So, should you negotiate?
This comes up A LOT.
In fact, recently, someone asked me what I think of “drop calls,” meaning dropping the price in the home and, then, dropping the price one more time (i.e., having those price tiers).
Now, before I dive into this, I want to share a quick disclaimer.
Disclaimer: It’s not my way or the highway, and I’m not always right. What works for me may not necessarily work for you. So, as I share my own opinion on this, just remember, if what you’re doing is working for you, don’t change it. If it aligns with your values and it’s fine, that’s all good. I’m just sharing my view, and I teach sales in a way that aligns with how I personally like to be treated, how I like to buy, and those sales experiences I enjoy having.
So, back to the drop call issue, what that question is really asking whether to:
- Start at $X, the highest amount
- Drop the price by some percentage, like 10 to 15% (which is pretty significant)
- End at a ~25% discount (rock bottom)
When I’m in that experience as the customer, the first thing I think is, This is a gimmick. You’re just trying to take me for what you can.
I’m going to share a couple of stories with you to explain this in a little more detail.
The Customer Experience with Negotiations & Drop Calls: Story #1
The drop call issue reminds me of the HORRENDOUS experience I had getting a gym membership well over a decade ago.
I sat down, and there’s no price list. Instead, this guy sits across from me, writes a number down on his legal pad, and slides it over the desk towards me. I look at it, and it’s $89 a month. That’s where it started. So, we go back and forth, and:
- He drops the price to $60.
- Then, he drops it again down to $40.
- Finally, with more negotiating and agreeing to prepay for the year, he brings it down to $21 a month.
That’s $21 down from $89 a month. Now, do you think that I walked out of there feeling good?
For a minute, I thought I got a good deal. Then, you know what?
Every time, I went to that gym, I thought, These folks are a bunch of sleazeballs. They were just running a gimmick.
Because they had no displayed pricing, and they were literally trying to take me for what they could, just looking for the easiest sale. And I’ll be the first to tell you this stuff works.
BUT there’s a difference between what works and what feels RIGHT.
And there’s a balance. It’s a delicate balancing act.
The Customer Experience with Negotiations & Drop Calls: Story #2
I want to share one more example to really drive my point home. This is another true story. Last weekend, I was calling different companies to purchase a pager-type system for my grandmother, so she can wear it on her neck and push the button for help if anything happens.
Now, I had NO idea just how aggressive these companies are from a sales organization standpoint.
By the way, this kind of shopping is not fun. It’s usually happening during a delicate time when there are concerns and someone you care about isn’t in a great spot.
And this guy on the phone is HARD selling me and pushing.
My response was, “You know, I have to talk with the family. I have to see if someone’s out there to help set this thing up.” And here’s what happened next:
Him: Yeah, well, if you do this today, you get today’s price and an upgrade for the year.
Me: Hey, can I call you back? What’s a good number to reach you at?
Him: No, I’m on commission, and you won’t get me. So, let’s just close the deal right now, and we’ll do this.
Me: Listen, I HAVE to think about it.
Him: Well, what if I can give you free shipping?
Him: What if I dropped the price even more?
And it just kept going down, down, down, and down. He was relentless.
And after getting 4 calls and 2 voicemails within 10 minutes from that first salesguy, I literally picked up the phone and said, “Matt, take me off your list. I don’t like the way you guys are doing this. Because it’s not right.” And in the end:
- I choose a different company.
- I went with a salesperson who had empathy and focused on answering my questions.
- There was no negotiating. Instead, there was a fixed price.
Now, let’s bring our attention back to roofing sales and whether (or when) there’s a place for negotiating prices with customers.
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Negotiate Prices in Roofing Sales? Pros vs. Cons
Let’s answer the title question now — should you negotiate? — because even though I’m VERY passionate about this negotiation issue, there IS a time and a place where I do think it can be appropriate.
So, I’m going to talk about the pros and cons of negotiating prices in roofing sales.
First, welcome or welcome back. My name is Adam Bensman, The Roof Strategist. Everything I do here is designed to give you and your team the tools and resources I wish I had to fast-track my success when I started out in roofing sales. So, thanks for being here.
And my mission is to help you and your team smash your income goals and give every customer an amazing experience. To do that — create that amazing experience — it has to be a memorable one.
I call that the sales aftertaste.
That’s the experience that the customer has with you, the salesperson, and how they remember that experience. It’s either great or not great, and that affects whether they buy from you or not.
Again, there’s a balance to blend what works in a sales way while also treating people like humans.
So, let’s get to it. Should you negotiate?
There are going to be ‘yes’ and ‘no’ arguments here. And they’re going to be ‘maybe’ arguments too.
Spoiler alert: I fall into the ‘maybe’ category with negotiating. That means I think sometimes or under certain conditions negotiating may be OK (and I’m going to explain what that means shortly).
Why Some Companies Negotiate Price in Roofing Sales
Looking at the arguments for negotiating, one is simply that some companies know that customers don’t always ask to negotiate, so those folks will say ‘yes’ to that higher amount. That means higher ticket prices, more profit, and more commission.
Again, I’m about treating people equally in my company. I don’t negotiate. I have purposely structured our prices to be competitive and at the lowest possible rates we can stand behind while still offering the best value and a transparent experience for all of our new customers.
Now, let’s think about this in terms of cars. If you go in to buy a Mercedes, a BMW, a Ford, a Chevy, or a Dodge, can you negotiate there? Yes!
What about a Toyota Scion? Can you negotiate the price of a Scion? If they haven’t changed their policy, the answer is ‘no.’ That’s because their whole entire brand positioning has been about transparent pricing, not negotiating.
By the way, I work with companies that do both, offering transparent pricing while being open to negotiating prices with customers. So, if you’re one of my companies that’s doing that, cool. That may change or not in the future.
Where Negotiating Can Go Wrong in Roofing Sales
Time to shift perspectives. Now, I work with a top regional roofing company on the retail side, and they do NOT negotiate.
They have one price that they provide in the home. That’s it. Again, this provides transparency because we don’t want that customer to wonder what else we can give them or how much more we can come down in price.
Quick side note here, and this might date me a bit. When I was growing up, there was a popular book called, If You Give a Mouse a Cookie. The whole story is about how if you give the mouse a cookie, he asks for a glass of milk. You give him milk, and he asks for a chair. You give him a chair, and he wants a table. And so on. The whole idea is about take, take, take.
So, the point is that when we start negotiating:
- People see NO end.
- You get taken advantage of.
- They think that you’re trying to take them for too much.
That’s just how it goes. Again, I sell the way that I’ve experienced it and the way that I want to buy.
So, my position is generally NO on negotiation.
How to Negotiate in Roofing Sales: Strategy #1
Let’s get into the maybe or the conditional side of negotiating now. And I’m going share another quick disclaimer first.
Disclaimer: Like I mentioned at the top, if it ain’t broke, don’t fix it. If you disagree with me, I invite a healthy conversation (in the comments on my YouTube page). I learn as we go, and I’ve learned a lot from others. My mission isn’t to say that my strategies are “the end all be all.” That’s not it at all. I’d be a total arrogant moron to tell you I have ALL the answers.
So, my reason for sharing these conflicting viewpoints is to foster a rich discussion, so we can learn from each other. After all, what works for one person may not work for another. Or it may even be required because everyone in your market negotiates. So, you just have to roll with it.
Now, what do I mean by conditions or the conditional side?
I mean there are certain conditions and, specifically, that:
When you give something, the customer also has to give something.
I don’t like negotiations when you’re just giving into a customer because they ask. For instance, they say, “I want a thousand dollars off,” and you just say, “Okay, done.”
No, if you are negotiating, you are going to give something in order to get something else in return. What you get in return can be:
- A commitment by a certain date
- A deposit
- A number of referrals
- Anything that they’re offering in exchange for that price drop that’s also worthwhile for you
I need to share another disclaimer here about hail, wind, and hurricane damage claims.
Disclaimer: State laws say homeowners need to pay their deductibles for hail, wind, and hurricane damage claims. You’re NOR paying their deductible — period. You’re NOT negotiating on deductibles. NO deductible negotiations. If you need help with that, check out my video, How to Beat Deductible Eaters.
Again, this has to be a “you-give-they-give” situation if you’re going to negotiate on price.
How to Negotiate in Roofing Sales: Strategy #2
Next, I want to start negotiating on items that have a high perceived value and a low cost.
What do I mean by this?
Well, some high-perceived-value and low-cost items can be:
- Certain upgrades, like ridge vent, ice and water shield, upgraded shingles, and upgraded colors
- Warranties included at no cost (These tend to be fixed prices for roofing companies.)
So, you can say something like:
Hey, I’ll include this $X,000 warranty at no cost if you decide to move forward today.
Remember, we want to go through these in this order, so that you’re negotiating with:
- An I-give-you-give deal
- Items perceived to be high value by your customer but that are really low cost for you (or your company), instead of giving away hard money
If those don’t provide traction, then move onto the final piece — price. This is my least favorite (for the reasons I explained before).
So, there you have it. That’s what I think about negotiating in roofing sales and how to do it if you need to.
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Thanks for joining me, and I look forward to sharing more with you in the next blog.