Mike Andes explains how to handle discount requests using the fast-cheap-quality rule: you can only pick two. Instead of cutting quality, offer to reduce scope for 10% off or delay the work to a slower season at full price.
Today we're going to be talking about what you can do if a customer asks for a discount on an estimate that you sent them for a job. Now, you need to first understand that there are three things that customers always want. They want things fast, they want things cheap.
And they want to have great quality. Okay?
And there's no chance in the world that you're ever gonna ask someone, do you want something slower? And they're like, yes, I would like that shipped to me slower. I would like my project to be far into the future. There's never gonna be a time that they want to pay more money. Like, yes, I just wanna give you more money for the exact same thing. Not gonna happen. And they want a high quality product. Here's the problem. And this is what you can tell people if they ever ask for a discount. Mr. Jones, I was always told my grandfather, my grandfather always told me that you can have things fast, cheap and high quality, but you can't have all three. You can only have two of them. So you can have things very fast, and because of that, you have it cheap. It's like fast food. You can have things very cheap, but they're probably not going to be great quality. If you're being fast, you're cheap. You're probably not going to have great quality. If you're going to be really, really, really fast and have great quality, guess what, it's not going to be cheap. So you can only have two of these at any given point. So this is. Using this logic, though, I can complicate. What if someone really does want something cheaper, like they actually do have a fixed income, they really do have a budget problem. Okay, great. I can accommodate that. I can accommodate. The fact that they want it cheap just means that I'm going to have to give up either being fast or I'm going to have to give up the quality of the job. And so here's what I would say. Mr. Jones, I understand you have a budget concern. There's two things I can do for you. Either A, I can reduce the price by 10% and I am going to reduce the scope of work. I'm not going to never reduce my actual quality, but I will reduce what I get done on the job. So the actual scope of work, like, okay, Instead of doing 40 trees, we'll do 30 trees. Instead of 3 inches of bark mulch, we'll do 2 inches of bark mulch. Instead of doing the front yard and the backyard, we'll just do the front yard. So I am willing to give up scope of work in order to be able to accommodate someone's budget. I'm also willing to give them a cheaper price if they do not do the job fast, which means I'm not going to get the job done next week. I might wait three or four months from now and put that job in my slow season. And yes, I will want my deposit still paid today. And so if someone ever comes that to you and says, I want something cheaper, a lot of us feel inclined to either say yes or no. But this is how you downsell like a pro.
This is how you. When someone asks for something, if you just say yes right away, it's gonna lead to this notion that, oh, I can just bargain with them. I can negotiate with them all the time. You don't want that. You want it to be that when someone says, hey, I want something cheaper, I can do that for you. I can give you that. But then you take something back. For example, I need something cheaper. Great, I'll give you 10% off. But the scope of work is going to be changed or I'm not going to be able to do the job next week. I'll do it in three months. And so whenever someone asks for a price discount, you can accommodate them. Like, I will do your job for 50% off. You're like, oh, that's a great deal. In five years, I'll do the job, and it'll be for way less of the job than you anticipated. So it's all about the terms and conditions. It's like a loan. You want to know about the interest rate and how long do I have to pay this thing off? The terms are important. It's not just the price. Everyone gets hung up on the price. But the terms really do matter. And if you have a customer that really is price sensitive, you can test them by saying, great, I will give you that 10% off. I'll give you that $300. To get inside your budget, we're going to do the job in several more weeks instead of next week. Or we're going to do a little bit less of the scope of work and less of that project to fit inside of your budget parameters. And if they're really not price sensitive, guess what they're going to do. Actually, no, we need the job done next week. I'm not willing to give up the speed. Therefore, let's just move forward with the job. Or, no, I need all the trees done. I want the front and the backyard done. Let's go ahead and just get the job Done. And now you smooth smoke out this idea that they need the job cheaper. And for most people, they don't need it cheaper. They're not on a fixed budget. It's like, look, everyone's on a fixed budget to some extent. I'm on a fixed budget under a billion dollars. Like, we all have a finite number of amount of money. So you can smoke out the. Smoke out the objection of whether it is price by simply conceding that price is something that you are willing to give up traction on. But then I'm going to downsell them into giving up speed or scope of work. I call it quality. But it's also just a matter of like, yes, less quality of a job is doing less on the job. So this is how you're able to get around the price objections. Smoke out people that actually aren't being cheap and actually have the money. But also make sure that when you give them a discount, you do not just concede everything to them because if you do that, they'll keep asking it for every single time. And when they tell their friends or family about you, they'll tell them, you, hey, ask for 20% off. I got it just by asking. Great. I will give you the discount, but I'm going to downsell you using quality and scope of work and the speed at which I do the job to make sure that it's a give and take relationship. And if you're actually price sensitive, you will be willing to wait and you'll be willing to put less on the job.
