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Customers balking at prices

Someone a while ago had a list of about 20 or so reasons that justified the prices that they were charging to the customer. I was wondering if that person could post it again. It was a good reference to reason with the customer.

Andy Morgan

Riverside Mechanical, LLC

Comments

  • DanHolohan
    DanHolohan Member, Moderator, Administrator Posts: 16,093
    Here you go:

    We're probably not the low-bidder

    It pays to wander off the Wall.
    Retired and loving it.
  • Geo_21
    Geo_21 Member Posts: 1
    Low Bidder

    Dan,Great letter but if your willing to fix freddy Flunkies mistakes whats to stop the customer from giving freddy a shot,hey,Dan will be there if he screws up?.This happens to me all the time,Freddy drives off in his 1981 chevy with 8 or 10 large and I'm left with an angry customer trying to explain my houry rate?.
  • Steve_35
    Steve_35 Member Posts: 546
    Go to flat rate

    Ultimately many people work an hourly job and relate what you charge per hour to what they make per hour. In most cases people have no clue what companies they work for charge per hour for their labor. In many cases they feel you put most of that bill in your pocket.

    The bottom line is a service business is one of the most expensive, hard to make a profit businesses there is. You owe it to your family, your employees, your clients and yourself to charge enough to cover all of your expenses including providing a decent wage, health care and hopefully a retirement plan for your employees. AND make a profit.

    Flat rate does help you do that while allowing you to expand the quality of service you give your clients.
  • Mad Dog_2
    Mad Dog_2 Member Posts: 3,471
    If the customers aren't complaining about your prices...........

    you aren't charging enough...............Word! Words to run your business by. Not my words, but from a 3rd Generation-run company near me. They comfort us as we bid and when we don't get jobs we should. Mad Dog

    To Learn More About This Professional, Click Here to Visit Their Ad in "Find A Professional"
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  • clammy
    clammy Member Posts: 2,766
    a phrase i say to all

    The phrase i say to all my possible custermers id the sweetness of a cheapened price is soon forgotten after the bitterness of poor quality ,Just finished one where the custermers daughter did not like the price (she's moved in and is taken over the parents house at 52 with out the parents realizing it )she balked and complained it was to high i had looked at the job from working at one of there sons homes .Funny thought i would never hear from them the parents made the right descission i just finished installing a munchkin to replace there 1953 us raditor boiler and it's 400 dollar a month heating bill .if they don't like the price the first time they are not going to like the bill to straighten it all out .Peace and good luck clammy
    R.A. Calmbacher L.L.C. HVAC
    NJ Master HVAC Lic.
    Mahwah, NJ
    Specializing in steam and hydronic heating
  • John Barba_2
    John Barba_2 Member Posts: 92
    A smart guy taught me these essentials years ago...

    1. If you get every job you bid, your price is probably too low.

    2. Figure out what your "share" of the jobs should be. Is it 2 out of ten? 3 out of ten? 4 out of ten?

    3. If it's 3 out of ten, you're going to fail 7 out of 10 times. It's going to happen. Those are the folks that will balk about price, or the terms, or the color of your van, or the length of your hair (back when I had more of it), or whatever.

    4. So count on the "no's" as part of the process you need to go through to get the yes. It takes the sting out a little.

    5. It's more than frustrating wasting all that time and then not get the job. It makes us mad and it's disrespectful, but people who sell anything all the world over face the same problem, and have for decades. It's part of the process. Deal with it and move on.

    6. Three out of ten and you're an all star. Four out of ten and you're on your way to the Hall Of Fame. Don't worry about getting 'em all, just try to get one more than you're getting now. It's a start.

    Hope this helps...

    JMB
  • A.J.
    A.J. Member Posts: 257
    well said

    Not to mention that you don't want them all. Go with your gut some people are just to draining.
  • S Ebels
    S Ebels Member Posts: 2,322
    Andy

    Read my post under Hunt's "World's youngest steam system" It's toward the bottom.
  • GW
    GW Member Posts: 4,576
    when did he say that?

    That teaching must go. Business owners need sales training. If you think that notion is a joke AND you're successful, you have beaten the system and that's rare. The rest of us mortals typically scrape by with 1950's business methods. Today, success and flat rate go together like meat and potatoes.

    I used to be the cheapest guy in town, and I only got 3 or four out of 10. That was years ago. I'll spare you all the long story, but once I got my brain washed with people like Frank Blau, Maurice Maio, and professional groups like C-2000 and QSC, and conventions like Comfortech, I still have about the same ratio but the numbers are double, triple, or quadruple, sometimes more.

    I just had to comment because that teaching may dupe a truly talented business owner into keeping his pricing in the dirt.

    I used to be behind in my bills, now I have money in the bank. I used to have problems affording good help, now I have 5 trucks (still puny compared to some of you guys).

    Anyway, nothing disgusts me more than a hard working PHC guy who gets beat up by some demented consumer. Let's not even talk about builders ; a small % are good but most are a joke.

    Gary


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    Gary Wilson
    Wilson Services, Inc
    Northampton, MA
    [email protected]
  • GW
    GW Member Posts: 4,576
    time for new customers

    and time for some training. Call Joe Crisara,. he'll make it all better. You're wondering why people complain about an hourly rate? Get rid of it and go flat rate. I've been there, once you're over the hump it's all good.

    Gary

    To Learn More About This Professional, Click Here to Visit Their Ad in "Find A Professional"
    Gary Wilson
    Wilson Services, Inc
    Northampton, MA
    [email protected]
  • SVDW
    SVDW Member Posts: 80
    Convey the value

    A friend of mine runs a custom & specialty transmission shop. We were discussing this rate issue & we came up with a great answer: "We're not the Walmart of transmission shops." Great lead in to explain the added value of his considerable skills & knowledge. He says it's interesting what kind of reactions he gets, everyone seems to know immediately what he means. I'm not ripping on Walmart or anything but it is interesting...
  • John Barba_2
    John Barba_2 Member Posts: 92
    Read it again...

    I should have included in there something like: "Make sure your prices reflect your cost of doing business, including overhead and your desired profit margin." Sorry, I figured that was implicit.

    We actually teach our contractors how to sell at prices higher than their competitors, and how to hold their prices when customers try to beat them down. Losing jobs and dealing with unreasonable customers is truly frustrating, but it's part of the package, and it's a syndrome that's not unique to the PHC industry. But that in no way means contractors should drop their prices and give away their goods, services and know-how away. Sucessful sales people sell their skills and services at top dollar, and deservedly so. So getting one more job, at top dollar, can make a difference. We've done 5 or 6 sales training classes this year, and would love to do more next year.

    JMB
  • heatboy
    heatboy Member Posts: 1,468
    Why don't you just tell them...............

    what your price per hour is? Do other "professionals" have to justify what they charge when you hire them? Nope, here it is. People may complain about what I need to charge them, but they would still complain if it was 20% less.

    hb

    heatboy



    The Radiant Whisperer





    "The laws of physics will outweigh the laws of ecomomics every time."
  • Supply House Rick
    Supply House Rick Member Posts: 1,404
    NO! Usually Means

    Value wasn't proven in the sales presentation, not that the price was too high...

    Rick
This discussion has been closed.