Here’s how to elegantly deal with “Low-Baller” competition…
By Brett Lloyd Abbott, MYM Austin Inc.
I’ve never been a fan of offering big discounts to win a sale. I’m not opposed to an occasional “incentive” (such as a free automatic cleaner, fire pit, or outdoor kitchen) to sweeten the pot, but if you’re not already “the cheapest guy in town,” then you shouldn’t suddenly pretend to be, or try to be.
If your product is worth more, you should charge more. Just like Mercedes, Rolex and Tiffany’s. In fact, let’s look at what these three examples all have in common:
- They don’t apologize for their price, even though the Rolex may cost 500 times more than an equally-accurate Casio watch.
- They don’t offer discounts to try to win the sale.
- The salespeople don’t go crying to their sales manager, saying “All these people care about is price!”
These sales reps are rightfully proud of their product and price, just like your salespeople should be rightfully proud of your product and your price.
As a general rule, if your salespeople are getting beat on price, they need more sales training.
Whether someone has been in sales for 4 weeks, 4 months, 4 years, or 40 years, all salespeople can improve with a little sales training. But for the sake of this newsletter, let me share a strategy your salespeople can use the next time they get pushed by a homeowner for a lower price.
Let’s keep in mind that the pool building industry is somewhat unique, in that for the average homeowner, it’s very difficult for them to discern the difference between your product and a low-balling competitor. And worse, these homeowners have no idea how “buying from the cheapest guy in town” is seriously flirting with disaster.
So it’s up to your salespeople to enlighten those prospects before they make a tragic mistake. The homeowner needs to understand what they are sacrificing when they choose to buy a product that is worth less than yours. So here’s the strategy…
FIRST, your salesperson should “remove themselves” from the sales process.
And I mean literally, they should tell the homeowner:
“Well, Mrs. Smith- That sure sounds like a heckuva deal. Maybe too good to pass up. See, at <my pool company>, we would never build a pool like that, for a variety of reasons. That’s just not the way we do business. So let’s just take my company out of the running for a minute, shall we? Let’s presume that you’re going to go ahead with the lower cost option, okay? That way, I can offer you some suggestions, and you won’t have to worry about me trying to sell you something. Does that sound reasonable?”
By officially announcing that you are no longer going to compete for this business, she can potentially view you as a “trusted advisor” instead of a “biased salesperson.”
“Great. Now Mrs. Smith, I think it may be possible to get a pool in that price range, but you’ll have to be very careful. You see, sometimes, everything goes right, but sometimes things go very wrong. It’s kind of a gamble. So here are some suggestions I can offer you, to maybe improve the chances that this works out well for you.”
This next line may or may not be appropriate, depending on who the low-baller is. Your salesperson should adjust as appropriate.
“You see, it’s sort of a “dirty little secret” in this industry, that while there are a lot of great pool builders in town, there is always a handful of pool builders who get themselves in trouble – usually financial trouble – and they’re forced to close their doors. It happens every year, and it’s almost always because they’ve run into cash flow problems, and they couldn’t pay their subcontractors to finish the job.”
“So obviously, we don’t want that to happen to you. Because if the builder runs out of cash and goes out of business before he finishes your pool, you’ll be stuck with a big empty hole in the ground. And you’ll have to pay MORE money to hire another pool builder to come in and finish it.
“Now if you’re lucky, the builder will finish your pool before they go out of business. Then you just have to hope you don’t have any problems with the pool, because obviously there will be no warranty on anything.
“So here’s what you should do. First, before you sign the contract, ask for an adjustment to the draw schedule. Make sure that when the gunite is completed, the builder has less than 50% of your money. And make sure that the final 20% or so is held until the pool is 100% complete.”
Yes, I’m saying that your salespeople should help these people buy from your competition. Because…
If they’re only going to buy on price,
you’ve already lost the deal anyway.
But on the other hand, if “risk” and “quality” and “trust” and “peace of mind” are important to this homeowner, then you’ve still got a shot. And now you’ve positioned yourself perfectly for it.
Now throughout the conversation, you should try to work in some other helpful bits of advice, such as:
“Be sure to visit their facility before you sign a contract. That will give you some hint of whether they’re doing OK, or actually struggling to make ends meet. For best results, you should visit them unannounced.”
“You should definitely check out their reviews online, and look them up on BBB and Dun & Bradstreet. That won’t tell you everything, but it will give you a hint if there’s a history of trouble.”
“And probably the smartest thing you can do is find out who their primary contractors are for steel, gunite, plaster, etc. Give their subcontractors a call, and find out which builders THEY recommend. If the pool builder is slow paying his subcontractors, they’ll tell you. And you’ll know that trouble is brewing, and you’ll want to steer clear.”
“One other thing you have to watch out for is them leaving things out of the contract, or using sub-standard methods or materials. What looks like a good deal might actually be a ‘bait & switch’ trick.”
“In fact, since we’ve already agreed that <my pool company> is no longer in the running, I’ll be happy to take a look at their proposal, and let you know if anything’s missing, and whether or not it looks like a good deal.”
This is probably the single most valuable service you can provide to them. And besides, look at the credibility you’ve gained. (We’re still trying to win them back, you know.)
Now let’s close this rather unusual conversation on a positive note.
“Once again, Mrs. Smith, I really appreciate the opportunity to talk with you about your project. Now if for some reason things change, and you decide you want to have another conversation about <my pool company>, I’ll be happy to meet with you and discuss some alternatives…. Meanwhile, feel free to call me if you have questions with the other guy’s proposal. I wish you the best of luck.”
As you can see, I’m a firm believer in “taking the high road” when it comes to dealing with your worthless, no-good, low-balling jerk competition. And I hope you sell as many pools as you can possible stand.