Source: REPLACEMENT CONTRACTOR Magazine
Publication date: 2008-07-01

By REPLACEMENT CONTRACTOR Staff

Mike Damora is sales manager and co-owner of Morris Window & Siding, in Ledgewood, N.J. During the past year, the company has reevaluated its approach to selling in the home.

REPLACEMENT CONTRACTOR: You've changed your company's pricing structure?

MIKE DAMORA: Yes, about a year ago. We began slowly reducing our opening price. I've always had a problem with the big drop and teaching the big drop, but we justified it by saying that this is what you have to do in a retail business. Well, really you just have to have a better system.

RC: How does your new pricing system work?

MD: We give a discount of 10%, not to exceed $1,000, for buying [on the night of the sales visit]. And everybody pays the same price. We tell the homeowner that up front. And I don't care if it's a $50,000 job or a $500 job.

RC: Did you get pushback from your sales reps?

MD: Our veterans were reluctant because [large price drops] were what they were used to doing. Then when they saw our new system implemented and working and they could see more deals coming in, they liked it.

RC: Why did you decide to move away from price drops as an incentive to buy?

MD: First off, when you go to the supermarket, do you negotiate for a can of peaches? Of course not. And that's the way consumers are used to buying. Another thing is that homeowners are way more savvy than we give them credit for. They're more informed. I could sum it up in one word: Internet.

RC: What do you think are the negative effects of big-drop–type selling?

MD: You could tell that there was a mistrust. Customer says: “I don't like the price.” OK then, I lower it. They're wondering: Where's the bottom?

We'd contact a homeowner a few days later and he would say: “This guy said it was $17,000, and somehow he made it $12,000.” When we go in behind competitors that still do this, we hear comments like that all the time.

RC: Are you closing as much business on the first call?

MD: The bottom line is that 20% of prospects won't buy on the first night. If you tried to tell me that two years ago, I'd have had you executed. But the way we were brought up in this business, we sat there and pounded them anyway. It left them with a bad taste for the company and the salesperson. And they canceled.

RC: How do you manage the situation now?

MD: On my initial visit, I thank the prospect for the opportunity to meet. I tell them that the purpose of my visit is to see if we have the right products for their needs. I let them know I'm going to be asking a lot of questions, and I'm sure they'll have questions for me. Then I go through my demo. Some people want a price that night. If not, I go back to the office, work up a price, and arrange for a second visit.