[spiderlily]

Friday I had a new situation pop up.

I was out talking to a client about the next phase of a multiphase project. They are happy with the work, as interested as ever about what we are going to do next, and eager to hear ideas and explanantions--a very friendly, relaxed meeting, and after 45 minutes or so, she says: "We're getting other bids on this; it's so expensive."

I just nodded sympathetically and muttered something about "everything being so expensive these days" and moved on.

How do you respond to this sort of thing?

[TrickyDick]

Do you mean they're getting other bids on your design or other ideas and bids from other contractors?

[agla]

The first thing is that it can be an attempt to get you to lower prices by suggesting they are putting it out to bid. It does not necessarilly mean that there are other bidders. So your choice is to react by cutting your price, or not to react by cutting your price. You can't blame anyone for testing you to see if they can pay less just as you might see if you can upsell.

I think you did exactly what you should have done. You did not react beyond acknowledging that things cost money. This person obviously likes working with you and what you have done. She knows your value. If she can afford to keep you on the project, she will. If she can't, it does not become your job to pay for the difference by cutting your price.

As long as you have plenty of work there is no reason to lower your prices to hold customers. Sometimes you outgrow your customers. On the other hand, if you are losing customers at a rate faster than you can replace them, it may mean that you have outgrown your market, or the market has slipped.

The difference is losing individual jobs vs. losing your ability to function as a steady profitable business.

Until you see an overwhelming trend, you should look at it as outgrowing the customer.

[site]

If I were in your situation I would submit a bid that is fair to both you and the customer IN PERSON. I would take a few minutes to discuss the details of the proposal and then say something like- "I really enjoy working with you as a customer. You have been a great customer, and I would like to continue the relationship. I heard you when you said you were getting other bids. I understand things are expensive and you want to get the best price. The bid I handed you today is my best price. If you find others to be cheaper please take a minute to consider that the might not give you the craftsmanship you have come to expect." Once it is all settled keep treating the customer like all your other good customers regardless of who they choose.

[spiderlily]

I really appreciate the thoughtful responses, agla and site.

TrickyDick, I think that they are getting bids on my design, but I didn't ask specifically. They did pay for the initial design.

[jwholden]

As I am reading this thread I am thinking about a scenario in the James Huston book on bidding and estimating. Your customer is checking prices to keep you honest, as long as your numbers aren't too far from the competition don't worry.

You can take back your price without looking like you were gouging them. I agree to stick to your guns and focus on the relationship you have with the client. If you don't have luck chalk it up to client turnover, it is a part of life. I wish I could chalk it up to client turnover as easy as I write about it.

[cutntrim]

Of the least enjoyable aspects of landscaping (for me), two things come to mind right away...levelling base material (have to admit it I suck...take WAY too long) and estimating. I can hire someone with a better eye than me to level screening, but I'll always be the chief estimator.

That being said, when I do an estimate it takes quite a while and I try and make sure that I've done as Site says and try to be fair to my company (I need a profit or the job's not worth doing) and to the customer. I'm sure you do the same.

So I'd concur with sticking to your price and reinforcing the other more important reasons why your customers appreciate your services. But if they value you first and foremost for your design skill and they're thinking another company may be able to install your design for less than that's the way the cookie crumbles. At least you will have gotten the design work, and you may still get referral work from them down the road.

[Nathaniel Carr]

I can't really ad anything to the well considered replies, but I will tell you that this estimating and sales part of the job that we do is with out a doubt the most emotionally draining thing that I have ever been through. (Which is saying that I have had a pretty easy shake in life, actually)
This sales part of the job is where we are either ACCEPTED or REJECTED, I am certain I am not the only one who struggles with that. Some of us are defensive, others defeated, others may have given away margin to buy the acceptance of the homeowner, others of us are actually bellegerant when a proposal is not accepted.

Here is where I stand on the whole thing. We are here to help people achieve their goals. We get paid to do that. If their goals don't match their ability to achieve those goals...well frankly that is not my problem. They have to reconcile that with themselves. If your company has to charge a higher margin to stay alive, and they choose a cheaper company, then they have chosen how to achieve their goals. (and they will get what they pay for)

I once told a price sensitive customer (while trying to justify my price) that I paid my people well enough that they were able to buy their own home. (And now think about how important that roof over your head is to you and how much more secure you are that you are building equity instead of wasting your money on a rent check every month) And this guy basically told me that he didn't care if the craftsmen, my guys who were going to give him his own Eden lived under a bridge, so long as he didn't pay more than he had to . ---we did the project and he screwed me out of 10% of it---
I have learned since then haven't I? Our goals of a self sustaining business are not shared by all of our customers.

I have recently taken to really getting my estimates acurate (after reading the Huston book) and I am finding a lot of price resistance this season. I have to think of it this way... I am in the business of helping people. At a proposal presentation I am presenting the facts. If their expectation is to pay less I try to cut the scope in some way to help the customer achieve their goals. Beyond this what can I do? I can't meet their expectations at the expense of my own.

Wow... What a therapy session that was........