So years ago my beloved dog Sparky got bit on the asslet by another dog. It was a friend’s dog and I kind of saw it coming because the dog wasn’t very friendly. We had them separated but Sparky liked to sniff everything and got a pinch too close.
Their dog snapped, there was a cry, and then it was over.
Sparky was panting so I thought I’d walk her a little. We were at an outdoor patio, at a restaurant, at night, so it was dark. I walked her through the parking lot and when we passed under a light I saw that her asslet was glimmering…
I did my best to get her in the light and realized her asslet wasn’t wet it was bleeding. I put her in the car on a towel I kept in the back. My mother lived right down the street so we went there. My Mom and I got her on the table and realized she was going to need stitches. So off we went to the emergency animal clinic.
If you’ve never had the pleasure of visiting an emergency animal clinic, and at the time I hadn’t, they don’t even talk to you until you’ve handed them $100. (I’m sure it’s more now.)
We gave them money and then sat in the waiting room and waited. We’d been up working since about 6:am and it was heading towards midnight before we finally got into a room to see a Vet.
They inspected her and came back in with an estimate. I knew the drill. It was just like when someone brings in a broken car… I assess the situation and then prepare an estimate.
There are two kinds of customers. The type who ask a few questions and say, “okay”. Then there’s the other type, the one who asks, “What can you do to lower the price?” “Can you work faster?” “Can you use used parts?” “Do I really need a radiator?” “Can you use… glue?”
At 12:30 am I was past my usual polite self when the Vet handed me the estimate. It was $980 to stitch up poor Sparky’s asslet.
I said, “Do you have any used sutures?”
She stared at me, stunned.
I laughed my asslet off.
Then I apologized and okay’d the estimate. I don’t think I made a very good impression even if I was joking.
I looked like a crazy woman.
I once gave an estimate to a customer who honestly said, “Can you work faster?” It was an attempt to save on the labor for repairing his car. Like the Vet, I was a little stunned too, but it was momentary, and then I said, “No.”
The thing is, every time I remember that guy I laugh my asslet off.
Here’s my point… if you don’t want to look foolish, don’t act foolishly.
When a customer decided, this week, to save money by bringing his own parts, he failed to realize that I hadn’t actually separated the parts price from the labor price. His bringing in parts means I make less money on the project. But, since nothing was itemized out, I’ll end up recovering some of that lost profit in the labor.
Why would I do that? Because I’m in business to make money. If I can’t make money on all the parts of my process, I can’t stay in business. Never mind the extensive discounts that were offered on the estimate to help him save money on a car that costs as much as the homes some people live in.
The next time your customer offers to bring in parts, outsource a piece of the work, do some of the work in-house… remember that part of what your profit covers is your time. Your time in researching prices, putting together an estimate, working the numbers, and calling various resources has value.
Great entrepreneurs go above and beyond for their customers most of the time and when a customer tries to save money, I’m here to tell you… you don’t have to give it all back.
Once you’ve put the work in you, deserve to be paid for it. It doesn’t matter if it’s administrative. It doesn’t matter how you earned it. I spent ½ a day researching part numbers and preparing vendor emails to get pricing and availability. Then I had to put my estimate together and prepare a proposal to the customer.
It takes time and effort to do that work. For me, that work is made even more time consuming because the cars we deal with aren’t American… the car I’m dealing with is an Italian sports car. I can’t just call Autozone and get the information I need.
Here a few things to keep in mind when you are presenting price options so that you can be in control of your pricing:
1. Always use a bundled price in your estimates because it gives you more freedom when a customer is trying to save money. You can break things out by sub-project but don’t provide a line-by-line breakout. I will separate things like fix brakes and fix door handle. But I won’t break out individual parts and labor until I provide a final invoice.
2.Don’t use even numbers. If you want to break away from the hours for dollars model, then don’t use an easily divisible rate. Yes, I have a shop rate that I use to estimate automotive work. I have an hourly rate that I use to estimate writing work. BUT it’s my “in-house” number and not a number I give to clients. And that number is a random uneven number. For example, I might use a shop rate of $111.78. When I start calculating my project pricing, say three hours of work, the customer will see $335.34 and won’t be able to easily to figure out how much I charge by the hour. It reduces the ability of the customer to compare you to others.
3. Always show discounts as a separate line item. If I am charging $500 and a $50 discount… I show both those numbers. If the customer doesn’t see the discount, they don’t feel as if they’ve actually gotten a discount. This is a psychological thing. It’s hard to ask for savings when the estimate already shows a discount.
None of these practices are dishonest; their intention is to avoid price confrontation. I am simply making it more difficult for the customer to complain about price or ask for more savings or to even compare my pricing to a competitor’s pricing.
Price shouldn’t be a primary component of your sales process. If you are good at what you do then remove price as a consideration. When the customer chooses you over price, you are less likely to have price conversations in the first place.
Strive to be a differentiator so that you aren’t easily compared to others, that’s how you keep customers from bringing in their own sutures. ☺