pricing question

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wqdh403

pricing question

Post by wqdh403 »

I have a question on pricing. I'm in a small town and there are a number of people around here who need repairs, problem is, nobody has much money and I've run into a dozen or so who don't have insurance -- they just have the minimum required liability with no glass coverage. I've found I can't set my prices much higher than $20 or I can't get any cash business. So a customer comes in, we call his insurance company and they tell us they pay $50! They don't even ask us what we charge, they just say what they will pay. When I talked with an accountant, he said we can't legally accept more from the insurance company than what we charge for cash. When I talked with a fleet owner, he said $15 each repair, take it or leave it. My account suggest setting a price at $39.95 and everyone MUST pay the same rate, cash or insurance. So even if the insurance company offers me $60, I only bill them $39.95 which is my price. Is that correct?

I would then leave the $15 and $20 repairs to my competitor who is willing to work for much less. I've also had several customers claim they didn't have insurance then wanted it turned into their insurance after the bill was made out.
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Re: pricing question

Post by Frank EU »

Nonsense. Forget about the so called legal crap, this is a free world and an open market. But your accountant is absolutely right when it comes to the minimum pricing, personally I find $39,95 too low, but that is up to you. Lastly; be it a small town or a or metropolitan area, people will always try to get things and services for free. I just don't care for that sort of customers, let them see another vendor, I'll rather do absolutely NOTHING than a job at a lousy price.
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Re: pricing question

Post by Brent Deines »

Ask your accountant to show you the law he is quoting. Cash discounts are offered all the time in just about every industry. Insurance companies set the price they will pay you, so you would be a fool to charge them less. However, I don't advocate charging less for cash jobs as I think a good windshield repair is worth more than the $50 the insurance company is willing to pay, not less. I'm with Frank, it's all about quality and you just need to convince your customers that your work is worth more than your competitor's work. Yes you will have fleet owners who will give you a take it or leave it price, and what you do at that point is up to you. As for me, I would politely thank him and ask him to keep my card in case something does not work out with his current vendor. I would also keep checking back. Try to build a relationship with him and get him to let you show him you your work is worth more.

Eventually the $15 guy will not show up or you will be able to point out some lousy repairs, and you will have your foot in the door. It won't always happen that way, but in my experience persistence and patience pays off. If you do repairs for $15 someone will come along and do them for $10, so you have to decide what your time is worth and stick to your guns.

I don't mean to pick on any of you who are doing well with low prices as long as you still put quality first. If you can do that and make a decent living more power to you. It's just that it's rarely the technicians who charge such a low price for their work that survive, and I would like to see repair technicians do more than survive, I would like to seem the prosper. That's hard to do at $15 per repair.
Brent Deines
Delta Kits, Inc.
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wqdh403

Re: pricing question

Post by wqdh403 »

Well, the way it's worked here, we started with higher prices and dropped our prices several time because we just weren't able to get any business. We put up a big banner advertising windshield repair. We put several ads in the local weekly newspaper and not a single call. After dropping our cash price to $20 we were finally able to get several people come in, but they still grumbled about the price. Insurance business is almost impossible, I have yet to have an insurance company call me. If I do get someone to call me and then they call their insurance company before I get there, almost always they will call back and cancel because the insurance company is sending somebody else. We have signs on the truck and leave it parked and different places around town, shirts, business cards, etc. We were at the local county fair handing out pens, business cards, etc. I had brochures made up and handed out about 1,000 of those and maybe 3,000 business cards. I had ordered 1,000 pens and almost all of them are gone, but still the phone isn't ringing. So the only thing we could figure was the price was way too high. The only thing that we were finally able to get to work were these discount coupons that bring the price down to $20. The result was I had 6 people come in with these discount cards this past week.

The only real insurance business I've had is from a few friends who demanded their insurance company let me do the repair. I know it doesn't sound like alot, but if I can keep doing a few $20 repairs now and then, I should be able to pay for my kit in 3 to 4 years. Thing is it can look so good on paper even figuring it low. We figured 4 windshields a day for a slow day and figuring it very low $15 profit per windshield, that would = $60 for the day and take that times 5 days a week and you get $300. Now if you do that for 4 weeks, you should get $1,200 for the month. Thing is, where are you going to get 4 windshield per day? That's 20 windshields per week. I maybe get 25 to 30 for the whole year.

The part my accoutant was worried about was having something that made me maybe $300 a year then do something stupid that gets me $5,000 in fines.
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Re: pricing question

Post by Roo »

I would try to find a new accountant. Nearly every business in the world offers volume discounts for large customers which would be the same as a fleet account. You are offering lower prices for more consistent work, that you don't have to hop around town to do mulitiple repairs.

I think you could justify all the pricing in one way or another very easy. Have a mobile price, come to me price, previous customer incentives, neighborhood specials, senior discounts, afternoon specials, weekend specials, etc. (you get the idea) I also agree with Brent our service is worth at least $50 especially if you are performing mobile service. I hate it when I see my competitors offering such low prices and I wonder why they discount the value of their services so low. I think alot of it is just to lure the customer in, then try to sell them on the insurance job to get more money.

My focus is on quality windshield repairs, not on how many customers I can see in an hour. I think most of these guys are just performing twice the work for the same amount of money and probably don't have customers sending them testimonials about how great their service is either.

Set your price, do great work, and it may take more time but you will eventually be known as the go to guy of windshield repair in your area.
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Re: pricing question

Post by Frank EU »

During the last few weeks I have been on the road to be doing sales yet we have to meet a prospect or customer talking about $15 repairs, let alone demanding low price work. It simply is never part of our discussions, but should it happen, man, I'll be ready with my reply, he or she will get an ear full with sales talk.
I know that low price work happens, and we have seen the awful Belle Tire repairs (that is a low-price vendor for windshield 'repairs' here in MI), but any professional fleet- or maintenance manager in the right mind knows that factors like quality, reliability and mobile service simply cannot be done for as low as $15, NOT even when it is just an additional service for a tire vendor -and so do car owners. Nobody has ever made any attempt to get a low price repair. Is it our appearance, the way we communicate, our corporate uniforms, the way our marketing material looks? It probably is a mix of all.

Today was my day off, but I talked to a guy on a Target parking lot doing wsr, it all looked very unprofessional but even that guy did not go as low as $15. His lowest was $20, and in that situation the dollars disappear straight in his own pocket without his employer being informed (...), but their standard rate is $50 and $15 for any additional. That is more like it.

Our work and service not only DESERVES and JUSTIFIES a proper pay, it also NEEDS a proper pay to succeed and survive.
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Re: pricing question

Post by Nomad »

I do a lot of snowbirds in the winter. A lot of people in Utah do repairs for $10.00, or at least advertise that they do. When I get a Utah car I almost always get price objections and mostly don't get the job. It seems many people from BC Canada can be very frugal and object to prices too. Around here there were a lot of people doing repairs for $20, and sometimes even less. Very difficult to compete when you are being under priced like that. I am at $35 now and will keep it that way, I think, at my tent site for next season. I may go up some. Don't really know until I see what competition is like. Sometimes you have to do what you have to do in order to get business.

If in a small town, could you say that you will do one or two for cheap so they will know you do quality work, but the prices are normally $XX? Just to get them started getting repairs from you.

How about advertising that you will do repairs at such and such a place for donations to a local charity? Like at a gas station or grocery store parking lot or something. Then set up a tent site there if they will let you work after that. Could even be for one or two days a week maybe, or whatever.

I tell insurance customers that the insurance companies will ask me (on the phone) if, say, $65 is acceptable. In other words, they tell me what they will pay, and am simply taking what they offer. This is usually enough to get them to understand that it's not me that's demanding more money from insurance companies, it's company policy that I'm accepting.

Offer to do a few free repairs for a fleet to show your quality. At least then you have a better chance.

I grew up in a small town, 800 people. I know how it goes there. Branch out to other towns around maybe, or spend a day or two a week in a nearby city with a tent site to see what happens. Just throwing things out here. Hope this helps.

Get business advice from another source other than the accountant. Roo is correct.
bullseyeben

Re: pricing question

Post by bullseyeben »

wqdh403,

I agree, you need to get more information from somewhere as to the laws regarding pricing. I was a licensed insurance agent in California at one time and can tell you that in every industry cash customers pay less.

I also understand your frustration with the effort you have put into you business and not seeing the results you were hoping for. Read my "venting" post! It is a tough job, to get customers. I know the ads and entreprenaur magazines make it look like, you buy a kit and customers come looking for you. But it takes, a lot of foot work, patience and consistency. I have considered giving up every day for the past 3 months, finally after 7 weeks of dealing with city officials, business owners etc, I opened a tent location at a busy carwash. I had 2 insurance jobs which and two cash jobs at $29.95 (double what the guy on the same street, 2 blocks down charges) and could have had at least 3 more jobs if I had a second bridge (that will be a future order to delta kits). For 6 hrs work I made $195.00 which is not great but better than I had been doing, and better than I would have done had I not done 7 weeks of frustrating work. Along with that I did have 2 people stop for cards, and call me last night to schedule mobile jobs for this next week.

Also, you need to control the conversation between the client and their insurance. I possible do a conference call, I usually just call the insurance while I am working on the vehicle on my cell, and when they want to talk to the client, I hand them the phone. If you know what you are doing the customer will know, if you are able to get the insurance on the phone the customer has confidence in your ability to do other things. It is awesome to hear the client tell the insurance network, "I am already hear, he is ready to go, I want him to do the work."

Also I have never had a customer complain about the insurance pricing. Most people have a distrust for insurance and would ask to you bill them more if you could.

Bullseye Ben in Utah
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Re: pricing question

Post by GLASSTIME »

I am so just Dissapointed!!!!

I do understand that everyones sitations and circumstances are differ than the net one however Business is Business. Yo will have your UPS and DOWNS.
For some reason it always seems to have more DOWNS than UPS.

DONT GIVE IN & DONT GIVE UP!
IT GETS BETTER.

5 years agao when I stepped out and started my business with 2 children at home and at the time a stay at home mom as my wife I had more stress than a weak wall.
Yet I got up every morning at 5:00am and began my day. Every where I went ifit was the barber shop, restarant, gas station, WalMart, it didn't matter someone was going to get it! Over time my sales pitch, confidence grew stronger. I started 1 ad in the local phone book and the rest was straight up FLYERING.
We have always been more expensive than the competitiors and made sure our IMAGE was up to par. Our fleet trucks stayed CLEAN and we made several sacrafices such as NO LONG HAIR, NO FACIAL HAIR. I was determined. Again DETERMINED I was going to make it and make a very good living at my profession.

When you want something bad enough, you will do whatever it takes to ensure a success story!!!!
As far as taking a much lower price..... WHY!

Why would you take a lower price than Insurance? It doesn't make sense. I have this happen to me all the time. My guys will call in and say that the customer wants a discount. First thing first, Put 'em on the phone.
The first thing they say is they can get the same thing down the street. Ok fair enogh, beat this one. If you can deliver to my man there a written estimate from the guy down the street on a company letterhead I will be more than happy to honor a price match ONLY if they are giving you the same thing we are.
I only say this because I know what all of my competitors offer and at what price. The customer usually hesitates and then I will say this. Sir/Mam if you cold get the same thing down the street why didn't you go there?
I finish this if I feel their going to walk with. I tell yo what, If your not completely satisfied with our services Ill refund your money guranteed!

1. Know your competitors
2. Hold your pricing (Yo offer the best service than your competitor, The quality of your repair surpasses them, Will they give your money back if your not satisfied?)
3. Be professional, Not just the look. Your apperance, manners,knowledge,posture, the way you carry out your work, If your mobile keep up yor ride keep it clean & organized!
4. If you have Voicemail(which you should), Flyers, Cards, Brochures, Banners ect. KEEP 'EM SIMPLE, Straight To The POINT!!!
5. Give that customers the VERY BEST repair they have ever seen!

Last I've said it before and Ill say it again,
NEVER Over Promise and Under Deliver, ALWAYS, ALWAYS Under Promise and Over Deliver.
Chad E. Clewis
President
GLASSTIME Windshield Repair & Headlight Restoration


"Its What You Put Into It That Counts"
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maxryde
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Re: pricing question

Post by maxryde »

very nicely put, with the troubled times we face, your advice is right on the money!! Great post chad, Thanks!
Time2Shine wrote:I am so just Dissapointed!!!!

I do understand that everyones sitations and circumstances are differ than the net one however Business is Business. Yo will have your UPS and DOWNS.
For some reason it always seems to have more DOWNS than UPS.

DONT GIVE IN & DONT GIVE UP!
IT GETS BETTER.

5 years agao when I stepped out and started my business with 2 children at home and at the time a stay at home mom as my wife I had more stress than a weak wall.
Yet I got up every morning at 5:00am and began my day. Every where I went ifit was the barber shop, restarant, gas station, WalMart, it didn't matter someone was going to get it! Over time my sales pitch, confidence grew stronger. I started 1 ad in the local phone book and the rest was straight up FLYERING.
We have always been more expensive than the competitiors and made sure our IMAGE was up to par. Our fleet trucks stayed CLEAN and we made several sacrafices such as NO LONG HAIR, NO FACIAL HAIR. I was determined. Again DETERMINED I was going to make it and make a very good living at my profession.

When you want something bad enough, you will do whatever it takes to ensure a success story!!!!
As far as taking a much lower price..... WHY!

Why would you take a lower price than Insurance? It doesn't make sense. I have this happen to me all the time. My guys will call in and say that the customer wants a discount. First thing first, Put 'em on the phone.
The first thing they say is they can get the same thing down the street. Ok fair enogh, beat this one. If you can deliver to my man there a written estimate from the guy down the street on a company letterhead I will be more than happy to honor a price match ONLY if they are giving you the same thing we are.
I only say this because I know what all of my competitors offer and at what price. The customer usually hesitates and then I will say this. Sir/Mam if you cold get the same thing down the street why didn't you go there?
I finish this if I feel their going to walk with. I tell yo what, If your not completely satisfied with our services Ill refund your money guranteed!

1. Know your competitors
2. Hold your pricing (Yo offer the best service than your competitor, The quality of your repair surpasses them, Will they give your money back if your not satisfied?)
3. Be professional, Not just the look. Your apperance, manners,knowledge,posture, the way you carry out your work, If your mobile keep up yor ride keep it clean & organized!
4. If you have Voicemail(which you should), Flyers, Cards, Brochures, Banners ect. KEEP 'EM SIMPLE, Straight To The POINT!!!
5. Give that customers the VERY BEST repair they have ever seen!

Last I've said it before and Ill say it again,
NEVER Over Promise and Under Deliver, ALWAYS, ALWAYS Under Promise and Over Deliver.
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