‘Saving’
Response to The Simplest Way to Save Money
Back in January, I posted an entry, The Simplest Way to Save Money: Ask. In it, I told the story of how my wife and I saved $350 on a new water heater we had installed simply by questioning the quoted price. I also gave other examples of how to save money just by questioning every company you do business with and asking for price breaks and special deals.
Recently, I received the following comment regarding this article:
“Although I appreciate and agree with the point of your post I would add that you should comparison shop also. What appears in the accompanying picture is your garden variety water heater. Walk into any Sears and you will find the top rated (both efficiency and heating) 55gal water heater for around $350 with an install cost of $450 for a total of $800. Somehow I think your plumber saw an opportunity and took it.”
RJT
It just so happens that a Consumer Report site for blogs had linked to this entry and posted an excerpt as well as a picture of a typical water heater in an unfinished basement. Unfortunately, this picture is not mine and does not do justice to my situation.
So I can see why the commenter made that suggestion.
However, this got me thinking, and I’d like to point out some very important things that far too many salespeople seem to forget on a regular basis:
- Not every customer wants the exact same thing. Remember, customers buy for their reasons, not the salesperson’s. Find out what those reasons are first, DON’T ASSUME.
- Before you make assumptions about what a customer has, get all the facts first. It’s very possible a customer might be paying more because they’re getting a lot more.
Let me explain.
I love getting a deal as much as the next person, but I also love speed, ease and convenience as much, if not more. The last thing I feel like doing when it comes to saving just a few hundred dollars is comparison shopping. My time is extremely valuable.
Just one trip to Sears would kill at least two hours, not to mention the fact that Sears is not exactly at the top of my list when it comes to service and quality salespeople. To go to two or three other places would kill an entire day, minimum. If I kill a day shopping for a water heater, I’ve lost money, no matter how much I’ve saved.
Now once I’ve found the water heater, I need to depend on an independent plumber who does installations for Sears! Not something I feel like doing. Most plumbers are independent business people working on their own. While they might be very good at what they do, many are lousy business people who don’t understand good business practices, such as, showing up on time; quality customer service; and backing up your promises.
In fact, I don’t use a plumber per se; I use a plumbing, heating and cooling service. They are a business, a real business that is run like a business. They are full service. They will dispatch workmen to your home very quickly. I have never had a problem getting someone to come over when I want them there. They also have product catalogues with them so you never have to leave the house.
Once we narrowed down our choice of water heaters we looked at their quality ratings on the internet and chose the best one.
Now because the company pays the plumbers and technicians and keeps a cut for themselves, it costs me a little extra, but I don’t mind, because the convenience and peace of mind is worth it to me.
In other words, who is the customer and what do they really want?
Now for point two. This job was done quickly with absolutely the least amount of hassle. I also spent extra on a ten year warranty covering all parts and labor (ease and peace of mind), and this particular water heater (we have 2 in our house) is located in the attic. This means whoever installs it has to first bring it up a long staircase in the entry way, then has to bring it up the pull down staircase that leads to the attic. It is a job for two men, meaning additional costs. I guarantee you Sears wouldn’t have done it for $450.
As a salesperson, before you make claims about your product and service find out exactly what the prospect or client has. Far too often I find when someone tells you. “I can do the same thing cheaper,” what they usually mean is, “I can do the same thing cheaper by taking out a few things that are probably not that important anyhow.” Maybe to them they’re not, but to the customer they’re priceless.
Every customer is different. Find out what they want, and then most importantly give them what they need.
Prospecting is Not Prejudging
My son Michael is 19 years old. Last May, after completing his first year of college, he decided to take a year off and work full time, which he’s been doing since June ’06. Right now he is working as a delivery driver for a local pizza parlor.
The other night he came home with a story about one of his customers that points out the problem of not only prejudging prospects, but judging people by such things as appearance, age or job.
Michael had just delivered $300 worth of pizzas to a local BMW dealership. As he drove up, he said two salespeople were hanging around outside. Neither one even bothered to acknowledge him.
After he parked in front, he now had to bring the pizzas into the dealership. Michael had to put the pizzas on the ground because nobody was even willing to hold the door for him.
Once inside he was barely acknowledged. The manager, who has seen Michael quite a few times on subsequent deliveries, couldn’t even be bothered to say hello.
It’s obvious to me the salespeople at this dealership look at Michael and see a teenager, dressed in shorts and a tee-shirt, working a low-level job, who couldn’t possibly afford to buy a BMW today. So why even bother to give him the time of day, let alone be courteous? But let me tell you what I see, and what they might have if they bothered to find out.
I see a young man driving an Infiniti. Yes, it’s a used Infiniti, but if someone would have taken the time to ask they would have found that it is Michael’s and he paid for it. So now we know he owns his own car. That dealership sells used BMW’s; hmm, blown opportunity for a possible trade-in.
I see a young man working a full time job, who’s been working since he was 15, making his own money and if someone would have asked, they’d have found out that he makes around $500 a week, has saved over $8,000 in the last 8 months and is planning to go back to college in the fall.
There’s no doubt that someone like Michael, over the course of his life, will probably buy around 10 cars, if not more. He might also get married one day and I’m sure his wife will buy cars. How about his kids; do you think at some point in their lives they’ll buy cars? What about Michael’s friends; do you think they’ll ever have a conversation about cars and the best places to buy one? Guess who’s not going to get any of this business?
I don’t know about you, but I’m not psychic. I can’t determine how much a person can afford or whether they’re a good prospect just by looking at them. Well, let me ask you: what does a millionaire look like? Have you ever known anyone who dressed like a bum and had millions? I know I have. On the other hand, I’ve known lots of people who look like a million yet couldn’t rub two nickels together.
I also know that teenagers become adults. Young people in low paying jobs get raises and better jobs as they get older. But most of all I know that I don’t know a thing about you until I take the time to talk to you and ask questions.
Planning for Retirement: The Cost of Travel
A couple of months ago, I was on vacation in Singer Island, Florida with my wife, Linda. One night we went out to dinner with an old college friend of mine and his wife. They live nearby in West Palm Beach.
The conversation turned to their plans for retirement. They were going to move to Tennessee, where they had just bought a piece of property, and build a house.
Aside from the fact that they really liked this area in Tennessee, another reason they wanted to leave Florida was to substantially lower their cost of living in their retirement years. As his wife said to us, “We’d like to be able to travel.”
And then it struck me.
Everybody always says that about retirement: “When we retire, we’re going to travel.” My wife and I are guilty of it too. But does anyone ever realize how expensive it is to travel. I must admit, up until that point, when I really started giving it some thought, I never did either. When I started thinking about it, it hit me like a ton of bricks, especially when I recalled a business trip I had recently taken.
Last November, I keynoted a sales meeting for 300 insurance agents in Junction City, Kansas. I arrived there on October 31st, spoke on November 1st and flew back home on November 2nd. I flew on Southwest Airlines, stayed one night at a Courtyard Marriott in Junction City, the next night at a Courtyard Marriott at the Kansas City airport. I rented a car from Avis for one day and ate dinner at a local joint in Junction City one night and at Ruby Tuesday’s the next.
Not exactly an extravagant trip, yet when I turned in my expenses the bill was around $1,000! Can you imagine how much a real vacation would cost? I’ve never given it much thought, because whenever we have gone on vacation, we’ve never paid for airfare!
My family and I have traveled all over the world on frequent flyer tickets and hotel points. Once I retire, or cut back drastically on my travel schedule, good-bye miles and hotel points, and my wife and I are not the type who likes to rough it. Yes, I love outdoor activities like hiking, biking and kayaking. But I also love hotel rooms, room service and especially private bathrooms with toilets that flush. 
I realized if this is what we want, we better start planning for it. Luckily, the beginnings of a solution were right in front of me. At the time, we were staying in our Marriott time share on Singer Island. We talked to our salesperson there and realized if we invested now in buying another week, every year we could trade in one of our two weeks for 90,000 Marriott points. We could then use those points to travel, for free (hotel room and airfare), all over the world. Over the course of time, we would easily recoup our initial investment.
I’m not writing this to plug a Marriott time share; that’s just part of our solution. The other part is, of course, to keep saving your money: something we’ve always done. But most of all, it’s to define what “We’d love to travel,” really means. Do your research. List 10 places you’d love to see and then figure out how much it will cost (adding in for inflation and price increases), so that you can formulate a plan to achieving that goal.
Thinking long term entails more than just a wish list. It takes a lot of thought and careful planning.
The Simplest Way to Save Money: ASK!
About a week ago, my wife called our local heating/cooling/plumbing service company to send someone to our house to check out the problem we were having with our water heater. Naturally, it was not good news (is it ever?).
The plumber informed us that we needed a new water heater. After going over our options, on both water heaters and warranties, we found that the bill would come to $1,933. Naturally, the first thing both my wife and I wanted to know was: “What can you do for us?”
The plumber gave us the name of the right person to speak to and the next morning I got on the phone with the office manager. By the time I got off the phone I had obtained a discount of almost $350. All because I asked!
The point of this story is that most people just accept any price thrown at them. They’re either too afraid or ashamed to ask. There’s no shame in saving money. Besides, what’s the worst thing that could have happened to me when I asked for a discount? They could have said “No.” So what, I’m still no worse off than I was before.
They don’t put you in jail for asking for a discount, and also no one is putting a gun to the seller’s head to give one to you. I’m amazed at how much money both consumers and business people leave on the table.
Call all the companies you do business with and find out if there are any special deals going on. Call your phone company, cell phone company, utility company and find out if there are ways to lower your bills. And don’t forget to check your bills thoroughly each month; companies make mistakes. In the last four months, I found over $200 worth of mistakes on my cell phone bills. Better off in my pocket than theirs.
Now, let’s look at this from the salesperson’s or business owner’s side. As a business owner, I always have prospective clients asking for discounts, either on my fee or on my products (audios, videos, books). My policy is this: On my fee I never discount unless someone is willing to book me for multiple engagements. On products the policy is the same: bulk orders get the discounts.
This does force me to say "no" to many prospective clients, but remember it is the client’s responsibility to ask for a discount. They want to get the most they can for their money. However, as a salesperson or business owner, it is not your responsibility to cave in.
Once you start dropping your price too quickly and easily, be prepared to always drop your price. There’s a great old expression from my days as a salesman in The Garment Center in New York City: “The way you break them in, is the way they’re always going to be.”
Don’t be so quick to drop your price. Usually, when a client asks for a discount, they’re testing you to see how much they can get away with. You’d be surprised how many people back down when you say, “No.”
Quick note: I just asked for and received my first ever senior citizen discount at the movies (I turned 55 in October). On second thought, I should have started asking when I was 40. Most of the people working at movie ticket booths are teenagers and to them everyone 40 and above looks 60 anyhow. 
Skype: Another Easy Way to Save
I don’t usually do entries on consumer issues or product plugs. But when I come across something that I feel can be of great benefit to my readers, I feel it’s my obligation to let you know.
Like so many of you, I am constantly looking for ways to save on my monthly telecommunications charges. Between local and long distance calling, high speed Internet access, cellphone, fax, and toll-free numbers, the costs can get out of hand. Let me tell you about something I’ve found that can really help bring your costs down. It’s called Skype.
Skype was invented by a group from Eastern Europe: the same people who invented the file sharing service KaZaa. It is VOIP calling (Voice Over Internet Protocol), but as opposed to Vonage and other phone companies who offer VOIP, you don’t need a phone for this, only a computer and there’s no monthly charge.
First go to www.skype.com
If you want to call someone on a land line or cell phone who doesn’t have Skype, you can do that too. In fact, to most countries in the world the cost of a call from Skype to a land line is 2.1 cents per minute! This includes China, Australia, Hong Kong, Canada, most of Europe and anywhere in the U.S. Now while services like Vonage allow you to call within the U.S. and Canada for free, they still have a monthly charge of twenty-seven dollars. At 2.1 cents per minute you’d have to use almost 1300 minutes a month to make Vonage worthwhile. There are no monthly charges on Skype.
As I said before you don’t need a phone to use Skype. You call right from your computer. If you have a laptop you don’t even need a headphone or ear piece. You can talk right into the embedded microphone most laptops have and listen through the speakers. Those of you with desktops will need an earpiece and microphone, but that’s easy: Radio Shack sells a Skype earpiece with microphone for ten dollars!
I have found I have better call quality on Skype than I had with Vonage and with the Skype earpiece, I can be on a call and still have both hands free to work.
I think for anyone who has a business where you have employees scattered all over the place, this is a tremendous way to save money on phone bills. Just get all your employees on Skype and speak to each other for free whenever you want. Also, not a bad idea for those of you with family members living far away.