Do I warn customers about competitors "bait-and-switch" tactics?
March 9, 2016 5:52 AM   Subscribe

Do I warn my potential customers about competitors "bait-and-switch" tactics?

How do I deal with my competitors and their extremely annoying bait-and-switch tactics? Over the phone, they will offer extremely competitive rates to customers. Then after 1 or 2 days they usually discover an "extra-ordinary" problem and the price goes up substantially. Other times, they will not even give a price, they will just set-up a sales meeting.

I believe this is making me lose out to some very lucrative jobs. For me, the problem is when customers call asking for a price i am way too honest and up-front on the phone. I will give them a price for a job and then stick to it. Also, I publish a guideline of prices on my website - while my other 3 competitors (in this niche area) don't even publish any prices.

Please don't say "find less price conscious customers". We always position ourselves as premium but transparent. This does pay off in terms of excellent reviews we get from customers and in terms of word-of-mouth recommendations.

I know this problem has been happening since man has been bartering axes for food but in a modern day context - what is the most effective way to deal with it? I fear that if I even talk about "bait-and-switch" tactics on my website - it will just make my business seem less trustworthy? Are there any books or websites that deal with this problem? What are your suggestions?
posted by jacobean to Work & Money (12 answers total) 2 users marked this as a favorite
 
Best answer: I would point it out. "My price is firm, I will honor the initial deal. If you choose to go with someone else, you may find that their prices change. Before deciding, ask to speak to their previous customers and ask them if the initial price was the price they paid in the end."

Basically, educate your customers on how to evaluate the bids they're getting. Teach them your business. This is what I did when I was selling complex data networking services at a premium price. I won a lot of business and a lot of friends that way.

Be a teacher. Be honest. Have integrity. THAT's how you win business.
posted by Ruthless Bunny at 5:58 AM on March 9, 2016 [45 favorites]


Can you state on your website that your stick to your initial quote?

Maybe give a list of questions for potential customers to use when vetting services, along with your own answers. For example "Questions you should ask before choosing your widget provider". You can add a question about if the firm sticks to their initial quote. As an added bonus this is probably good for your website SEO.
posted by like_neon at 6:00 AM on March 9, 2016 [10 favorites]


I would google the names of your competitor companies plus "bad" and read the complaints (do the same for yourself so that you don't look like you are blowing smoke). Because TBH, 90% of the time, customers get upset when what you describe happens to them, and they log and complain about it everywhere on (their blog, yelp, BBB).

So when the customer calls in and asks to switch, point them to the reviews for their own edification and say that they have odd proactices that they should know about and leave at that.

Personally, I would be more likely to trust numerous reviews vs the person on the phone because some companies (not you, I get you are coming from) can also upsell you, give you different verbiage on the phone.

Looking up reviews is the logical step, but I know many people who never take that step.
posted by Wolfster at 6:04 AM on March 9, 2016


The problem is when customers call asking for a price i am way too honest and up-front on the phone.

You didn't say what sort of work you're doing, but is it consistently simple and predictable enough to give a firm quote based on a single phone call? Maybe scheduling sales meetings wherein you can clarify the client's specific needs and adjust the quote accordingly, not to mention establish rapport and make them feel special, would make more sense than the way you're doing it now?
posted by jon1270 at 6:09 AM on March 9, 2016 [4 favorites]


We need to get multiple bids for projects when using consultants then be able to explain our decision process based on the quotes. So make sure you are supporting customers that may want to go with you but need a good rationale (e.g., includes complex scenario X in price or X revisions etc).
posted by typecloud at 6:16 AM on March 9, 2016 [1 favorite]


sounds like you're describing the common situation where there are common scenarios that result in cost overruns - often they can be construed as the customer's "fault," but the customer so commonly makes that mistake or overlooks the inevitable charges that your competitors can run quotes by them that don't include those charges.

So, as others have said, be the one to educate your customers. "When I've done these jobs for others, I've inevitably found that when we get started we'll need to X, or the customer sometimes overlooks Y... so let's walk through those things and see if they apply to you." This approach raises the question in the customer's mind whether brand X thought about this stuff.

Downside is that you will inevitably educate some prospects - who will then hold your competitor's feet to the fire and get a better quote out of them. But if and when it all goes balls-up anyway because you can't fix crooked (or stupid), they'll remember you as the company that seemed to have it together in the first place.

I've also found that doing this kind of interview with the customer does a good job of smoking out what kind of clients you really want/whether you want THAT client. If they hand-wave all the things you're bringing up, and keep being disingenuous about whether these extra-cost situations will apply to them, they may well be an all-too-common type of client that tells you they need a Corolla, wants a Lexus, and in fact your costs to do the bare minimum job after you get mired up to the axles in it is more like a Rolls. So let Brand X low-ball these kind of clients and then try to collect enough to do the job.
posted by randomkeystrike at 6:25 AM on March 9, 2016 [3 favorites]


Keep doing what you are doing. Word of mouth goes a long way. If you don't already have social media, set it up. Tweet about your happy customers, snapchat finished projects, and post interesting information on facebook. Fill up the internet with your good reviews and reliable service and prices. It will go much farther than pointing out someone else's shady practices.
posted by myselfasme at 6:30 AM on March 9, 2016 [1 favorite]


As a customer I do get multiple bids on larger ticket items. When one bid comes in higher than the rest I usually ask them why, what makes them worth the extra money? Maybe you should just tell them upfront, "We may not be the cheapest initial bid you get and here's why; this is the price you'll pay, once you sign it won't go up no matter what we find in there, we use these higher quality materials, we have licensed people, we have sterling reviews from past customers, etc."

Basically give them your value proposition, and by telling them all those things about you your customer now wonders if any of those things apply to that cheap bid and they did that part all on their own. You are keeping it all about you and why you are worth it, you aren't bad-mouthing competitors.

You aren't going to win every bid because some people may not agree that that value proposition is worth it but as long as it actually IS worth it then you'll win them too.
posted by magnetsphere at 6:54 AM on March 9, 2016 [6 favorites]


Why do you publish your prices on your website, when three out of four competitors in your niche do not? I'm not saying you shouldn't necessarily do it, but maybe you're bringing up price too early in the sales process.

Think about moderate to high-end jewelry stores. They always keep the price tags face down in the cases of jewelry. They've obviously found that letting customers know prices before they examine a piece closely puts a damper on sales.

Since you do show your prices early and if you want to keep doing so, ask yourself why you're doing it and turn these reasons to your advantage.
posted by Leontine at 6:56 AM on March 9, 2016


If you are the only one posting prices, then you're giving both competitors and potential clients a starting point for negotiation. You are "X" and everyone else is "X minus 1."

As a client I want to hear what you do, what you can do for me, and what you will cost me. You're off my list the moment you tell me the reason I should choose you is because the other guy does it poorly/wrong/unethically/whatever.
posted by headnsouth at 7:12 AM on March 9, 2016 [5 favorites]


I think it is a good idea to explain that your quote will be honoured, what is included in the quote and that there aren't any additional charges on top of this. And if they have questions about other people's pricing (ie why do they charge less) they should ask those people if their quote includes everything that yours does.
posted by any portmanteau in a storm at 9:48 AM on March 9, 2016


I have a similar situation when making quotes. In my case, I tell customers that I am quoting them the highest price in the likely price range, the factors that go into the possible range of costs, and the ways in which I will work with them (by prototyping or work they can do from their end) to make sure they only pay for what they need. I guarantee to them that they won't be charged more than the quote. Depending on your field, it may be that a detailed discussion prior to the quote is preferable for many of your customers.
posted by tchemgrrl at 8:15 AM on March 10, 2016


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