It’s disappointing to lose a job. It’s frustrating to lose many in a row.
When asked why people don’t buy a product or service, most will say price. It’s been my experience that price is usually the excuse and people don’t want to tell you the real reason that you lost a job to a competitor.
Recently, a salesperson’s closing ratio for one of my clients was not good. He had lost five jobs to the competition. Price was the reason given. We debated lowering the prices, whether the salesman was good at what he was doing, and much more.
Right before I took my dog for his nightly run, I talked with a potential customer who had an outstanding proposal. He told me that he had gotten three bids and all three were competitive. There were some slight differences in the bids and that he had to compare them before making a choice.
During my run, I realized that price was usually the excuse. I decided that my client had nothing to lose if I called the five people who had chosen other companies. When I got back home I made five phone calls and spoke with two people. I explained that I was an outside consultant working with one of the companies that had given that person a proposal to change their HVAC system or furnace. I knew that he had lost the job and wasn’t calling to change their mind. I was calling to see what we could have done better the next time.
One person said that it was a really hard decision between my client and a competitor. Pricing was about equal. What made the choice for him was the other company had been doing his tuneups for years. My client should have lost this job. The customer just got a bid to ensure his current company was honest. If we had won this job, the other company - which had been taking care of this customer’s system - should have had egg on its face.
The second person I spoke with complemented our salesperson. Pricing again was competitive. The reason we lost the job: the competition threw in a free humidifier to get the deal after all the bids were in.
Previously I had found out that one customer called five companies out of the yellow pages and was taking the lowest bid, no matter what. There was no chance that we were going to get this job. My client is almost never the lowest bid. This was the only case where price was the total issue. This happens about 20 percent of the time.
After learning all this, my client didn’t drastically lower prices. The client learned that at times the company has to be creative to stand out and get a job.
Company owners and managers can and should make these phone calls, too - as long as you weren’t the one giving the proposal. Listen hard to what the people tell you. You will make better decisions about sales, your salespeople and your profits.
Copyright Ruth King. All rights reserved. Write to Ruth King, 1650 Oakbrook Drive, Suite 405, Norcross, GA 30093. Call (877) 520-4321; e-mail firstname.lastname@example.org.