Dealers’ Domain

Question: How do you deal with customers who say your prices on wholegoods are too high?

We ask who they are comparing our dealership with. Upon their an- swer, we ask if the competitor offers the same services that our dealership offers (set-up, full fuel tank, delivery, pre-delivery orientation, parts availability, service availability, etc.). It seems that most of the time this is a “test” by the customer to see if you feel that your prices are too high. This attitude can usually be overcome very quickly if you focus on the product and the dealership rather than on the price. In a competitive environment, the price difference between dealers is not usually much.
— John Boatman, president 
Watkins Tractor & Supply Co. 
Kelso, Wash.

Although I no longer sell wholegoods, I remember advice given during a Snapper sales seminar I attended 20 years ago. “When a customer starts the conversation with ‘How much does it cost? I can get it cheaper across town,’ immediately respond by asking a more important question like, ‘How long does it take to mow your lawn? Would you like to cut your mowing time in half?’”
The customer requests your price because he doesn’t know what else to say. Your job is to sell him on the benefits of purchasing from you: high-quality equipment, excellent service, time saved mowing, long equipment life, low maintenance, loaner machines and guaranteed quick-turn warranty repairs if needed.
Although customers perceive lower prices at the mass merchandising stores, an actual dollar-for-dollar comparison reveals that manufacturers often dictate prices that protect you, the servicing dealer across the street.
Ask the customer the deal-maker question, “Does the price-cutter-store teenage clerk assemble the mower, put oil and gas in it, start it for you, and show you how to operate it safely?”
— Flute Snyder
Hudson Mower Doctor
Hudson, Wis.

We tell them we will be glad to set up and service the discount unit and show them how to use it. Then, we show them the huge file of OTHER BRAND 2007/2008 warranties and a check we got for more of the cost of a few of the units and the very slim file of OUR BRAND warranties that spans 40 years. We say how much we like them and want to see more of them…and we will when they buy the discount brand and save a few bucks. None of this is done in a mean sort of jealous way — just the facts. It’s the old saying “the sweet taste of a low price is overpowered by the sour taste of low quality.”
— Dave Parke, president
J&N Garden Equipment Inc.
Inglewood, Calif.

Just look at the price of gas and your heating bill. This is all I have to say, and they understand what is happening to the price of everything else.
— Art’s Repair Service
North Andover, Mass.

This is where our being a one-brand dealer makes a difference. Scag is at the top of the quality ladder, so most customers have a ballpark price in mind before they walk in the door. They still will want the best price possible, but even that is just a game. When they ask for a price, I ask them if they want the lowest price or if they need to haggle. I explain that I have to make a certain amount to keep the doors open and give them the high level of service they are used to. At that point, most go for the lowest and ask if that is the best I can do. On two-cycle, I don’t discount due to the small profit involved unless they are buying over six pieces at a time. On dethatchers, push blowers and the like, I try to hold the price, again due to the small profit involved. At the end of the year, it is not how much money passed through the business, it’s how much there was to keep that matters. So, selling 40 machines making half the profit is not much better than selling 20 at full profit.
— Matthew Borden, owner
Ed & Matt Equipment
Greenville, R.I.

In our case, we try not to sell the same brands as the chain stores. We try to sell a higher-quality product.
If the question arises, it usually sounds like this (I can buy it at Wal-Mart, Tractor Supply or some other chain store for X dollars).
I explain, “When you buy a product here, you are getting a higher-quality product, with a highly trained parts and service department to service your equipment and address your service needs personally. We service what we sell; you will never wonder where to get parts or service. If you ever need service and we have 40 X brand products in line for service ahead of you, you go to the front of the line because you bought it here.”
— Alan Seamon, owner
Professional Automotive and
Lawnmower Service 
Meadville, Pa.

I smile at them, and ask “Compared to what? We sell only top-quality, nationally recognized brands, backed by knowledgeable info. All equipment is assembled and test-run before delivery, and backed by truly excellent, friendly service after the sale!” If they show me a written price quote on an item we sell, then I’ll match it. If they are a “nickel and dimer,” we just let them walk!
— Dean Davis
Dogwood Inc.
Carbondale, Ill.

I just have to explain to them that the costs of gas and steel and transportation have risen. Most of the customers do realize this; they see this for themselves in their everyday living. This is something we all need to accept a little more. If we don’t accept this and try to sell for less, we will not be in business too long. We have all really good customers that seem to know the cost of living. But you will always have the few who try to bring you down.
— Donna Forlano, owner/secretary
Louis Lawn Mower Inc.
Ardmore, Pa.

If I don’t hear it once a day, chances are I’m not quoting prices! 
It’s time to go to work when I hear it, as the customer doesn’t understand the value of the equipment or us!
In optimism, they may just not be used to the prices as they may not have bought in a while!  
— Art White, VP
White’s Farm Supply Inc.
Waterville, N.Y.

What is our wholegoods price being compared to? If compared to a less substantial wholegood, I then need to make the customer aware of the differences between the two wholegoods and justify the value of my wholegood. If compared to an identical wholegood from a neighboring competitor, I usually explain that we price our products and services so that we can continue to serve our customers’ needs now and in the future.
Another reason for a customer to say our wholegoods prices are too high is that we haven’t done our job in selling the wholegood. We need to provide more information, so the customer can see the real value of our wholegood.
There are also some situations where the customer cannot or will not spend a given amount of money for a wholegood, even though we know a certain model of wholegood is really what he should have. I usually try to direct the customer to the best alternative within his or her budget.
— Gil Bockelman
Gil’s Four Seasons Lawn Equipment
Evansville, Ind.
We stock both high-end and low-end-priced equipment and are at the same price as the big box stores. We show them the differences in the equipment and explain why the prices are different.
— David Vassey
Vassey Lawn & Garden Centers
Cleveland, Tenn.

To deal with pricing, first we have to know if we are priced competitively on the products. We compare our pricing with retailers that offer the same product within an acceptable driving distance from us. (If the products are consistently being sold for under an acceptable GP amount, dump the product, and find something else that will pay the bills; we are retailers, not employees of the OEMs.) Knowing you are competitive locally will help support you with the customer when dealing with the product. If the product is being offered by a local dealer for a very low price, find out if they are closing out the product because of model year or interest. This information will help answer the question why you are higher and help keep your integrity with the customer. (Work with your local competition on this and assist each other in moving close-out products; trust me, you will have your turn to take advantage of the arrangement.) Now, being compared with pricing off the Internet is a different story. Build upon your value with the parts and service departments and your “onsite” final prep of the item prior to “their” purchase of the product. Build on their “priority” for any service for products purchased from you. For the “price-only” customers, use them to dump product you need to get rid of. They are suckers for price, and even though you may not be competitive on the price for the product they are looking at, offer up an item you need to move that is priced for clearance. It is amazing how often they switch. They seem to place more value in price than the product many times. If this does not work, turn and run from those customers, so to speak, because many times the sales made to these price-driven customers are not only the least-margin sales, but will cost you every time they come in after that. Remember, they saw no value in your service, parts or buying local, so whenever they stop in for service or parts, the cycle continues. Track your 60- to 70-percent value-driven customers and match inventory to that group, and do not listen to the OEMs and bring in inventory for the “price-only” group. Their theory of just getting the product into their hands as a pass through and then we make our margin on parts and service is a myth as we all know. Once again, if the customer strangles you on the front end, why would they feed us on the back end? Also, the cost of simply being a pass through for OEMs is too high with interest, insurance and labor, so focus your energy on the “value” customers that deal with you, and, as nicely as possible, refuse to play the price game with the price-only customers. You want them to leave thinking you are a nice person, but just won’t deal on the price.
— John Napoli
Northern Kawasaki
Cloquet, Minn.

Every dealer should know in advance how to answer the question: “Why should I buy at your store?” If your answer is because I am the cheapest, then you will struggle with dealing with people who question your price. The dealers who can provide their customers with answers that give more value when buying from your store such as special service policies (or simply service for that matter), return privileges, pickup service will find it much easier to deal with the pricing issue. Dealers create their own problems in a lot of cases because they feel they MUST lower their price when asked. Do you dicker on the price of a Big Mac? Set a fair price and be prepared to justify it, and you should find it much easier.
— Ralph Helm III
Ralph Helm Inc.
Elgin, Ill.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *