Ok. You have to present 3 prices to a client. A good, better, best scenario. Which quote would you present first, second then third and why?

Why?

I have NEVER done this. I meet with the client to discuss goals and expectations of the completed system. I'll feel them out then give them a quote to digest. I try to get some expectation of cost but its not always possible. I will drop things like, that aspect of the job could cost $18-20K just to test the waters.

I then follow up to reevaluate. They will give you feedback. Then, if its too much they will give you some idea of what they want to spend. You will need to revisit their initial requirements and prioritize them. If the budget they give is unreasonable to the requirements, now is the time to figure it out and tell them.

Typically I make substitutions without destroying the job. $500 pr speakers could be $250, skip the few few zones of audio that required the additional controller, scale back to cheaper TVs, the $1,800 AVR could go to $800, etc. This type of stuff can usually take a big chunk from the quote.

On smaller jobs, say under $20,000 that should be no need for for than 1 revision, 2 tops. I'd never give them 3 out of the gate. Most will choose the cheaper because its there and you'll leave money on the table plus end up always selling lesser quality systems. The biggie is information overload to the client. IMHO 3 is WAY TOO MUCH info at once.

But then again, WTF do I know

I think both you and Oex have the right idea as far as price quotes. I normally will hound the client to give me a budget that they have in mind and then come in just under that budget. So if the client says "$10,000.00" I will price out the system always to be a crazy amount like "$9,967.00". If they give me an actual dollar amount I close 90% of my deals.

On the other hand (the lawyer in me), if I am dealing with a client that wants a good, better, best then I would "flagship". Flagship is aterm used in the retail biz that means that you present best, first, better, second, and good, last. This is based on the theory that you can always drop your price easier than you can raise your price. When I do the good, better, best scenario 10% take the best without even going in-depth to the better and good proposal. What is interesting is more than 70% of the time my clients will always take the better (middle) quote and the remaining 20% will go with the good quote. This isn't just based on my quotes but is based on multiple retail and in home sales studies where when presented with three prices the clients didn't want to be too cheap or pay too much so they picked the middle quote.

The good, better, best scenario usually occurs when I am dealing with a client that has some cash but is the analytical personality type.

No matter what quotation strategy I use above, always always always give the quote in-person with all decision makers (boyfriends, girlfriends, spouses, etc.) present.

In 18 years I have never given a good better best. I give them 1 proposal and that's it! Any changes are a revision of that proposal. I have never gone past 1 revision and it's usually for the better! When we need to lower the price I say what do you want to loose and where!

Gman,
I do this for every proposal. I always show the least expensive option forst. Human nature is to want more. I always ask a budget and when they dont have a number or don't have any idea what this stuff really costs I give Good, Better, Best. This works very well for us and always always leads to a higher sales ticket. No one wants the bottom. People forget about all the other random stuff little systems once they see three real solutions.

Grade differentiation is key with this strategy.
1. Control
2. Speakers
3. AVR or Pre/Pro
I keep all the sources the same and the displays are almost always solidified before this discussion because we recommend one and let them shop till they drop.

There are some examples of this at IP. I saw a few PDF files with examples of the good better best.

One thing to remember here at RC is that every guy posting here is dealing with different clients. If you are Ej you wont be passing out good better best proposals but if your typical job is between $5-50k then IMO its a perfect strategy to get people to understand what things cost and to show them that they have options. $10k or 20k or 30k might scare them away but if you illustrate the differences with the good better best its an easier pill to swallow.

ok call me stupid... but dont you ask for a budget? if you have a budget why do you need to play the game?

when i go out to a potential customer i always ask for a budget and i always give a guestimate as to the costs involved..... before i ever give them a proposal....

this approach seems to work very well for me..... YMMV

ok mr customer based on experience and what you want your gonna be about 60 grand is that ok with you!

if yes: proceed to give written proposal

if no: where are you confortable and where did you think you would be?

5 minutes of talking to the customer saves me the bullshit of 2,3, or 4 proposals

Ceied,
I agree this is useless on both sides if the client has any idea what they want to spend and they know what this costs. But when you deal with clients new to this arena that give you rough numbers like $4500 or something less than $8000 but want a media room plus 4 zones of distributed audio more work is required. When we are acquiring new clients this helps us build report with them by educating them on all the options available. If someone said how about $60K then no problem but most of the time we are running into clients that dont even know what a good control system runs.

With our referral based clients they already have a reference point (the referring clients system) so its much easier.

Our typical client gives us a wish list and we write up the proposal and they say "do it". These are $200k+ clients.

Occasionally we get a referral from an interior designer with a client who has no idea what they want or what it costs. Perfect example was a job downtown a couple of months ago. I go out to meet a client at a million dollar condo. Old guy who shows me where the old DA system was and tells me how they are moving walls and replacing all of the flooring. We talk about control system options andhis wish list and i head back to the office. I passed the project to another dealer we work with because of our schedule. Other dealer meets with the guy and gives him a proposal.

There is no reason that this guy should be saying no to anything that was proposed. Its a million dollar condo, they are doing major renovation and hes up there in age and no reason to hold on to the purse strings.

He tells the other dealer that he doesnt want to do it. Just wants someone to reinstall what he had at his old place (TV and BD player).

I think that a good better best might have landed this client vs passing him off to abt or the geek squad. It was obvious he wanted DAV but for some reason he talked himself out of it.

Another reason i think its a good idea is that lets say you have a client who says their budget is $50k. How about you create a good better best proposal where the best is $75k? The better projector might be an easier sale when they can compare the options. We had a job once where the client had a $5k projector that he just bought. My boss talked with him about the sim2 C3X and he agreed to buy it and sold his other PJ online.


Not everyone can handle clients like that. My boss can sell water to a lake. Some have to rely on tools and strategy even when you are just trying to get the client to agree to what they already want. The good better best is something they can use to save them from the 5 minute talk that could kill the deal. The 5 minute talk is something that you are good at but i am sure you know guys who would fall on their face in that situation.

I have seen/heard dealers kill sales just because they steer the conversation the wrong direction. I think its good for some but obviously not for everyone.

i consider myself the village idiot so i figure if i can do it then everybody else should be able to... =)

Stamp
is absolutely correct. All of my better and best are above their proposed budget and it works.

I personally think the good better best strategy is a perfectly good one. It allows the customer to have options. It allows the customer to see that you have taken the time to put together 3 separate proposals. 90% of new clients that I meet with, have no clue what AV is worth and it can be difficult at times to wiggle a budget out of them. I'll ask and explain why I need a budget but generally I end up having to say " Do you want to spend X or do you want to spend Y".

I know I am beating my head against the wall but offering clients choices is the same as having a store with fully stocked shelves.  At the higher end there might be fewer choices, it doesn't mean there is only one.

Imagine going into a grocery store with only one of type of product, no choices, the customer might go across the street to a more "fully stocked" store.  Most companies carry a few product lines with multiple skus to choose from, why not offer some options.  Putting out one bid is kind of a take it or leave it scenario and while it might work with some, others want more.
Realize I have a dog in this race with my products, but qualifying a client by offering different packages allows a dealer do multiple things in that all important first meeting.
1. Are they really my client, based on budget, attitude and expectations.
2. What areas are important, is automation the hot button, is home theater, maybe music around the house or even security for the paranoid rich guy.  Set your budget not just for the whole job but each discipline.
3. What products do they want, audiophile quality, night vision cameras, 3D, this helps in narrowing down the bid?
4. Are they going to use your bid to shop around or are they going to sign with you and pay a deposit to move forward?

There is no one right way to do anything, so having choices for clients to pick from doesn't seem all that bad.
One of my clients this morning called in to add an iPad app and I asked him how it was going, he said, and I quote "it was the key to everything".  He meant that qualifying and creating a budget before going back and fully engineering saved him hundreds of hours and increased the time he and his staff spent selling.  Bottom line, they sold more in less time.  As long as it takes us to create a proposal for a job we don't know we're going to get, giving a client options is not the only way, just a different approach.

We can't all have Ed's charm and style to break down someone's resistance.

Oex nailed it in post 2 and Ed topped it off in post 7.
I am able to walk away from 80% of sales calls with a clear vision of a clients wants, needs, expectations, understandings, and budget.
The key is that the client walks away from that meeting feeling the same way.

Educate your clients. Have fun with it. Earn their trust and you will get every piece of information you need to make an informed decision on product choice that earns you the lifelong title of "My A/V Guy".

What does your customer want?
This is the only thing which should dictate the cost. A good, better, best approach to have any significant price difference would also be 3 completely different systems.
Find out what they would like first, then what they can afford and if the budget is too small for everything leave some rooms out and add them later. Dont just put in cheaper gear, because the cheaper things get, the less likely they are to work properly.