Answering Remodelers' Negotiation Questions All Week At LinkedIn
Here's a sample Q&A. Come on over and ask any questions you have as the provider of remodeling or any other type of services. I'll be answering these questions all week.
QUESTION: What do I do when a client insists that I show them the breakdown of my price? I don't do this typically and don't want to start. How do I answer them?
ANSWER: I'd always avoid answering this question (it's not really their business how you price your work) by saying, "I'd love to give you that information (being ingratiating) but I don't price my services that way. I price my services according to their value to my customers."
You know that your customers have done price comparisons, many of them on Angie's List. Tell them you know the market for work of your quality and you charge a market price. If you're on the high side, tell them why you're charging at the top of the market - because of the quality of your work.
The work you do is not simply labor materials. It's the sum total of all your knowledge, all your experience, and everything you do that is uniquely yours. We lawyers call that "intellectual property." There's no way to "break that down."
Compare your services to those of a home builder. He doesn't break down the price because he can't and it's irrelevant to the market value of the home. For all anyone knows, the builder is losing money on the sale. What's important is where the property is and how it compares to the price of similar properties in the same neighborhood. That's its market value - what a willing buyer will pay a willing seller on the open market. You're charging what you believe to be the market value of your work.
Ask your customers why they want a breakdown (they want it to use as ammunition to negotiate with you, but they'll likely stumble on this question because they won't be able to think of any other good reason). Ask them if they're unhappy with your price and if so, why? Then you can work that out without giving them ammunition to get something they believe they're missing. This is the best way to find out what they're really after and satisfy their needs and desires. After all, they'll be posting a review to Yelp or Angie's List and you want them to be happy.