According to a report from Richardson, the “2016 Selling Challenges Study”, 48% of salespeople surveyed stated that their biggest closing challenge is competing against a lower-priced provider.
What’s fascinating was that their next closest challenge was “Positioning competing value proposition (differentiating your product/service)” at 14.8%.
By worrying about competing against a lower-cost provider, salespeople are going about it the wrong way when it comes to home improvement deals. Many believe they must provide a quote and hope for the best. And many complain later that they were underbid. Or worse, they cut their own bid down to where the company is not earning much of anything on the project.
The main focus on winning bids needs to be on the value proposition.
If you provide quality remodeling and home improvement services, it is the sales rep’s top priority to show why your business is not only better but the best choice. It’s not effective to simply show prospects your products, tell them you’ve been in business for X number of years, and then give them an estimate.
It is effective, however, to ask plenty of questions, listen to their responses, find out why they have finally decided to purchase, and then prove you are an expert. Let prospects know your company is really their only choice:
- Differentiate how you install
- Show you have a better warranty or money-back guarantee
- Let them see that you use the best products
Whatever it is! Do everything you can to demonstrate to the homeowner that they must hire you. When you sell on value and not on price, a larger majority will hire you without focusing as much on price. Don’t talk about you and your company… talk to the homeowner about how you’re going to make their life better. Show them they’ll save on energy costs, live more comfortably, be the envy of the neighborhood, or have a higher home value.
Don’t be afraid to let prospects know that they might be able to find a competitor who will promise a lower price but that those competitors may use inferior products or have poor installation procedures.
Finally, let silence be your friend. Many sales professionals will talk and talk and eventually throw out a price. Rather than letting the quote settle in, as the homeowners consider it, reps tend to start talking again and suggest discounts to get them to “buy today”.
Instead, train your reps to let the homeowners fill the silence by providing objections that can be overcome or further questions that your salesperson can answer. Your reps will worry less about being undercut by a competitor and they’ll close more deals.