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Why Being Bold With Your Pricing Wins New Business

Sep 25, 2018 2:01:29 PM

Having reviewed literally hundreds of dealer financial statements, SEN can say with a high degree of certainty that most practitioners are undervaluing their jobs by at least 15%. On a $2,000,000 operation, that's $300,000 being left on the table. Imagine what that kind of extra cash can do to solidify a firm's financial underpinnings or achieve its growth objectives!

Of course, when told that his/her firm needs at least a 15% price increase, the natural owner's reaction is: "Can't be done. We are already the highest price kitchen/bath company in town." But it can be done. We have seen scores of dealers do it once they (a) understand how to properly budget their operations to determine what their firm's price formula must be and (b) discipline their team to follow a specific sales process. A process based upon one simple strategy: the use of boldness in price presentation.

How Consumers React To Boldness

What causes even veteran salespeople to delay giving the price to a prospect? Perhaps, it's the fear of hearing: "Wow, that's a much higher price than we expected!" Or "we need some time to think your price over." Or maybe these salespeople just harbor some timidity because they couldn't afford the project at that selling price themselves.

In The 48 Laws of Power, Robert Greene states: "Everyone admires the bold, no one honors the timid." Research shows that boldness and hesitation evoke very different psychological responses in consumers. For example, hesitation puts hurdles in your path. Indeed, when sales designers need to take time - like a couple of weeks - to come up with a design and a price, they create a gap that allows consumers to think as well. Telegraphing any timidity in the area of price creates the risk of "infecting consumers with awkward energy and doubt."

Conversely, Greene believes "boldness destroys such gaps." The swiftness by which a price is delivered, and the positive energy of that action, leaves your prospects "no space to doubt and worry." So kitchen/bath firms that adopt a speedier, disciplined sales process can fill that gap, gain trust, and secure retainers before their competitors have even developed a plan and proposal. Greene continues: "Audacity separates you from the herd. Boldness gives you presence and makes you seem larger than life."

Bold Act #1: Interactive Design

So how to inject boldness into your sales process? Don't be conventional! Don't waste your client's time - and yours - by taking weeks to come up with a plan. That's how all your competitors work. Be different, do it right there in their home. And do it with them. 

After the first hour of interviewing and observing, it's time to perform ... time to demonstrate your expertise and professionalism. Boldly state: "Wow, you have some great possibilities here!" And then, using your hands and walking around the space, talk through one plausible layout with your prospects ... letting them know the general placement of the refrigerator, sink, and range .... roughly the amount counter space that would available for a good preparation area, etc. Yes, you may sketch the "plan." But, during their initial one hour visit to your showroom, you made it clear that all sketches remain your property until you are retained. Ask them how they feel about this initial "plan." This kind of performance and conversation will have them quickly bonding with you. And gaining you a distinct, unfair advantage over the competition!

Then let your prospects know you are excited about their project! That this just one plausible layout. That once you have accurate measurements, and have committed your team's time to their project, you will develop 2-3 preliminary plans to scale. That their job, with so many great design possibilities, deserves a lot of attention! If they are going live in this house for next 10-15 years, surely they would want the opportunity to weigh the pros and cons of each possible plan before making a final selection.

Bold Act #2: Interactive Budgeting

If this were your own project, no doubt you would like to know up front roughly how much such a "plan" might cost. So boldly invite them to develop a budget with you! You are going to be totally transparent with your prospects about how much this kitchen will probably cost. By having them involved in this interactive budgeting process, they will come to understand where the major costs are and appreciate the final number ... whatever it adds up to be. Your role here is to serve as a facilitator, educator, and consultant. Be objective and thorough. Yes, you need to have a strong grasp of what things cost because you absolutely must develop a realistic budget with them. But as a professional, this should not be an issue.

By taking these two bold actions in your prospect's home - developing a "design" and a "price" - you have delivered exactly what your prospects need to make an intelligent decision. You have done it faster than anyone else. And in an educational, meaningful way ... so they "own' the end number, bonded with you, feel like you are a better value, and can easily shop within your company. If they were conditioned properly about your process during the showroom visit, you will walk away with a signed design agreement and handsome, non-refundable retainer check.

Over 40 years ago, SEN Founder, Ken Peterson CKD, developed and perfected this bold sales process for himself. It doubled his sales volume almost overnight and increased his selling price by over 30%. Fourteen sales designers in his company learned it. Their success was leveraged into 3 additional, profitable Connecticut showrooms. Since 1994, SEN members have mastered, and further perfected, this unique sales approach with equally satisfying results. Today this process is embedded as the centerpiece of the new, industry-specific management software known as NMS. SEN Members are leveraging this exclusive technology to speed up the sale, ordering, and production of their projects with the potential of developing 3-5x more business annually.

Therein is the value proposition of a SEN membership. You will earn more (and learn more) with us than without us. As proof, we invite you to attend our next, industry-specific 4-Day Sales School. You do not have to be a SEN Member to attend. However, there is a good chance you will want your company to join the group after this unique educational experience. Stay tuned for 2019 dates in the coming weeks! 

SEN Design Group

Written by SEN Design Group