Tips Provided To Help ‘Justify’ Project Prices

by WOHe

Tips Provided To Help ‘Justify’ Project

How often have you heard a client say, “I like the design, but
the price is too high.”? Next time you do, try this: Ask in a calm,
serious manner, without sounding defensive or combative, “Our price
is too high compared to what?”

Virtually everyone you’ll encounter as a prospect does something
for a living they’re proud of. They consider what they do to be of
high quality and price their own products and services

If your prospect owns a restaurant, point to the most expensive
item on the menu, and say, “For the price you charge for this, I’m
sure you use the finest ingredients and the highest culinary skill.
Well, this room design uses the finest products and was designed
with high degree of professional skill.”

What this can help your prospect do is put your price into a
frame of reference he can understand. When buying a kitchen,
bathroom, home office or other-room design from you, the client has
little to go on. He can go to home centers and appliance stores or
look in magazines and newspapers to get some idea of what the
products themselves cost, but even then he may be comparing apples
with oranges.

What’s invisible in your price is your time and skill and asking
this question can help put this in perspective. A lawyer knows how
much time is required to prepare for a court case, just as an
accountant knows how much time and training he puts in above and
beyond the few hours he invests in filing a tax return. These
professionals charge accordingly for their projects, and reminding
them of their own business practices can help them understand how
you charge for yours.

Another advantage of this tactic is that it can make you
understand what some of the underlying assumptions are that your
client is making. For example, your client may have visited an
appliance store and seen the prices for low-end ranges, and may
assume the commercial-look, high-end range he specs is priced
similarly. He may be comparing someone else’s semi-custom or
high-end stock cabinets with your custom cabinetry line. He may be
comparing granite-look laminate with granite-look solid surfacing,
or with granite.

You may also find some interesting gaps in the way other
retailers are pricing their jobs that can give you a competitive
advantage when you sell. For example, does the price your client is
comparing yours to include permits and inspection fees?

Does it include applicable state and local taxes? Some retailers
hide these “extras” from their estimates and hit the customer with
them at the end, when the job has been signed.

Finally, be sure you and your clients are comparing apples with
apples. Some years ago, a retailer in the Northeast built
short-term volume rapidly with low-ball quotes. His competitors
discovered, however, that his tactics to beat everyone’s prices
were dishonest his room drawings often showed items like moldings,
soffits and even refrigerator cabinets that were not included in
the price quoted, nor in the contract. Needless to say, any
competitor that tried to match the room shown in the perspective at
the same price would have been at a severe disadvantage.

Related Posts

Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More