Should You Lower Bids to Win the Deal?

Avoiding Low-ballers on Remodeling JobsYou’ve encountered dozens and dozens (maybe hundreds and hundreds) of homeowners who don’t sign on the dotted line because they object to your price. 

But the question many home pros ask themselves is whether or not you should drop your bid in order to win the sale. 

Many contractors hold fast and refuse to lower their quotes. Some may not have many leads in the pipeline and give out reduced bids to keep their crews busy and cash flowing in. 

What’s the Right Answer? 

Well, first consider this – you’re a bit of a gambler. Running your own business is a risk. How do you know you shouldn’t take the risk, refuse to lower your bid, and wait for the next lead who’s willing to pay full price? 

Next, consider that lowering your price is setting a dangerous precedent. When you immediately lower the bid, you’re telling the homeowner your bid was probably inflated to begin with – even if it wasn’t.  And when you reduce quotes, word easily gets around town to call you but never go with your initial bid. And how much time, effort, and quality work will go into that job if you it’s not going to be a good money-maker for you? That could lead to a bad reputation which could hurt future business. 

And don’t fall for the line that, if you lower your quote, the homeowner will give you more jobs in the future if… you give in “this one time”.  That never, ever happens because they know they can go on to the next contractor and promise the same thing.  If you’re going to fall for that line, have them sign a written contract to hold them to it. 

Here are Tips on How to Deal with Low-Ballers: 

  • Just Don’t Give In. You’ll win fewer jobs but you’ll keep your margins where you want them. Consider investing in a contractor CRM system to help you generate, track, and manage all your leads so that your pipeline is full. And you can afford to say no. 
  • Sweeten the Deal. Give them an added service, upgrade a product, or throw in a smaller, additional job for the same price.  
  • Reduce the Job. Tell them you’ll do the work, but you’ll use lower quality products and materials or you won’t completely finish or do any demo work. 
  • Try to Barter. Many homeowners are specialists at their jobs. Perhaps they could offer their services, if you need them, in order to save you some money. For example, they could do accounting work, website design, SEO, HR work, etc. 
  • Discounts for Early Payment.  Give them a deal if they agree to pay more up-front, pay earlier, or pay with cash. 
  • Get an Endorsement. Offer a reduced bid if they agree to do a quality video or audio testimonial praising your home improvement business. 
  • Get Quality Referrals. Have the homeowner provide 2-4 strong referrals. People who sit with you for a demo or an appointment first. Perhaps even get a signed contract before agreeing to a discounted deal. 

Saying “no” to lowering your bids is the best way to do business. Differentiate your company from the competition – proving to the homeowners why you’re the best, why you’re the top choice – is the perfect way to combat pricing battles. 

If you don’t differentiate, your services become a commodity. And all commodities compete on price. And when you compete on price, everyone in the industry loses. 

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