If I Get a "No", Should I Lower My Price?

Should I lower my price?

Is charging less the answer?

I recently got an email from a newer SynkedUP user, and I know that more people have wrestled with this question than just him, so I’m sharing it with you all. 
 
Here’s the email: 
—
Weston,
Hey, I am getting a lot of No’s for hardscape jobs for this spring since we started bidding jobs through SynkedUP. What should I do? Should I go back to $55.00 an Hour and make my markup less? Let me know what you think. Or do we just have a lot of people that are just not bidding correctly as I was before SynkedUP? Give me your personal opinion.
 
Thanks 
 —

Here’s my reply: 

Well… it depends. As long as you aren’t sacrificing your minimum profit goal, then technically yes. 
 

But before you go whacking off your price to win the job, let’s look at a couple of things. 

The best way I can describe it is: your budget dictates your “floor”, meaning you can’t charge less in price than whatever your budget says (without going and cutting expenses out of your budget anyway).
 
The market dictates your “ceiling”. 
Meaning you can always charge more than what your budget shows, as long as you can sell it, great!
 
If you are running into the ceiling, aka, can’t sell, then you can lower your pricing, as long as you don’t go below what your budget requires. Going below what your budget dictates and winning the job, might give you the sugar rush, you get the deposit, but it’ll be a slow painful death as you starve your business, and yourself, of resources.  

 

The issue is usually not the price anyway

Competing on price is a race to go out of business. At Tussey, we regularly sold work when our price was over double what the closest competitor bid. 

Why? 

We were competing on things other than price:

  • Being the easiest to do business with.
  • Responding promptly.
  • Having the most 5-star reviews.
  • Having the most high-quality product.
  • Maintaining the best client experience.
  • Having the most professional crew.

But to sell to those customers, at double the price of our competitors, we had to do a really good job filtering our leads. There are many many people that want what you do but frankly can’t afford it. 

Don’t waste your time

We filtered them out by charging a consultation fee, to make sure they were serious. And we also made them fill out the Project Planner on Tussey’s site, to make sure they understood what things cost. 

Once they did those things, we knew they wanted what we sold, and were able to pay for it. 

$55 an hour is very low for hardscape work. I’m seeing an average of $75-$125. 
 
My advice would be before you immediately assume it’s the price that’s getting you a no. Are you…
 
  • filtering your leads?
  • educating your leads as to what things cost? (Put pricing ranges on your website…)
  • connecting to what the customer REALLY wants on the sales call?
  • going and quoting jobs for people that will never be able to afford what you do?
Although I’m not a big Grant Cardone fan, a good book on this topic is “Sell or be Sold” by Grant Cardone. 
 
Josh, from “Yes Express”, also has an excellent sales training course on this topic.
 
Did any of these things perk your ears up as a potential solution? Or anything that you feel I missed?
 
Comment below and let me know!
 
Weston
Weston-Zimmerman-SynkedUP

Weston Zimmerman
CEO and co-founder

14 Responses

    1. ABL, I love that! Good luck with your SynkedUP implementation brother, let me know if you need anything

      Reply

  2. Come with the mentality of being a buyer’s agent. You’re not selling them something they don’t want, you’re helping them get exactly what they will enjoy. You’ve got to build a relationship, ask a bunch of questions, and passionately want what’s best for the client.

    Help them buy how they buy. It’s a mindset. I know I won’t be hiring our company at full price to build me anything this year. It’s not in our personal budget. But my budget isn’t their budget, my thoughts on debt aren’t their thoughts on debt.

    Sell like you’re independently wealthy. I heard that all the time and didn’t understand it. If you sell like you’re starving, people smell the “blood in the water”, their “shark fin” comes out, and then they’re looking for a deal. Tell yourself, “Jeff says I have to sell to bring in 2800/day before materials” until you believe it. Work to be worth it with communication, quality and processes. I believe you can be worth more than $2800/day.

    Reply

    1. “it’s mindset…” Yep, you’re right. We’re our own worst enemy. Best tool I’ve seen to overcome this battle as a contractor is when you know exactly what your breakeven is on that bid, removes the temptation to self sabotage.

      Reply

  3. This is great advice. I went on a job walk a few days ago. It’s a new build house and it’s very obvious the owner has money. I signed a contract for the landscaping design plan with a budget of 100k. I also bid on a retaining wall that I told her was going to be outside the 100k and she agreed. The wall came out at 47k and she said it was out of her budget. I lowered the price a small amount and she still said it was to much. So I thought that’s fine because I don’t want to do it for any less and the builder needed it done asap which I can’t do it asap anyway. So now I need to draw up some plans for the summer with a 100k budget. I’m not willing to lower my prices anymore just to get work. I would rather have less jobs lined up and make money then lots of jobs lined up and barely scaping by.

    Reply

    1. 💯 Justin. We can’t let ourselves get all emotionally tangled up in *needing* to win that job. Congrats on the way you handled that.

      Reply

  4. I think when proposing a bid, part of what you are selling is yourself. Lawn and landscape can be highly unregulated in many areas. Very few have business licenses. Insurance isn’t a requirement. Explain the process of the scope of work. Explain the systems you have in place to insure consistent performance of your crews. Don’t be afraid to ask about their budget. The response is an easy I dictator of can they really afford it or are they really willing to pay for it.

    Reply

    1. Yep, know your target customer, and kindly bow out when your non target customer requests your services

      Reply