# Overcoming The 'I Got A Lower Bid'



## prowork (Oct 5, 2012)

How do you over come the objection of 'I got a lower bid'? Particularly on smaller projects... On larger projects it is easier to differentiate yourself, and sell your reputation. 

Just moments ago someone told me my $1650 price was too high as they had a bid for $1,100  Likely the $1,100 bid is from a no-name one truck company, where as we are an established 50+ employee operation, but on something this size the customer doesn't care


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## KAP (Feb 19, 2011)

prowork said:


> How do you over come the objection of 'I got a lower bid'? Particularly on smaller projects... On larger projects it is easier to differentiate yourself, and sell your reputation.
> 
> Just moments ago someone told me my $1650 price was too high as they had a bid for $1,100  Likely the $1,100 bid is from a no-name one truck company, where as we are an established 50+ employee operation, but on something this size the customer doesn't care


Without knowing the details of what you are bidding on, if you don't drill down and compare apples to apples on that number they gave you (gotta' be a reason why it's 34% less), there's no way to know if the "price was too high" objection is legitimate or not or if the other company is cutting corners, using lesser materials or is just "buying business"... They could also be blowing smoke up your butt hoping you'll come down in price...

IMHO... you shouldn't either way... with an employee pool of 50+, you gave them the price you need to be in business... any price you give that's below what you've determined you need to stay in business has to be made up somewhere... if you don't have capital reserves or emergency fund (that's been established with PROFIT you pay your company from each job) to off-set your loss, the ONLY other place it can come from is DIRECTLY out of your pocket because EVERYONE ELSE still expects to be paid...

There's way's of dealing with the objection of "you're more expensive", but if you can't get a clear picture of the difference in price, it just sounds like they are not your customer and you're better off focusing your time on finding customers that support your business instead of trying to figure out how to come up with a way to drop your price... 

One of the hardest things in our industry IMHO is coming to the realization that not everyone is our customer... we WANT them to be because we don't like wasting appointment time, but it's just not the case...


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## EricBrancard (Jun 8, 2012)

prowork said:


> How do you over come the objection of 'I got a lower bid'? Particularly on smaller projects... On larger projects it is easier to differentiate yourself, and sell your reputation.
> 
> Just moments ago someone told me my $1650 price was too high as they had a bid for $1,100  Likely the $1,100 bid is from a no-name one truck company, where as we are an established 50+ employee operation, but on something this size the customer doesn't care


Are you assuming a one truck company can't do the quality of work you do with less overhead? I've often found the opposite to be true when a company sells a job and then sends out 4 guys with 6 months of experience to complete a job vs an owner/operator company.


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## prowork (Oct 5, 2012)

You're totally right. It can go either way. I'm asking for sales pointers.



EricBrancard said:


> Are you assuming a one truck company can't do the quality of work you do with less overhead? I've often found the opposite to be true when a company sells a job and then sends out 4 guys with 6 months of experience to complete a job vs an owner/operator company.


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## EricBrancard (Jun 8, 2012)

prowork said:


> You're totally right. It can go either way. I'm asking for sales pointers.


Sell on quality, service and reputation. Use your size as a strength. Sometimes people feel that a big company will be around longer to stand behind the work they do. Reinforce this feeling.


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## prowork (Oct 5, 2012)

So step one would be 'drill down'. 

Then I would add point blank, ask them who the other bidder is, then find out if they are licensed and insured....

To your last point, I came to that realization long ago. But once you get to a certain point in size, and you're no longer buried in operations, you just can't spin people. You have to broaden your target a bit and you have to make a concerted effort to get every sale you can.



KAP said:


> if you don't drill down and compare apples to apples on that number they gave you (gotta' be a reason why it's 34% less), there's no way to know if the "price was too high" objection is legitimate or not or if the other company is cutting corners, using lesser materials or is just "buying business"... They could also be blowing smoke up your butt hoping you'll come down in price...
> .....
> One of the hardest things in our industry IMHO is coming to the realization that not everyone is our customer... we WANT them to be because we don't like wasting appointment time, but it's just not the case...


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## prowork (Oct 5, 2012)

"well I can't speak for how they arrived at their price, but I can say we're not a fly by night company. We've done 1000s of projects just like this. Check our reputation online. Would you like to come down to our facility for a tour?"



EricBrancard said:


> Sell on quality, service and reputation. Use your size as a strength. Sometimes people feel that a big company will be around longer to stand behind the work they do. Reinforce this feeling.


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## 91782 (Sep 6, 2012)

You haven't said what your company has to offer that would justify the higher price.


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## 480sparky (Feb 1, 2009)

I tell people my price is what it takes to stay in business. Many one-man-bands are just looking at getting this week's bills paid and may not be around next week to finish the job.


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## KAP (Feb 19, 2011)

prowork said:


> So step one would be 'drill down'.
> 
> Then I would add point blank, ask them who the other bidder is, then find out if they are licensed and insured....
> 
> To your last point, I came to that realization long ago. But once you get to a certain point in size, and you're no longer buried in operations, you just can't spin people. You have to broaden your target a bit and you have to make a concerted effort to get every sale you can.


I don't think you need to get in the weeds asking who the other bidder is, or commenting on them or their operation...

You're looking for the details of the bid to ensure they are commensurate... Just tick off your strengths in the form of question to reiterate what you're offering (which also draws a contrast with the other company without mentioning them)... The below is a little longer than I usually post in discussing this but it hits on many points you can tailor for your use...


_*"Mrs. Prospect, one of the things I've learned over the years in our business and employing 50+ people is that when I come across a lower bid, there must be a reason for this and in my experience it's usually not to the benefit of the customer. It can usually involve a mixture of lack of proper licensing and/or insurance or lack of experience, inferior materials, giving a low ball number to get in the door and then hit you with change order after changer order, or worse, a verbal quote, etc. I buy things too and try to get the most bang for my buck so I totally get where you are coming from, which is why a red flag right off the bat that tells me we're not talking apples to apples in the pricing as it relates to the other bid you mentioned is how would it be possible to be so much less and still provide the same materials, insurance, protections and warranties? The reason I know this, is that, being a larger established company, in business for many years, we are able to buy things from insurances for your protection to materials to subcontractors at a reduced rate because of our volume all ultimately to the benefit of our customer. 

So that's why it's important when considering how to go forward and make a decision that you are protecting yourself by looking at the quotes from both companies from an apples to apples perspective and going into it with your eyes wide open. But it's not just me as a business owner who wants your business who advises this... if you look into it yourself, consumer experts historically warn people like yourself not to go for the lowest bid for this exact reason because it usually involves the most risk. It's why the complaints on the internet you read are usually some form of the "I wish I listened and didn't go for the lowest price because it ended up costing me much more". The advantage you have with our company is the price we give you is the price you pay all laid out in detail. There are no pricing gimmicks and the only time a change order is involved is if you yourself decide to make a change or something unforeseen presents itself that was not part of the proposal. This protects you, it protects us, and goes a long way towards a successful project with the least amount of stress on you and your family (if it's a referral add...) which is why you find us as a company refereed to you... we came from people you trust who have already experienced what we have to offer and at a fair price with no surprises. So whether or not you choose to ultimately use our company, an even playing field benefits and protects everyone, so I think you'd agree it's important to get it all in writing from both companies and compare apples to apples to ensure not only are you're getting the most bang for your buck but that you're also protecting yourself as much as possible"...*_​_*
*_

Put it in your own words, but what you see is that you aren't bashing the other company (and don't even know their name) but providing things to look at for BOTH your companies in their considering of who to use while peppering it with your strengths and coming across as an expert as opposed to a salesman while at the same time pointing to third-party sourcing (i.e. - consumer experts, internet complaints, referral) to add to your credibility...


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## RangoWA (Jun 25, 2014)

I can only speak from personal experience and that is trying to educated a potential customer is a waste of time. If they are asking questions that's one thing but if they are putting you on the defense and you go for it they are in charge. Smart people know the cheaper price isn't necessarily the better deal and likely some corners are getting cut. 

If they ask me why I'm more expensive I tell them I don't know the quality of work they are talking about. That's as far as I'll take it. The other price may not even be real.


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## avenge (Sep 25, 2008)

So how would you handle a bid for $8440.00 and you got beat by a bid for $3022.00?


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## Warren (Feb 19, 2005)

I just submitted a framing bid for $14500 that was beaten with a bid of $6500.


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## KAP (Feb 19, 2011)

avenge said:


> So how would you handle a bid for $8440.00 and you got beat by a bid for $3022.00?




Warren said:


> I just submitted a framing bid for $14500 that was beaten with a bid of $6500.





KAP said:


> There's way's of dealing with the objection of "you're more expensive", but if you can't get a clear picture of the difference in price, it just sounds like they are not your customer and *you're better off focusing your time on finding customers that support your business* instead of trying to figure out how to come up with a way to drop your price...
> 
> *One of the hardest things in our industry IMHO is coming to the realization that not everyone is our customer... we WANT them to be because we don't like wasting appointment time, but it's just not the case...*


If price is THE buying concern, and that's what they're after, and that doesn't match what your company needs, they're probably not your customer...

If you want to make $75K-$100K a year, and another guy is happy with $50K because it's more than what he was making working for someone else at the industry average of $31.5K, not much you can do about that fact other than spend your time focused on finding customers or developing a referral base that supports your business and desire to earn $75-$100K...

Same goes for uninsured, illegals, fly-by nights, deposit thieves, inexperience, those who think profit is what they pay themselves, etc... or any other variant, all out of our control...


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## Ken Drake (Apr 27, 2016)

*Great advice*

Kap's advice above is spot on. Remember too that it is often better to let these cheap jobs go away. The customer wants a top quality result even if they don't want to pay for it. :no:


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## avenge (Sep 25, 2008)

KAP said:


> ​
> If price is THE buying concern, and that's what they're after, and that doesn't match what your company needs, they're probably not your customer...
> 
> If you want to make $75K-$100K a year, and another guy is happy with $50K because it's more than what he was making working for someone else at the industry average of $31.5K, not much you can do about that fact other than spend your time focused on finding customers or developing a referral base that supports your business and desire to earn $75-$100K...


He told me without asking it was a bid from Mexicans. I told him I will disregard that bid and you can throw it away. He sent me a copy of their bid and they weren't even quoting the correct materials. After a few choice words I simply let it go, not worth my time.


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## MikeFL (Oct 7, 2016)

With that big of a spread they should get at least one more bid. If yours and the next guy's are close, the lowball guy is missing something and that's a big red flag.


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## RangoWA (Jun 25, 2014)

Some people have to learn the hard way. Over and over.


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## RangoWA (Jun 25, 2014)

MikeFL said:


> With that big of a spread they should get at least one more bid. If yours and the next guy's are close, the lowball guy is missing something and that's a big red flag.


Like a license, legal citizenship, insurance, bond, knowledgeable employees .....


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## prowork (Oct 5, 2012)

I agree with you Ken, but just because someone is trying to compare to a lower price are they worth letting walk away? Sure there will always be the cheap f*&^ who just want the lowest price but no one likes to pay more than they have to. Thats where salesmanship (or whatever else you want to call it) comes in to play.


Ken Drake said:


> Kap's advice above is spot on. Remember too that it is often better to let these cheap jobs go away. The customer wants a top quality result even if they don't want to pay for it. :no:


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## WBCarpentry (Jun 19, 2015)

If everything is apples to apples sell them on the turn around time. I'm a one man show. So my job completion time should in theory be slower than a 50+ employee company. You could throw 3 or 4 guys on it and finish in 2 days. It might take me 5 or 6.

Some people care about this...some don't.


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## Metro M & L (Jun 3, 2009)

One other idea is to poison your opponents well.

So I do hardwoods. I take time to educate my clients on what I do, and why. I also explain why I dont use other products.

When they deal with a contractor who ises those other products that competitor has to start by. Overcoming objections I already put in place.

I never attack and I never use names. I just put out information. I even point the good points of the alternate product and let the client choose. By being honest you end up with the right ckient FOR YOU. 

Also, being so forthcoming is pretty irresistable and it closes a lot of sales. At least it does for me.


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## 91782 (Sep 6, 2012)

Metro M & L said:


> One other idea is to poison your opponents well.
> 
> So I do hardwoods. I take time to educate my clients on what I do, and why. I also explain why I dont use other products.
> 
> ...


Pleased you brought that up & the way you described t.

Building in a market where Centex was offering 500 sf more for 50K less means sales has to earn their monies.

And it's the answer to the question I asked the OP early on in the thread, and they chose not to answer:* "You haven't said what your company has to offer that would justify the higher price."*


#1 rule - NEVER badmouth "the other guy(s)"

And from that point on, explain why your materials are better, why they will outlast the warranty, why there are fewer callbacks, why designs are more conservative (placing durability over flashiness, for ex.), why our product ALWAYS HAS A HIGHER RESALE VALUE.

Of course there are market segments and customers where this does not matter - it always has mattered in the segment I choose to be in.

Differentiate yourself - NOT "the other guys".

I grew up in a small town. Early on, you learn that by giving Smith a discount on Monday to get his business, come Tuesday, Jones is going to want the same deal - only better.

Talk bad about ABC, and even if his friends prefer you, they go to church with ABC and will remember what you said and repeat it - often.


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## JBM (Mar 31, 2011)

I got one truck, anyone with 19,999 trucks want to throw down with me on a chimney?


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## 480sparky (Feb 1, 2009)

One thing you will need to ask yourself is, "Is a customer whose only interest is in 'the lowest price' one that I want to work for?"

I have yet to answer 'yes' to that question.


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## Jay hole (Nov 12, 2013)

JBM said:


> I got one truck, anyone with 19,999 trucks want to throw down with me on a chimney?




In theory a company with 19,999 trucks would be better, faster and cheaper than you.


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## Mordekyle (May 20, 2014)

But in practice it's not


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## Jay hole (Nov 12, 2013)

Mordekyle said:


> But in practice it's not
> 
> 
> Sent from my iPhone using Tapatalk




Why not?


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## blacktop (Oct 28, 2012)

JBM said:


> I got one truck, anyone with 19,999 trucks want to throw down with me on a chimney?


If those 19,999 trucks are FORDS . And you drive a Chevy ?

I'm sure you'll be the first one to show up!! :laughing:


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## tgeb (Feb 9, 2006)

blacktop said:


> If those 19,999 trucks are FORDS . And you drive a Chevy ?
> 
> I'm sure you'll be the first one to show up!! :laughing:



Only took 3 pages to turn into a Ford/Chevy thread....:laughing::clap:


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## blacktop (Oct 28, 2012)

tgeb said:


> Only took 3 pages to turn into a Ford/Chevy thread....:laughing::clap:


I couldn't help It! :no:


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## Mordekyle (May 20, 2014)

Jay hole said:


> Why not?




Because there are not enough chimneys that need work in the USA to support 19,999 trucks, so the company with all the trucks can't specialize only in chimneys that need repairs, but have to be more general.

Because they don't specialize, they can't do as good a job or as inexpensive as a job.

Actually, I guess they could: 

They could repair chimneys for free if they wanted. 
They could take twice as long to do as good a job.

However, neither of these would be a good long-term business decision.

So again, in practice, the one man show would in all likelihood do a better job.



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## Jay hole (Nov 12, 2013)

Mordekyle said:


> Because there are not enough chimneys that need work in the USA to support 19,999 trucks, so the company with all the trucks can't specialize only in chimneys that need repairs, but have to be more general.
> 
> Because they don't specialize, they can't do as good a job or as inexpensive as a job.
> 
> ...




But if the company only has 4999 trucks that specialize in masonry, I bet out of 4999 masons at least one is going to be better than one truck guy.


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## blacktop (Oct 28, 2012)

Jay hole said:


> But if the company only has 4999 trucks that specialize in masonry, I bet out of 4999 masons at least one is going to be better than one truck guy.


That's the problem with finding a good drywall finisher.. Out of 4999 you might find one! It's a *****!


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## JBM (Mar 31, 2011)

Jay hole said:


> But if the company only has 4999 trucks that specialize in masonry, I bet out of 4999 masons at least one is going to be better than one truck guy.


Oh so now its one on one, I was willing to do 19,999 against me.


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## JBM (Mar 31, 2011)

Point is the size of your johnson doesnt make you a better lover and neither does the size of your crew make you a better contractor.


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## Jay hole (Nov 12, 2013)

JBM said:


> Oh so now its one on one, I was willing to do 19,999 against me.




I like your style!


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## Jay hole (Nov 12, 2013)

blacktop said:


> That's the problem with finding a good drywall finisher.. Out of 4999 you might find one! It's a *****!




I didn't know there was such thing as a good drywall finisher


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## blacktop (Oct 28, 2012)

Jay hole said:


> I didn't know there was such thing as a good drywall finisher


I didn't say I was a good one! :blink:


I'm just looking for a good one! :laughing:


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## 480sparky (Feb 1, 2009)

tgeb said:


> Only took 3 pages to turn into a Ford/Chevy thread....:laughing::clap:


Coke or Pepsi? :laughing:


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## TNTRenovate (Aug 19, 2010)

prowork said:


> How do you over come the objection of 'I got a lower bid'? Particularly on smaller projects... On larger projects it is easier to differentiate yourself, and sell your reputation.
> 
> Just moments ago someone told me my $1650 price was too high as they had a bid for $1,100  Likely the $1,100 bid is from a no-name one truck company, where as we are an established 50+ employee operation, but on something this size the customer doesn't care


Start with the first phone call. I tell people straight off the bat that I am not the cheapest but am one of the best. 

Second, be as specific as you can when you look at the project pointing our details that other contractors might not point out. Make sure that your bid covers everything you can think of. Make a great impression on them, an impression that will set the bar for any other contractor that bids the project.

Third, forget selling projects based on price. Price your jobs for the clients you want. Forget trying to please though price. You will always loose. About 4 years ago I said screw price based bid winning. I raised my rates and started charging what I wanted to make. 4 years later and I rarely worry about price and I am book into March of 2017 and have at least 6-12 prospects that I am working with. 

Bottom line, if they are price shopping, do your job to separate yourself and if value isn't enough of a justification, move on to the next one. Remember, when you bend over your are the on that is getting...well you get the idea.


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## FrankSmith (Feb 21, 2013)

prowork said:


> How do you over come the objection of 'I got a lower bid'? Particularly on smaller projects... On larger projects it is easier to differentiate yourself, and sell your reputation.
> 
> Just moments ago someone told me my $1650 price was too high as they had a bid for $1,100  Likely the $1,100 bid is from a no-name one truck company, where as we are an established 50+ employee operation, but on something this size the customer doesn't care


I would just say "if you can get the job done well for that price you should"


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## 480sparky (Feb 1, 2009)

FrankSmith said:


> I would just say "if you can get the job done well for that price you should. Just don't call me to bail you out."


Fify. :laughing:


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## KAP (Feb 19, 2011)

FrankSmith said:


> I would just say "if you can get the job done well for that price you should. Just remember to keep my number... can't tell you how many customers over the years I've had to come back to fix their great deal"


FIFY... :laughing:


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## 480sparky (Feb 1, 2009)

KAP said:


> FIFY... :laughing:


Typical scenario:

Your bid: $10,000. The trunk-slammers bid: $6,000. Cheapskate customer hires the trunk-slammer and pre-pays him $4,000.

Fast forward a month or so, when the trunk-slammer bails on the customer, or gets caught without a permit / license or gets called back to work since he was on a lay-off. Naturally, the cheapskate customer is only willing to pay you $2,000 to finish the job.

The job, naturally, is only 10% done.


No thanks. I'm not even interested in looking at the job just to give Mr. Cheapskate a price to properly finish it.


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## KAP (Feb 19, 2011)

480sparky said:


> Typical scenario:
> 
> Your bid: $10,000. The trunk-slammers bid: $6,000. Cheapskate customer hires the trunk-slammer and pre-pays him $4,000.
> 
> ...


Nah, that's when you introduce them to a draw schedule and how it's professionally handled and stay ahead of the draw...

If they balk, make it real...

* "Mrs. Customer, there's NO pro contractor who is going to come back and do 90% of the work for 1/3 of the pay. The guy you find who will is the type who already screwed you. I'd hate to see you go through THAT again, so the only question is are you actually interested in getting this job done? Here's your price and SOW"... *​
Certainly not going to leave after being there without laying all the cards on the table...


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## 480sparky (Feb 1, 2009)

KAP said:


> ...........If they balk, make it real...
> * "Mrs. Customer, there's NO pro contractor who is going to come back and do 90% of the work for 1/3 of the pay. The guy you find who will is the type who already screwed you. I'd hate to see you go through THAT again, so the only question is are you actually interested in getting this job done? Here's your price and SOW"... *​.........


I wouldn't even waste my time with such a note.


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## Irishslave (Jun 20, 2010)

I'll be brief and to the point....I don't know how to do it cheap, I know how to do it right.


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## KAP (Feb 19, 2011)

480sparky said:


> I wouldn't even waste my time with such a note.


Note? I'm talking about while I'm there... 


KAP said:


> *Certainly not going to leave after being there *without laying all the cards on the table...


We close on a rolling average of 33-42% on the first night... try to limit our be-backs to closing those we didn't close the first night...


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## 480sparky (Feb 1, 2009)

KAP said:


> Note? I'm talking about while I'm there... ............


Why are you 'there' after they never hired you in the beginning, but have called you back to try to pull their turd out of the toilet?

If they ain't learned their lesson at the_ College of The Stingiest Person Spends the Most_, your tenure as Professor of Economics ain't gonna help 'em graduate.


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## KAP (Feb 19, 2011)

480sparky said:


> *Why are you 'there' after they never hired you in the beginning, but have called you back to try to pull their turd out of the toilet*?
> 
> If they ain't learned their lesson at the_ College of The Stingiest Person Spends the Most_, your tenure as Professor of Economics ain't gonna help 'em graduate.


Most prospects see an average of 2-3 appointments because they can only stand so many 1-3 hour pitches and their brain turns to mush...

I wish I could say we were always the first called, but sometime we're not and they pull out the guys numbers who was there before... while that's usually a negative, sometimes it's a buying signal that they want you, otherwise, no reason to bring up the other guy EXCEPT to bang you down on price (which if they're not willing to give anything up, is a HUGE mistake)...

Anyway, while I'm THERE, I'm going to make the most of it so if I'm called back it's for one reason... to close...

I venture to say I spend a heck of a lot less time than most who meet with them, gather all the info, take it back, re-invent the wheel everytime in making a proposal, go back to present said proposal (or mail / email it in and hope for the best) and have to go back AGAIN to wrap it up...

To each his own... I don't go fishing to hope to catch a fish...


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## TxElectrician (May 21, 2008)

KAP said:


> To each his own... I don't go fishing to hope to catch a fish...


Great line :thumbup:


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## Inner10 (Mar 12, 2009)

480sparky said:


> Typical scenario:
> 
> Your bid: $10,000. The trunk-slammers bid: $6,000. Cheapskate customer hires the trunk-slammer and pre-pays him $4,000.
> 
> ...


So so so true.


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