Low Balling is Expensive in the Long Run
When you get down to the bottom line, the reality is, the moving industry is an extremely competitive market. While there are busy times where the demand for movers is higher than the supply, the majority of the time is spent in fierce competition. Honorable and ethical companies compete or go out of business, some companies appear to resort to what’s known as “low balling”.
Low balling is not only the wrong thing to do in every aspect, it’s also expensive in the long run. By the time it all catches up, you’ll be audited, fined, and face some potentially spectacular consequences. At the very least, you will end up spending more on each job fixing problems to avoid fines and penalties. In the long run low balling is stalling the inevitable and morally reprehensible. The best way to compete is to sell on value, prevent your sales reps from low balling and win business with good reviews and positive testimonials. At the end of the day, ensuring that your reps have all costs included will be the best pursuit for the sake of long term growth. Then you can put some money towards showing the world what a stand up company you are.
It Starts with a Bad Sale
The most common cause for low ball estimates is a rogue sales rep who just wants the deal. Plenty of inexperienced sales reps give big discounts before they deliver a price. This leaves the customer feeling like they didn’t win. To win the deal, an unethical sales rep, instead of convincing the customer of the financial reality, will beg a manager for an extra discount. Now the job is booked but it is below operating costs. Repeat this process several times a week and you have a calendar of landmines. Train your sales reps to leave room for more discounts before delivering prices to ensure that the deal is closed within operating costs. It is a psychological reality that customers want to feel like they’ve won. Train your reps to create that experience, build rapport, and meet the needs of their customers.
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Shaving Cubes for a “Deal”
Another sales rep pitfall to look out for is “shaving cubes”. It is a common occurrence to find an estimate with the same inventory as another. The problem is when they have the same inventory but with far less cubic feet. This is unfortunately permitted by most existing moving CRMs, as they don’t have native features to help managers avoid these types of problems. The only way to ensure your reps aren’t pulling this doozy is to manually inspect each estimate. While it may turn into some serious work, it’s worth it to make sure your reps are performing as ethically as possible.
Mistakes Happen
Missing miscellaneous fees are a calamity on moving estimates. Moving service charges can start as low as $75. They can be as high as $750 in some cases, if not higher. This is why leaving out associated fees from an estimate is a quick way to arrive at a low ball estimate. The reason this happens is because moving software applications require sales reps to manually enter these fees on the estimate. The only real way to prevent this is to manually review each estimate.
Maybe it’s not even on purpose; Misc fees, bulky item fees, little details that a sales rep is liable to overlook or forget.
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