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How to avoid losing jobs to other tradies underquoting you?

What should you say or do to increase your chances of getting the job, instead of losing to other tradies underquoting you?

Top voted answer
Tim Stokes

Tim Stokes, Managing Director at Profit Transformations

It's a great question and one with a large range of answers, some simple and some deep and complex. 

It's a topic I've assisted many businesses with some I'll share some more simple points. 

First of all customers like the idea of buying on price however they buy on value 9 out of 10 times. We may tell a business we're buying on price but there's always more to our decision than price alone. If 9 out of 10 people purchased on price as their only decision making criteria, then people wouldn't pay more than $5 for shoes, $2,000 for a car (second hand) etc. 

In a business a potential customer will start analysing  a business for its credibility, integrity and trustworthiness within 2 seconds of landing on the business' website.

A website is the starting point for winning sales on anything other than cheapest prices. People are very analytical and start deselecting options of businesses to buy from just from the website alone. And 9 out of 10 websites are not appealing enough to prospects as seen by the average response rate of a website visitor to becoming a lead (phone call or email opt in) of 2% to 5%. That's a 95% failure rate of the website. 

Words have great power and the wording of a website can create an overall impression of being basic and very average with its service, or very professional. 

People usually won't pay more than the cheapest if they feel the website is basic. They associate appearances with competency and quality of service. 

Great wording has a very strong impact on the quality of people contacting a business to buy. This isn't something new, its been proven for decades, long before the internet. 

People pay for benefits. Emotionally beneficial ones. They don't pay much for features or facts. A business may have 10 years experience in the industry. That's not a benefit, its not a feature, its a fact. 

When people make their decisions based on emotion, every time, they are looking for a number of emotions not just one to base their decisions on. Their decision making already began within 2 seconds of seeing the business' marketing (website, social media page/profile etc.)

If a person feels comfortable, reassured, confident in the competence of a business that has been clearly articulated in words and communicated verbally then price alone becomes secondary and they are prepared to pay more.

An example is the old fashioned "Quote". Most are written as itemised costs and total cost. Even the word 'cost' isn't as effective to use as investment or price. 

Instead of a quote, use a Proposal and write benefits of buying from your business first. Every person who buys from a business has a second business as a choice so articulate the benefits of buying from your business in your proposal, first - before any price or costs. 

List your points of difference and what makes your business better or unique. Most well run businesses have good points they can list. 

Selling is a definite skill to learn.  Big improvements in results have been seen from hundreds of people in sales roles (such as admin, PA's, phone answers, retail assistants, estimators, and even bookkeepers) that talk to potential or existing customers as a result of some basic training.  

Selling is not about being pushy or pitching. Its about the art of asking questions to find out exactly what a person's buying criteria is and clarify their key points of interest and what's important to them in their purchase. 

Having seen a business jump by $400,000 in sales income one month after a 1 day sales training this strategy is one of the best if you want to win more sales. 

If your conversion rate from quote to sale isn't 50% with brand new leads then there's a lot of room for improvement.

Hope this was helpful without turning it being a 2,000 answer.