobs just keep coming though...maybe no one else wants to work for them......i was told about the upsell factor...zero chance of it...these people dont want to even pay the $60 co pay for what i do let alone pay me a few hundred more to do something.

cocoy
02-09-2009, 03:22 PM
Nope. Quality won't be reduced because these are "cheap" customers. I don't do that.

Secondly, my customers are real estate agents and they're cheap. ;) This is something they buy to help market the listing. It's not an item they keep forever or something that becomes an investment in their home. 95% of my clients are agents selling high end properties. When they have cheaper property to sell they don't bother with me.

6 months at my high prices and not one customer. Even at my current prices some people still think it's too much.

I understand the set your price thing and "cheap" customers. I've read that in every marketing book or article. I just believe my original price is too high for my market.

Not sure why you would price this warranty company lower for the same service you would provide to other customers. Especially if you don't like to do it.

Also these people bought the insurance for a reason. They want to avoid paying for repairs in the future. Of course they're surprised when you tell them something that broke isn't covered by the warranty. Typical uninformed home owners who didn't question their warranty service contract.

Up selling to a customer who called about warranty work and then them finding out certain items are not covered isn't going to go well. It doesn't have anything to do with them being cheap.

Steve B
02-09-2009, 06:52 PM
"imagine your worst customer...."

Believe it or not, I only have ONE that I wouldn't enjoy working with again. I have several hundred that I've worked with. The vast majority have been a pleasure to work with - probably because they are buying an "optional" product and not forced to buy a repair like they would if they had a plumbing problem.

cocoy
02-10-2009, 11:29 AM
Yup. You have to look at it from your customer's standpoint.

They called a plumber cause something went wrong. It's unplanned spending on their part. Chances are they won't be happy when they get the bill.

Just H
02-10-2009, 03:53 PM
We've been brought up in a society where some things you never pay the sticker price for and others you just plop on the counter and pay what it rings up to and still others, often have "hidden" discounts but you have to ask for them. It's really very confusing. And then you get these different personality types who can bully their way through anything or those who find it hard to stand up for themselves and pretty soon everything becomes negotiable. When someone does this to me, I feel like they're saying, well I want the best job you can do but I'm going to pay you much less - which I take to mean they don't think my services are worth much (to which I want to say, "Just do it yourself").

There seems to be a definite emphasis on the material aspect and not nearly as much concern on how it's done - that is, until something doesn't work right. I've found that many businesses starting out will do things for much less and be more negotiable too feeling that they need to prove themselves. Which is true to a point, but I don't think you have to sell yourself short in the process.

When you look at the middle ground, there are probably some ways to give the customers more than they expected and not work for nothing. Perhaps in the plumbing example, going into a local restaurant and making a deal with gift certificates for X number of them at $20 each (or trading a plumbing job for some money and the rest in certificates so you don't have to outlay the money). They know that the typical couple always comes in and spends say $40-50. So if you could get them for $15 each and send out to as a loyal customer thank-you, they'll be more likely to want to go out to eat, give more business to the restaurant and think more highly of you for thinking of them and giving something back when times are tighter.

huggytree
02-11-2009, 05:23 PM
of my normal 'home owner' customers ive only had a 2 or 3 i wouldnt want to work with again

of my builder customers id say 25% i wouldnt want to work with again

of my home warranty customers id say 50% i wouldnt want to work with

ive been getting pretty much my normal pay scale for the home warranty...i over charge hours to make it up...i always think they will dump me over price, but they keep coming back....today i got $200 to pull/reset a toilet....i hate that dirty work...took me 20 minutes, but my normal rate is $200 for the task.....they paid it no problem....

they dont pay the trip charge....but i always add an extra 1/2 hour to get it...i overall try to keep my prices lower just to keep them as a customer...its busy work i want to keep...$1,000 extra a month. and i rarely work 40 hours a week, so why not.. when i say i charge them alittle less were talking 5-10% at best.