Lost out to a cowboy again? It’s always frustrating when that happens, especially when you know you’ve been undercut on price but not quality! In the first of this two-part series from the Next Level Tradie, you’ll find tips on how to win jobs even when you’re not lowest on price.
Picture the scenario:
Local landscaper Josh is fuming. He’s just learned through the grapevine that he’s missed out on a major landscaping job. The local cowboy has undercut him again – by nearly a third this time! There’s no way he could have made any money at a rate that low. At that price, it would have only covered the materials and labour.
He’d had an inkling when scoping the job that Mike (the client) might be shopping around. It looked relatively straightforward initially, but from experience, Josh knew a few extras would be needed.
He didn’t have time to explain all this to the client that day; he needed to be at the next appointment. “Don’t worry about the details mate. I’ll put it all in the quote and email it to you when I’ve got time,” he said.
A job he thought was in the bag was gone – and not for the first time. These cowboys were starting to affect business.
What went wrong?
When Josh first scoped Mike’s job, there were a few opportunities he missed that would have put him in a better position against the lower price:
• Asking the right questions early on to see if the job will be a good fit (so he didn’t waste time quoting a job he couldn’t make money off – or was never going to get). Josh still doesn’t really know if Mike wanted a cheap price no matter what, or if he took the cheap price because he didn’t know any better.
• Checking if Mike was the decision-maker or if others were involved, such as his wife.
• Not taking the time to listen to what aspects of the job were the most important to Mike (like the timeframe, quality of work, dealing with the unexpected, or staying on budget).
• Making sure Mike understood what was involved in doing the job right by giving him
context around what could go wrong if the proper steps weren’t followed.
• Identifying the budget Mike had available.
• No follow-up to show he was serious about wanting the job and to address any concerns Mike might have about proceeding.
What went right?
Josh is a good landscaper and has a great team behind him. So, although he didn’t get the job, he also knew that at two-thirds of the original price, it wasn’t worth having. Josh knows his numbers and has a good reputation. His business is in it for the long haul, so he:
• Priced the job for profit (not based on gut feel, guesswork, or how he was feeling on the day) and knew that it wasn’t too high or too low.
• Knew his margins and at exactly what point the job wasn’t worth doing.
• Didn’t panic, slash his price, and lose money on the job.
• Has high standards of workmanship and was not going to take cowboy shortcuts.
• Has a professional mindset; Josh knows he delivers top outcomes and quality work for his clients and that he deserves a fair reward for his efforts.
Client's viewpoint
We all like a bargain. It’s human nature. As such, clients will always be tempted to go for the cheapest option if they don’t understand the reasons not to.
Here’s the thing, though: most clients you quote aren’t tradies or don’t know the details like you do. They simply don’t know why one price is more expensive than another – unless you show them.
Remember, a percentage of all buyers will decide purely on price no matter what. Let’s recognise that those jobs are often the ones that don’t make a profit and have the most problems. Weed these ones out early. These are not the jobs you want.
You want to attract the majority of clients who appreciate good-quality work and want something that will last, and a finished project that provides them with peace of mind that the work was done right and there won’t be any nasty surprises.
This is part one of a two-part series. For tips on how to win jobs when you’re not the lowest price, check out the next issue!
Trades business coach Daniel Fitzpatrick of Next Level Tradie has been helping tradies build businesses they are proud of since 2010. Want to grow your business without the stress? Book your free growth
strategy session with Daniel at: nextleveltradie.co.nz/nextstep