The price objection is the dirty water at the mouth of the river. If you want to clean up the mouth of the river, you have to go upstream to the location of the factory dumping pollutants. You have to deal with the fishing boats that putter little drops of oil and you have to stop people from tossing in small amounts of trash up and down the banks. The price objection is no different and is merely a symptom of a larger disease.
My advice is to prospect your way out of the problem. Prospecting cures all, especially the price objection. If you can’t walk away from a negotiation, you can’t win, and prospecting gives you the alternatives to walk away. Prospecting builds your future by providing abundant opportunities coming down the road to generate optimism and belief in the future. Prospecting also produces valuable market information because of the things you learn while talking to hundreds of prospects.
In my last article for Roofing Contractor I emphasized the value of getting past the plan room to sell more commercial projects. In this issue, I would like to offer insights that enable you to sell effectively to builders, an audience spurned by many contractors who believe, rightly so, that builders do not provide the same margin as homeowners.
A stable network of builders helps you keep your crews busy and stabilizes your business. It also keeps your well-marked trucks on the street, providing advertising and credibility for your business. Most importantly, you will learn that the lower margins from builders actually help you increase your margins with homeowners. The overall result will be a better blended margin for your business and more profits in the long-term.
1. Build a client base of builders and contractors. Very few builders install the roofs on homes, but instead subcontract to roofers like you. Someone is getting their business and making money. Why not you? The builder’s goal is simply to manage costs effectively and create a dependable network of suppliers that get the job done right and on time.
2. Sell on “time.” When negotiating with builders, remember that your price is not merely the cost of installation, but includes the total cost of doing business. Your value is more that the labor and materials you supply. It includes the value of advising your builders on using and promoting the right materials while getting the job done on time. If you stop and consider that a $240,000 house built over 6 weeks will cost the builder over $1,000 per day to produce, you can quickly see the value of getting the job done on time. Sell the total cost of doing business, not merely the price.
3. Prospect to build relationships, not transactions. If you are buying into the idea that you should sell to builders, then start prospecting to build relationships. Don’t force bids on builders who are happy with their current roofing contractor. Instead keep in periodic contact and wait for the right opportunity to emerge. Builders choose a new supplier when something goes wrong with an existing suppler. Accept the position as first runner-up and your future will soon be brighter.
4. Create abundance in your prospecting pipeline to control margins. As you begin prospecting, particularly with builders, you will see that many opportunities emerge. You will feel less susceptible to combative price negotiations.
Many salespeople never experienced even once that pinnacle moment of learning when they overcome the fear of holding a price and get the job anyway. The only way your customers know they have the best possible price is when you tell them. If you take care of the problems further upstream, then you’ll have more confidence to hold your price at the end of the sales journey.