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Beware of the Sales-Pitch Price

Posted By MIke Downing, Friday, May 4, 2018
 

Call me a skeptic if you will, but haven’t we all been drawn into the Sales-Pitch-Price at some time in our life? Now please don’t take this the wrong way, as this is not intended to be a knock against sales people.  In fact, some very good cost estimators are also very good sales people to their credit. I truly appreciate a good sales person, who knows his products well and can inform me about his product’s features, benefits and is honest about the product limits and appropriate applications to help me make the best selections.  However, we all know “dollars talk”, in the sense that the best price is the most attractive, when everything else is equal.  For me, there’s nothing better than a firm written quote, complete with all of the terms, conditions, inclusions and exclusions laid out in a clear and concise manner, leaving little to the imagination, and of course my favorite expression “all per plans and specs”. It’s a firm bid that I can hang my hat on, rely on to assemble my bid and take to the bank. If a sales person doesn’t know the cost, then it would be better for them to honestly admit it, as many do, or get back to me in a reasonable timeframe, with reliable cost information.

 

Which brings me to what I like to call the “Sales-Pitch Price”. This is the rosy fictitious price, spouted by a sales person, with the full intent of trying to sell you something, which cannot be honored in the final sale, which is given either with the dishonest intent to lure you into his sales-pitch by portraying his product as less expensive (i.e., more desirable) than it really will be or possibly out of ignorance, as to what his product actually costs, or he’s quoting outdated costs, without adding recent cost increases. This is commonly seen with a material product sales representative wanting to get their product single-sourced specified, but where the actual pricing is provided by the local supplier or contractors, rather than directly from him. Also, the “Sales-Pitch Price” may even be appropriate for the base raw cost, but may be missing important additional costs required for a complete installation, such as costly unique jobsite conditions, shipping and handling, tax, fasteners, adhesives, surface preparation, jobsite protection, and other necessary miscellaneous accessories or related items necessary for a complete installation. As cost estimators, it’s a risky way of conducting business; and we can get ourselves in a lot of trouble.  If we base our cost estimates on the “Sales-Pitch Price”, without adding enough contingency cost to cover the difference between the “Sales-Pitch Price” and what the real purchase cost will need to be, there’s always risk in knowing how much that additional contingency cost needs to be.

 

Bottom line: I prefer dealing with people I know, who have a proven record of honoring the quoted price who also provide good service to boot.  We all can make money running our businesses that way and that’s how we build long lasting business relationships.

 

Please share your story or experience, where you’ve encountered the “Sales-Pitch Price”, and let us know how it impacted your business or how you handled it.

 

Submitted by:

Mike Downing, CPE

Certification Committee Member

Tags:  certification 

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