Phony phone prices
As I was contemplating the subject of this month’s article, the phone rang. I answered and on the other end of the phone was a very pleasant young lady who asked if she could get a price for replacing a faucet. Since we do not quote prices over the phone, I informed her I could send a technician to her and he would give her an exact price for any task. She quickly replied, “No thank you. I’ll call somebody else.”
This encounter made me wonder about the reason for her call, since no other conversation ensued before she hung up. She could have been considering changing her faucet out of need or for aesthetics. Wanting to know the price before deciding to purchase is always wise.
Wisdom is something all consumers as well as contractors should employ. That’s the reason we do not give sight unseen prices over the phone. Quoting prices over the phone without seeing the circumstances involved to perform the task is detrimental to any PHC contracting business. And that which is harmful to business is definitely damaging to a business’ bottom line. In other words, the practice makes it difficult to succeed in business.
If I were to answer her question with an amount, I could possibly place our business at the precipice of the proverbial slippery slope. You might think, “But, it’s just a faucet replacement. Why not give her a price over the phone?”
The answer is simple. We don’t take on jobs just to get work at any cost. We perform tasks for consumers because that is the service we offer. And, we price tasks with the intention of recovering our cost to perform those tasks and to give our business the opportunity to earn a profit above that cost. To accomplish this properly, we must know the circumstances involved with each task. To do otherwise is foolish.
Different faucets and the condition of the plumbing fixtures and piping to which you must connect the faucet will affect your cost to perform the task. In turn, as your cost fluctuates, so should your selling price. This is true for all services.
The faucet could be a standard deck mount faucet. It could be a spread faucet that has a higher labor and material cost. It could be a back mount faucet that would also entail higher costs. The faucet itself could be anything from an inexpensive faucet to a high end (and higher cost) faucet. The sink and/or adjacent piping could be old and in a deteriorated state.
Giving her a price over the phone without taking these issues into consideration could make the actual price higher than a sight unseen phone-quoted price. If this were to occur once the actual task was seen, the consumer would probably argue that the person from our business who gave her the price over the phone quoted a lower price. And, that is when the excrement begins to contact the rotary oscillator. The integrity of our business would be in grave jeopardy. The journey down the slippery slope would begin.
I did not get the chance to tell her there is a minimum service call charge to send a technician to her. So, as far as she knew it was a free estimate. But, as you should know no estimate is truly free. Either the consumer or the contractor must pay for the costs associated with visiting the consumer’s home or business. And, wise consumers who make appointments to have a technician come to their homes or businesses would ask if there is a charge to send someone because their sagacity would give them the insight to do so.
If she assumed the visit was a free estimate, she might not have been so abrupt in her decision to hang up and call someone else. That means she either assumed there was a charge or she really did not want the service in the first place.
You might wonder what I mean by saying she did not want the service in the first place. People call PHC contractors for phone prices often. That doesn’t mean they want to have a service performed. It does mean they want information.
Let’s look at the reasons people want the information. As I have previously stated, she may have truly wanted the service. In this instance, quoting a price over the phone places you in the competitive position of quoting low selling prices, which are probably below the cost you could incur for the service.
However, she could have had the job already done by another plumber and just wanted to check his/her price after the fact. In which case, you might be denigrating a competitor without the knowledge of the circumstances he/she encountered regarding the task. That’s just not right. You wouldn’t want the competitor doing that to you.
On the other hand, she could have been employed by another contractor and wanted to check your price. Just think about it. If you quote a low (below true cost) price just to get your foot in the door, and you quote that price to a competitor, that competitor will probably use your price to come up with his/her price. And, the seemingly never ending cycle of phony phone prices and problems over pricing continues.
Those contractors who practice giving prices over the phone don’t take those factors into consideration. In hopes of getting a job, they never consider the fact that they are placing themselves in a price war with other contractors to get a job at any price even if it is below their true cost. This fact blended with a lack of knowledge regarding their true cost assists them in their folly of quoting phony phone prices which are too low to recover their true cost and make a profit.
Then there are the knuckleheads who purposely quote low prices to get their foot in the door. Then, once there, they utilize fraudulent bait and switch tactics to upsell the consumer to tasks with much higher prices.
If you are giving phone prices, I suggest you heed the words of an old song, “Fools rush in where wise men never go.”
I applaud you if you are a contractor who:
- Knows what you are doing
- Delivers excellence to consumers
- Knows your true costs
- Prices your jobs so you recover your cost and have an opportunity to make a profit
- Has integrity
- Respects yourself
- Has the courage to refrain from giving phone prices, since you can’t see all the circumstances
To earn the respect and future business of consumers you must be intelligent, properly trained in your field and honest. To make a profit above your cost, you must know your true cost and sell your services above that cost.
If you would like to discuss this matter or seek my assistance in becoming wise while giving yourself an opportunity to succeed, give me a call. l
Richard P. DiToma has been involved in the PHC industry since 1970. He is a contracting business coach/consultant and an active PHC contractor. For information about the CONTRACTOR PROFIT ADVANTAGE or to contact Richard: call 845-639-5050; e-mail firstname.lastname@example.org; mail to R & G Profit-Ability, Inc. P.O. Box 282, West Nyack, New York 10994.