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Continuing his regular column of business advice, Aaron McLeish looks at how offering customers a choice of options on the quote increases your chances of winning the work.
Next time you fancy a sandwich and need to buy a loaf of bread, think about the multitude of options available to you. The shop to buy the loaf from (supermarket, bakery, corner shop), the size of the loaf, the freshness, the ingredients or type of loaf, the shelf life, the brand, the abundance of choice we are blessed with is extensive. The abundance of choice is the same for loads of everyday items and services.
We as a society are used to choice, options, variety, we like to buy based on our current budgets, lifestyle, requirements and perceived value.
You may be pondering why this accountant is talking about lunch.
I want to wake up the plumbing and heating industry when it comes to quoting for works.
The majority of businesses will spend a few hours preparing a quote for a customer, filling it with information on all of the features of the job in hand then supply their potential customer with ONE price. That one price is the businesses price, not the customer’s price. Because of this a lot of potential customers may then go and obtain around two further quotes from competitors for a job before deciding on a particular business to proceed with. A potential customer will do this to get a feel for the price range and works involved.
The buying process is no different when buying a boiler to a loaf of bread. The consumer wants to feel in control of the buying process. The best way to empower your customers and let them feel in control of the buying process is to offer packages or options within a quote.
I have found over the years that presenting a quote with three packages or options boosts a business’s quote conversion rates.
Customers love choices. Hate being sold to but love to buy!
Offer a bronze, silver and gold package for all of the works you do, with differing price ranges for each package.
Offering two packages, is not enough for customers to make an informed decision, offering four or more packages can create confusion or overwhelm and lead to no sale, so the sweet spot is three packages.
To ease you into this concept of offering packages to customers and using a boiler replacement as an example, you could offer:
1. Low end cheap boiler
2. Mid range boiler
3. Premium boiler
4. Standard manufactures warranty
5. Extended manufacturer’s warranty
6. Extended manufacturer’s warranty and additional guarantees and promises (see last month’s article)
1. Light version of aftercare and support
2. Normal/standard aftercare and support
3. Enhanced aftercare and support
If you are attending a breakdown you could offer:
1. A repair
2. A like for like replacement
3. Or an upgrade
Note, most people will go for the middle option because as humans we are risk adverse. Customers don’t want to lose out by going for the basic/bronze package and may not want to overpay for the most expensive option.
But there are loads of people who like the finer things in life and are happy, willing, and proud to purchase the gold packages. Note if a customer is not given an option to buy a gold package, then they simply cannot buy a gold package meaning you are leaving money on the table.
Offering customers, one options gives them two potential buying options: -YES or NO.
Offering customers three options gives then four potential buying options – NO, or YES to option one, two or three.
Clearly communicate what you offer to your customers and state what is included and excluded in each package. Tailor your packages to your individual customers so that your offering meets the needs of that buyer.
I welcome any business-related questions you have, please email firstname.lastname@example.org and your question and answer could be featured in the next article.
Track your quote conversion rate and use the data obtained to analyse your businesses performance. There’s a famous quote by Peter Drucker ‘What gets measured gets managed.’
As the director of Together We Count, Aaron McLeish is an accountant specialising in the plumbing and heating sector. Aaron is also author of The Quote Handbook. Visit the website here: https://www.togetherwecount.co.uk