Giving More Than One Bid Option

By: Dave Wright, Craftsman Republic®

Card image cap

To a Craftsman, there may only be one price to do a job. He might listen to what a Consumer wants and simply give them a price. He would automatically include what he sees as needed without much discussion.

So, is this a mistake?

Take Time in Selling

When selling Products, it is common practice to give three prices. Statistically, most selling entities will tell you that when you do this you will mostly sell the middle one. A similar principle applies when offering labor. Many Companies offer a basic installation, normal installation, and a deluxe installation option.

The principle still applies, but be careful, too many options just confuse the Buyer. If the decision has too many tiers or levels, it obscures the principal. By this I mean three Products, maybe different accessories, and three labor options. The exception is when there are just color and size options, don’t worry, they will not get in the way.

This good-better-best selling model is easily applied when you are selling the Product or the materials at the same time that you are selling the labor. If you are not on this model, you may risk delaying the sale, or creating a Consumer desire to investigate further to get information on additional Products. Having a good-better-best selling model allows you to compare your Products without introducing others.

OK, so most think I am wrong…

In the past, I was fortunate enough to manage an older and very professional sales force. We structured our plans to ensure that each salesperson had an opportunity to make a certain income, with a reasonable effort.

With this model, learning to upsell by down selling was the fastest way to increase commission income. The salesperson would first present what was thought to be the very best Product and installation, and offer to sell it at a specific price.

The Consumer would always object or question it. The salesperson would then offer a second option, detailing what they would not get with that option. Maybe they would use more electricity or water as with a washing machine, dishwasher or even a toilet, and lose energy savings or other benefits.

As a final option, the salesperson would offer the basic unit with a basic installation. Again, they would point out the benefits lost with this basic option. They might even make sure to note it was what a competitor sells most often and that it was just fine.

You will often see major home improvers list price tiers on pamphlets, with checks on a chart. This is not the same thing. When you write it down and show it, it is personal, use the pamphlet to train your guys.

The Consumer will often ask the salesperson what he would do. This is where it is important to be honest. Even if you would buy the lowest price because you are moving, broke, or cheap, just tell the truth. No matter what the salesperson said, the Consumer picked the best option almost 70 percent of time for ten consecutive years … the very top Product was preferred.

Now while you might be calling this bull, I will tell you that new people were unable to do this without the proper experience. Keep in mind that we practiced this with a very mature sales group, and when dad tells you something, in the old days anyway, we listened.

We once said that every gray hair was worth $1000 in sales in the home each year, and that was, well, a while ago. Anyway, I recommend presenting the three-price option (when practical) and not coloring your gray hair.

Maybe I should get back out there?

When we hired a new Salesperson, with less experience and patience, he would often sell the middle or the lowest option. As his experience increased, so did his closing percentage on the top-of-the-line Product. If you present the best, you may sell the best. It can’t just be done as an afterthought.

An exception to this model are custom manufactured Products, where you have a fixed physical limitation or footprint, and the Consumer directs the choices. For example, a stone countertop is a sale where you step-by-step price the Consumer’s choices. Color, sink, edge, and backsplash options are all decisions leading to the price, and it is what it is. You would not offer more than one finish without looking like you do poor work, and I hope you do not sell inferior grade marble.

About the Scope

When a Consumer Buys It Installed, they have purchased a Scope of Work that describes what is usually needed to install the Product.

Why don’t we include more?

Some Consumers do not need the additional scope, so each time you add to the Scope of Work, you risk losing all or some of those Consumers. The good thing about this is that we have already sold a basic installation that can be performed.

The downside is that some things a Consumer might desire to have done, may not be a part of the sale. An example of this would be to offer a new disposal, or a new air gap, in addition to a dishwasher installation.

When completing Workorders, it is a good policy to offer these choices to give the Consumer the option of improving their property and lessening risks in some cases. Yes, it is a hassle, but you want the best result. You will only do the installation 80 percent of the time or more.

So, is the Craftsman right when he just prices the job as his experience tells him to?

Yes, but at long as he explains why.

During the process, a Craftsman might find out something new and have to sell a more deluxe installation. As a Craftsman, you need to apply what you know to the best of your ability.

The point is that we want to work together to provide the best Consumer experience possible.

Well I could be wrong, (my name is Wright) but I have another experience.