Tips and Tricks for Handling Customers Who Want to Negotiate

As a general contractor, you’re expected to wear a lot of hats. Not only are you the man in charge of getting all the work done on a project in a timely manner, you’re often also asked to bid these same jobs ahead of time. Although your typical approach to bidding may be more “take it or leave it,” you might find yourself winning a lot more bids if you’re prepared to do a little haggling.

You absolutely should get every penny your work is worth, but there are a lot of people who still believe that services are an area where they can strike a better deal if they only ask. Understand that it’s not an insult to your quality of work – it’s simply a different approach to business. Learning how to handle a haggler can open up lots of new opportunities for you and your company. Try one or more of these approaches next time a customer wants to negotiate the price of your services:

Don’t Take It Personally

If a customer truly dislikes the work they believe you’ll be doing, they’re not going to haggle with you – they’re simply going to walk away. Understand that some people just like the challenge of saving a few bucks, it’s nothing personal. If you approach hagglers with that knowledge, working with them can be a much easier process.

Arrange an On-Site Meeting

Meeting your potential customer at the job site with a prepared bid gives you both a solid opportunity to see and review the items included in the job scope. This way, you can explain different items on your bid in more detail and even show the customer what needs to be done. Some hagglers don’t have enough experience as homeowners to understand what putting on a new roof or installing new windows entails – they have to be shown, then they’ll understand why you’re pricing the job where you are.

Give Yourself Wiggle Room

Certain areas and cultures are more prone to haggling than others, so if you live in or service one of these, you have to be prepared. Instead of quoting what the job’s worth, add another 20 or so percent on top – depending on what’s considered a deal in your area. This is your pad for hagglers, but don’t let them know. Haggle with them, going back and forth a couple of times until they seem like they’re very happy with the price. As long as the agreed upon price is at least as much as your real price, you’ll come out just fine.

If you accidentally overpriced the job too much for someone who didn’t haggle as aggressively as you anticipated, you can always give them a discount at the end of the project and tell them it’s because your crew completed early or materials cost was lower than you had anticipated. The materials market is always in flux and quotes are best guesses most of the time, so it’s a realistic scenario that will earn you a reputation as an honest tradesman. That can mean return business or referrals – always a good thing.

Be Prepared

When you have a plan in place for what to do when someone wants to haggle, it makes the whole process a lot easier. You should have a pricing structure to accommodate this tactic, as well as a script to help you hold firm once you’ve reached your bottom dollar. Instead of looking nervous and not knowing what to say, your prepared script can get you through to closing the deal. A too low offer might be met with something like, “I really wish I could go lower, but I have to pay my guys and buy the best materials for your project,” or a stern, “My family has been in the construction business for generations, I was raised doing this sort of work. If you want a lower price, I can give you the name of a handyman who will do a passable job.”

Offer to Reduce Scope or Quality

Not everyone is comfortable with adding a pad to a quote just in case of haggling. If you’re one of them, you can approach your hagglers from another direction – by reducing scope or quality. For example, if your potential customer throws a fit about the cost of their new bathroom tile, you can use cheaper ceramic tile instead of stone or lose the mosaic and go for a more straightforward design. Once hagglers understand that you can only work with them so much, they’ll either seal the deal or send you on your way.

Just Say No

In the face of a really persistent haggler, the best thing you can do is walk away. If you’ve built in some pad to haggle with, you’ve shown them areas where they can reduce cost and given them your bottom line speech and they’re still insistent on trying to get a better deal than you can offer, all you can do is walk away. Under no circumstances should you lower your price below what you’re worth, no customer is worth that. Instead, give them the quote and a business card and politely excuse yourself, explaining that if they change their minds, you’d be happy to get started soon. You’ll be shocked how many call you in the days that follow this kind of interchange.

Dealing with a customer who wants to negotiate requires a great deal of business skill and tact. Most don’t mean to be insulting, they simply believe that’s the way the construction industry works. Just in case, make sure you always get a solid contract as well as a deposit from a haggler, this will help to protect you against scope creep that can destroy your profit margin.

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