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A customer calls me to discuss the completely custom piece of furniture that I'm helping them to design. They ask for things that are impossible, I reign them back into reality. I give them a ballpark on pricing, they ask why it is so much, they complain, I suggest cheaper alternatives, they like them, done. It is a process I go thru 30 times a day with people.
So, I give this guy a total price of $38,000 for the offices. I get to the part where I suggest the cheaper alternatives.
Me: ok, so we can change the cabinet doors from glass to wood for a big cost savings, we can drop the length of the desk by 6" or go up by 6" and get to a standard size for a good savings. Also, the wood you chose is a premium with a 30% upcharge. Changing to a standard wood would be the single largest savings.
Customer: Well, the wood is non-negotiable, they need to match the existing stuff. They really wanted the glass doors, so I don’t think I should change that. The desk....I just don’t like the standard sizes so we should do the special length.
Me: Ok, well then that ball park is good. I should have the quote done and returned to you tomorrow.
Customer: But we didn't drop the price.
Me: Well, I offered the three large savings options, and you rejected those changed. The only other changes are trivial
Customer: But they are over budget by 20%.
Me: Well, then you would want to choose one or two of those changes.
Customer: What other things could you change?
Me: If you are over by almost 20%, then nothing. The other changes are trivial and will only amount to a few percent.
Customer: What are they, they might work.
Me: Not really. The changes are things like removing wire pass thru grommets in the desk. You have three at $50 each, so that is $150. Changing from Glass to Wood doors saves $2300. The special desk size is costing you almost $1000. The premium wood charge alone is $11,400.
Customer: So, how many grommets are there that we can remove.
Me: There are 3. So that is $150 in savings out of the $7600 you need to save to get into budget.
Customer: Can we remove more than 3 of those?
Me: No, there are only three. We can not remove more than we have in there. Even if we could that would require us to have 152 grommets in three desks. That would be excessive.
Customer: How old are you?
Me: I don't see how any of this is relevant.
Customer: It is a simple question.
Me: I'm 30.
Customer: See, you are just a young pup. When you have been around the block as many times as I have you will realize that I WILL get these offices for the price I want. I just have to go over your head.
Me: Ok, well, I only quote in list price. List price does not change. If you get an extra discount that is not something I deal with.
Customer: Fine.
So, he hung up.
I get an e-mail 20 minutes later from someone in sales to the guy and copying me saying that they are going to give him 5% off for this project.
I had not written the quote yet.
When I did the quote I knew that whatever price I assign to those special pieces is up to me. I took the price I would normally charge, and added 10%.
So, he ended up paying 105% of what he should have after getting his "extra" 5% discount.
Being able to do that was all the vindication I needed to make my day, but it got better.
I send the quote out to the customer. He sends an e-mail back to me
Customer: Thank you for the quote. Just as an FYI, I was in contact with your sales department and got an extra 5% off, so in the end I got what I wanted. This is what happens when you deal with someone with more experience.
I replied simply "I'm glad I could be of service."
So, I give this guy a total price of $38,000 for the offices. I get to the part where I suggest the cheaper alternatives.
Me: ok, so we can change the cabinet doors from glass to wood for a big cost savings, we can drop the length of the desk by 6" or go up by 6" and get to a standard size for a good savings. Also, the wood you chose is a premium with a 30% upcharge. Changing to a standard wood would be the single largest savings.
Customer: Well, the wood is non-negotiable, they need to match the existing stuff. They really wanted the glass doors, so I don’t think I should change that. The desk....I just don’t like the standard sizes so we should do the special length.
Me: Ok, well then that ball park is good. I should have the quote done and returned to you tomorrow.
Customer: But we didn't drop the price.
Me: Well, I offered the three large savings options, and you rejected those changed. The only other changes are trivial
Customer: But they are over budget by 20%.
Me: Well, then you would want to choose one or two of those changes.
Customer: What other things could you change?
Me: If you are over by almost 20%, then nothing. The other changes are trivial and will only amount to a few percent.
Customer: What are they, they might work.
Me: Not really. The changes are things like removing wire pass thru grommets in the desk. You have three at $50 each, so that is $150. Changing from Glass to Wood doors saves $2300. The special desk size is costing you almost $1000. The premium wood charge alone is $11,400.
Customer: So, how many grommets are there that we can remove.
Me: There are 3. So that is $150 in savings out of the $7600 you need to save to get into budget.
Customer: Can we remove more than 3 of those?
Me: No, there are only three. We can not remove more than we have in there. Even if we could that would require us to have 152 grommets in three desks. That would be excessive.
Customer: How old are you?
Me: I don't see how any of this is relevant.
Customer: It is a simple question.
Me: I'm 30.
Customer: See, you are just a young pup. When you have been around the block as many times as I have you will realize that I WILL get these offices for the price I want. I just have to go over your head.
Me: Ok, well, I only quote in list price. List price does not change. If you get an extra discount that is not something I deal with.
Customer: Fine.
So, he hung up.
I get an e-mail 20 minutes later from someone in sales to the guy and copying me saying that they are going to give him 5% off for this project.
I had not written the quote yet.
When I did the quote I knew that whatever price I assign to those special pieces is up to me. I took the price I would normally charge, and added 10%.
So, he ended up paying 105% of what he should have after getting his "extra" 5% discount.
Being able to do that was all the vindication I needed to make my day, but it got better.
I send the quote out to the customer. He sends an e-mail back to me
Customer: Thank you for the quote. Just as an FYI, I was in contact with your sales department and got an extra 5% off, so in the end I got what I wanted. This is what happens when you deal with someone with more experience.
I replied simply "I'm glad I could be of service."
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