How frustrating is it when you lose a project to price? Now, I have people constantly come to me saying, Brandon, we have illegal, we have unlicensed painters in our area. I’m constantly losing the price and I cannot compete. I just got an email from someone that said, “You were $2,000 higher. You were 20% higher, 40% higher, 100% higher.” Why are you losing the price?[easy_youtube_gallery id=fX3vJOUp0eU cols=1 ar=16_9 thumbnail=0 title=top]
Now as you know, some people are unlicensed, some folks are illegal, but I just did a ton of onboarding calls from new APPC members from the Painting Profit Summit and I found that a lot of them had depressed hourly charge rates or didn’t really understand production rates or weren’t job tracking and their prices were depressed and they didn’t even know it. They are professional. They do a good job. They are licensed, but because their sales process was so fundamentally broken for so long, they kept pushing down their prices because they hated to lose to price. So however you got there, the question becomes what do you do when you get the email from the client that says you lost a price because you are 20%, 30%, $2,000, 100% higher.
I’m going to give you a tip that will help you get the next one. Okay? That will actually help you get the next one, but before I do that, if your sales process is a pet the dog, build some rapport with your sparkling personality, email a PDF estimate and maybe do a little followup, maybe hand a business card and a copy of your insurance, you’re going to lose a lot to the price. The main reason people lose to price at high percentages is because your sales process isn’t persuasive. It doesn’t have pre-positioning, presenting, post positioning and followup tools. You’re not doing things in a scripted, templated way. We would never paint a house a different way every time, but for some reason sales can be done in any flippant way that you want and you expect to get the same results, it won’t happen.
What I’m about to tell you to do is not going to put lipstick on the pig and make it look like a princess. You’re probably losing your projects because you do not have a sales process like the power paint presentation process or whatever may work for you and your business. The first thing that you need to do if you’re losing the price a lot is focus on the persuasiveness of your sales process before you arrive, while you’re on site and after in your followup. Now let’s say that all of that has been done. This is the best thing you can do when you have lost to price because it’s unlikely you are going to redeem that estimate.
Here you go. You need to reply, if it’s in an email or even if it’s over the phone, with something similar to this. Mr. Lewis, I appreciate your honesty about the pricing. It is my job as the owner of ABC Painting to really do a good job communicating how are painters and our processes and our product knowledge is far superior and safer than any of our competitors and apparently have done a poor job of that when I was presenting our services with you. And because our painters depend on me to bring the projects in, would you be honest with me about something else? And just ask them. Usually they’ll say yes, if it’s in a conversation, obviously in an email, it’s a little different. Would you tell me two things that you liked about the other painting company better or two things that they told you that made you select them that had nothing to do with price?
Now that is a very powerful question. Can you tell me two things that the other painting company told you, showed you, something that you liked about them other than price, that made you select them other than us? This is where you get into interesting territory you can actually do something with. They may say they had a more professional presentation. They gave us lots of reviews and references, hundreds of pages of them. They had a great warranty, a fantastic guarantee. They background check their painters. They had more reviews online. I felt better about the company, they gave us a lot of collateral. They stuck with us and followed up and we heard from them pretty routinely. We only heard from me once or twice, so we assumed you didn’t want the job. It took us three months to decide. Whatever the feedback is, you need to then go back to your sales process and ask yourself, how can I use processes, tools, and third-party proof to emphasize the things that our clients are telling us that it’s missing in our sales process?
The truth is, if you can’t compete on price and you can’t, because once you decide you’re going to have a 45 to 50% gross profit business on the production side per project, your price is going to be your price more or less therefore, the only thing you can do is make your sales process more persuasive. You have to invest in building a sales process that will allow you to be the Lexus, the Mercedes, the Cadillac of painting. If you present yourself as the Kia of painting, but you charge the Lexus price and they can’t tell the difference, you’re always going to lose the price. However, you will meet those people where your values do not align with theirs. And what they think is important will not align with what you communicate. And that’s okay.
But when you ask that question, what are two things that the other painting company educated you about, demonstrated, showed you, communicated, that made you choose them that did not have to do with price, that will give you feedback you can actually use.
I’m Brandon Lewis with Painters Academy, Painters Weekly and the Painter’s Purchasing Group saying, you shouldn’t lose the price if you have a persuasive sales process. But when you do, solicit feedback that will help you win the next job. Take care.