The Price is Right: How To Justify Your Quote and Price Against Competitors
The quote is an essential part of conducting business in the fenestration industry. If a customer requests a quote, this means they are carefully considering your services. However, at this stage, business can be easily won or lost so it’s important to get it right.
It is more than likely that you have come across customers who are unhappy about the quote that they received. Perhaps they have received a cheaper quote from a competitor? Does this mean that you have to reduce your prices in order to win the business? Well, not exactly.
In this article, we take a closer look at how you can justify your quote to your customers whilst pricing against your competitors.
Home improvement quotes
It is never an easy situation when a customer isn’t happy with the quote that they have been given – but all is not lost. It is essential that you are able to justify your quote to your customers. Here is what you should consider when it comes to quoting:
Focus on value, not cost
In many instances, a customer can be fixated more on the price rather than the value behind the cost. Sometimes, customers are unaware of added value that is included in the price like offering excellent customer service or warranty on a product.
By clearly explaining to a customer what they are receiving for their money, it can in most cases eliminate the concern. Showing how your business provides more value than competitors can often be enough to convince a customer to pay that little bit extra.
One way of doing this is by not making your quotes just a price. But add commentary around it. For example, you could show some badges which clearly communicate your warranty/guarantee period, or make clear how your windows or doors come with enhanced features as standard (such as high-security locks).
Similar to offering added value, identifying other concerns or ‘pain-points’ of your customers focuses on factors other than price. By having an awareness of these pain-points you are able to reassure your customers and alleviate their concerns.
For example, a common frustration of customers is when an installer doesn’t show up on time. By guaranteeing that your installers will always be punctual, you are able to ease a customer’s worries.
If you are able to not only identify a customer’s pain-points but solve them also, pricing will become less of an issue.
Having a greater understanding of a customer’s budget and what they are willing to invest will not only save you time but also provide you with the opportunity to rescope your initial quote and come back to the customer with an updated quote for the services that they can afford.
Therefore, try to obtain their budget during the initial sales conversation, that way you have a rough idea of the customers’ expectations.
Price of windows and doors
The fenestration industry is a very competitive market with installers continuously competing for business. In terms of pricing, it is essential that your prices are competitive. Let’s take a look at how you can best price your products and services against your competitors:
Every product or service has a price range, so it is important to understand where your pricing sits in comparison to your competitors.
Customers will use the prices of your competitors as a guide in order to determine whether they are being offered a good deal. Although this doesn’t mean your prices can’t fall outside of the current price range, it is important to consider the consequences of doing so, which may result in a lower lead-to-sale rate.
Know your target market
Understanding your target market is an integral part of pricing your products or service in a competitive market.
By identifying the needs of your customers, you are able to price your products accordingly.
For example, whilst for a group of your target market a higher price tag may be appropriate, the same might not be said for the majority of your customer base. Offering premium and standard versions may be an option. By adopting an audience segmentation approach to pricing, you are able to build loyalty and are susceptible to change as customers’ circumstances and needs change.
As an example, a younger couple who own their own home are not likely to have as much disposable income or savings as those in the older age bracket; therefore, if the you serve a population that is predominantly younger, than it might be wise to adjust your prices accordingly.
Monitor your competitors
Continuously monitoring your prices and those of your competitors is a key component of pricing your products or services effectively. An awareness of your competitors and careful management of your prices are necessary to be competitive in your pricing.
Pricing can often be a sticking point when it comes to attracting new customers but it needn’t be. With a comprehensive pricing strategy and quotation process, pricing no longer needs to be a concern for your business.
For more information on how you can best justify your pricing to your customers or how to price your products or services competitively, get in touch with us and a member of our team will be more than happy to offer advice.
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