By Mark JankowskiTrust but verify, it sounds good in theory, but how can it really be implemented? At SNI, we typically advise our clients not to make adjustments to their prices when a potential buyer claims that one of their competitors is cheaper until they see hard evidence.
I asked my colleague, Jeff Cochran, for his thoughts, and with a chuckle he said he could tell me a story about how he recently implemented it.
I had a project; I needed to get my driveway paved. Being a negotiator, I knew that I needed to do good preparation. The first step in preparing was to collect estimates so that I would have alternatives. Therefore, I contacted three contractors, provided them with the details of the project, and collected estimates. Of course, all three estimates were different. The most and least expensive estimates were significantly different. The first contractor I called was an acquaintance. He gave me an estimate of $8,500 to do the job. The second estimate came from a contractor who I found from an ad in my local paper. His estimate for the project was $7,500. Lastly, there was a sign on the driveway up the road. When I called the number on the sign to inquire about the cost of my project, I got an estimate of only $6,000.
Naturally, I was inclined to choose the least expensive contractor. However, his offer seemed too good to be true. I did some research, and sure enough, I found out that cheaper offers like the one I received for $6,000 raise a major concern that the contractor would skimp on materials. Not using the correct amount of asphalt on the driveway could lead to major problems.