Customers v/s Businesses

[dnaps]

I was reading a recent post that was asking for help and opinions on a quote that a customer had received on an A/V setup. A few people said the prices were too high and that the customer should purchase from the internet... a few said paying the higher prices and getting a professional installation are worth the extra bucks. I am in the AV industry and like the business that quoted the job, I am in a very small area. I have struggled through the past few years trying to even come close to competing with internet prices.... and its tough. Ive run into jobs where you spend many hours building system quotes and the customer takes what you've told them and buys from the internet. Some businesses try not giving out brand names and model numbers of their equipment, but people today want to know what they will be paying for. And personally, I dont blame them. If I were the customer, I would want to know as well. I've gotten to the point where if I dont feel good about a client, I will charge for the quote. If I'm awarded the job, the price charged for the quote is subtracted from the final bill. I've also given free maintenance for a year on equipment that I have installed. And as long as it doesnt become a regularly occuring problem, I will make house calls when someone cant find the correct input or want small setup changes at no charge. Now I'm not trying to ruffle anyones feathers or conclude whats right or whats not.... I'm just interested to hear the different outlooks and ideas from customers and people in the industry. Sorry this turned into a novel and I apologize if this topic has been discussed far too many times.

 

[MDS]

I think it all depends on the type of customer and the scope of the work that needs to be done:

- If you have little experience or knowledge of a/v equipment having a customer installer choose your components, run all the wires, connect and configure the equipment is the right way to go. One should not be so naive as to think the installer will sell the equipment to you at his cost or even match internet direct prices. However, an educated consumer would at least ask for the equipment list and check prices to see how much markup is involved. He could then use that as a basis for price negotiation if he felt the markup was excessive but again not expect the installer to match the prices.

- If you do have some experience and knowledge of a/v equipment and more or less know what you want, then you should only hire an installer on a time and materials basis to do the actual install. I'm sure some installers won't take such a job because they only do custom packages from end to end but some may offer that service.

I fall into the latter camp. I don't need help picking out equipment or setting it up and configuring it. I DO need help with getting the wires run in-wall and in-ceiling properly. The A/V installer I've chosen will do it on a time and materials basis. The 'materials' I'll end up paying for will be the actual wire and any wall plates or connectors that are needed. So other than the cost of materials, the quote is in terms of time - $75 per hour per technician and the total bill will depend on how long it takes them to do everything (they of course gave me a rough estimate of time but it may change slightly when they get here and determine what is feasible to do without tearing the walls down. )

I did ask if they would install in-ceiling speakers for me if I buy them myself and the answer was Yes with the same rules - time and materials to do the job.

 

[highfihoney]

I've gotten to the point where if I dont feel good about a client, I will charge for the quote.

Your killing yourself by charging for quotes,i see both sides of the coin as im a consumer of high end audio gear,a reseller of high end audio gear,cars & motorcycles plus im in a business that requires giving estimates(contractor),giving estimates is all part of the business no matter weather its audio instalation or building a factory,let me ask you this,if you needed your home replumbed or a new roof put on your house would you feel comfortable paying out of your pocket for an estimate? no way jose

I hear from dealer friends of mine all too often where they blame the internet for consumers wasting their time & getting quotes just so they can shop elsewhere or do the work them self,this may be true but charging your potential customers is doing nothing but driving them away & making them talk bad about your business to their friends & family.

If your business is in an isolated area or your not getting enough traffic maybe moving your business to a better local,branching out or some advertising will help but i assure you that charging potential customers for a estimate will never get you any business but it will get you bad word of mouth.

I feel your pain believe me,when i put up an expensive peice of gear for sale im flooded with time wasters asking inane & stupid a$$ questions that no serious buyer would ever ask,the same thing goes when i sell a motorcycle,lots of tire kickers just wanting to sit on a harley & dream with no real intention of buying anything but i always treat them like they are the king of france.

Dealing with internet savy buyers is new to most businessmen & the one's who are finding way's to use the internet to their advantage are thriving & the one's who only blame the internet for their business slump are dropping like fly's,its a world economy now day's brother.

 

[stratman]

I agree with HH, you'll shoot yourself in the leg if you charge for quotes, in my business I deal with people who want (need) quotes constantly, I go out of my way and meet with potential clients at odd hours(and I've got a family to contend with ). I've been in my industry for 22 years and have my own studio for the last 12 years, I've never advertised for/ or solicited business, 100% of my work is referral (talk about tough), it's your reputation that will carry you. Also, which segment of the market are you catering to? Low (toughest), mid or high end (I refuse to cater to the low end, it doesn't pay for me, they usually realize they can't afford me and to be frank I try to discourage as nicely as possible?) Maybe you should rethink your business model/strategy, advertise your positives (sterling service, go the extra mile, provide what the net can't), you've got to show clients why it's better to do business with you than the net. Let's face it, in today's business reality you're going to have to wrestle with net commerce, to win you're going to have to change your mindset and business strategy. I wish you all the luck.

 

[MDS]

Many types of businesses charge for estimates, they just disguise the charge as a 'trip charge; in other words the estimate is free but you have to pay us to drive out to you. They usually waive the fee if you decide to have them do the work exactly as dnaps said he does.

 

[dnaps]

,let me ask you this,if you needed your home replumbed or a new roof put on your house would you feel comfortable paying out of your pocket for an estimate? no way jose

i can see your point and can guarantee that you may lose a customer here and there doing it. its definently not something i practice very often and you'd be suprised that if you explain your reasoning to the customer, they often understand. again this isnt 20% of the job or even close.... the few times i have charged for quotes its been a very minimal fee. i do very much agree with the fact that a happy customer is much more important than a few hours of my time.... then again having a happy customer doesnt pay my bills when i lose money either

 

[dnaps]

I agree with HH, you'll shoot yourself in the leg if you charge for quotes, in my business I deal with people who want (need) quotes constantly, I go out of my way and meet with potential clients at odd hours(and I've got a family to contend with ). I've been in my industry for 22 years and have my own studio for the last 12 years, I've never advertised for/ or solicited business, 100% of my work is referral (talk about tough), it's your reputation that will carry you. Also, which segment of the market are you catering to? Low (toughest), mid or high end (I refuse to cater to the low end, it doesn't pay for me, they usually realize they can't afford me and to be frank I try to discourage as nicely as possible?) Maybe you should rethink your business model/strategy, advertise your positives (sterling service, go the extra mile, provide what the net can't), you've got to show clients why it's better to do business with you than the net. Let's face it, in today's business reality you're going to have to wrestle with net commerce, to win you're going to have to change your mindset and business strategy. I wish you all the luck.

i would love to cater to the high end of the market.... unfortunantly in a small populated area, I havent much choice other than to take the low end as well. moving the business would change customer base a great deal... however I have no urge to leave and im honestly not trying to become one of the fortune 500... i enjoy what i do and just hope ill be doing it for years to come....

thanks again for everyones input

 

[highfihoney]

Many types of businesses charge for estimates, they just disguise the charge as a 'trip charge; in other words the estimate is free but you have to pay us to drive out to you. They usually waive the fee if you decide to have them do the work exactly as dnaps said he does.

Trip charges are usually associated with a service call & are usually based on the customer having a problem that needs fixed & they dont know what the problem is so a service tech along with a fully stocked service truck is sent,an estimate & a trip charge are not the same.

A trip charge would apply to this case if he were called by the home owner to correct a problem with an existing service,came to their home,found the problem,outlined the scope of work to perform the repair but for new work it is not customary for any contractor to charge for an estimate.

No building trade that i know of charges for estimates.

 

[Haoleb]

I work in the industry and while I am currently an installer I used to be making the proposals. The company I work for charges MSRP on the products plus installation. And while it does usually come out to be expensive at first glance, Whats included in the price is setting up all the gear and if that means doing a retrofit with running wires in the attic or whatever. All the cables are custom made etc. On alot of the bigger jobs it can take alot of time to get things trimmed out, programmed and everything working. When it comes down to it, its a buisness and most of our clients are more than happy to pay a premium for what they get.

At first glance of that other thread without pricing the gear i thought it looked completely reasonable. It seems like everyone else disagreed. Of course you can get the stuff a ton cheaper online. And if you know how to hook it up and do a professional job then you would have to be stupid not to. Alot of our clients dont have a clue about hooking up a simple tv and reciever so when it comes to doing an entire house with automation and racks of equipment they certainly arent going to be looking it all up online and seeing how easy it is to do themselves.

 

[philh]

Sell your installation capability. Ask the client if they understand the difference between HDMI, Composite, etc. How about configuration options for HD and sound. Do you understand the difference between dolby digital and pcm Establish different installation rates, and I have no idea if the numbers make sense, $75/hr installing equipment purchased from me, or $125/hr installing equipment purchased from the internet.

I get tired of going over to peoples houses that brag about so and so A/V installed this really expensive {insert large value here} high end digital set up, and not only does it sound like crap, 1/2 the time I can find at least one non functioning speaker. Next door neighbor was an excellent example. He had these HUGE MF speakers. Shortly after I moved in, he was bragging about how good {loud} they were. I'm sure they were, sometime before you blew 3 or 4 of the 20 drivers. Then he gets an expensive DVD player, but doesn't attach a digital audio cable. was getting ready to place an order for some stuff, and ordered him a optic cable. Installed it, configured the DVD player, and suddenly his whole room comes alive. Probably a reason nobody ever invites me over anymore, LOL.

 

[BMXTRIX]

One of the biggest issues I have seen with home A/V installations is that the labor rate is way to low, and way under budget... so they make up for it by overcharging on products.

Now, with my side work, I try to compete with internet pricing or stay within about 10% of that pricing. One thing I tend not to allow is CFE (Client Furnished Equipment) for cabling. I don't gouge on pricing for anything, cabling included, but I do custom make everything (except HDMI) for the client so it fits nicely and is the right length, the first time.

CFE gear is nifty, I write it into the contract and include verbage to discuss it. I'm 100% not responsible for CFE. It must be on site, ready to install when I get there. It includes a full charge as if I had sold it to them, and then carries absolutely zero warranty, setup, or guarantee from me other than the most basic of setups. It is inappropriate to expect me to know every piece of gear on the market or to spend 2 or more hours researching your product that I will never touch after selling it to you... if you aren't going to pay me to do that.

But, if the client understands this, then I have less of an issue with them purchasing the gear on their own than most places. I do have problems when a client doesn't want to discuss pricing with me at all as there are times I can adjust my pricing just a bit if it makes it competitive.

When the day comes that a client has a projector malfunction, that I installed, but did not sell them - and that client expects me to diagnose the issue at no charge... Well, then I likely will feel differently.

When's the last time you brought your car in for service and told the mechanic: "Hey, brought my own brake pads, rotors, oil, and filters... just need you to install it all!" I think that CE installers need to get their focus on labor numbers to ensure that everything is accurate. If a job is going to take 12 hours of installation, 4 hours of design, 4 hours to program, another 5 hours of travel time, etc. then those numbers need to be figured into pricing from the beginning. Then as parts are bought, or not, by the client, nothing else in the price changes.

 

[darien87]

Seems like most of the responses are from retailers. So I thought I'd give you the consumer's point of view, (or at least MY point of view).

To me, there is no such thing as disposable income. If I was hella rich, and money was no object, I would have no problem going to a high-end dealer and paying whatever he was charging. But I'm not rich, so I just try to do some research and get the best equipment that I can afford.

Case in point, when I bought my Denon 2805. I wasn't really dying to have a new receiver, but I wanted to upgrade, (my old receiver didn't have DTS). I went to a local Magnolia and spent an hour or so with a guy there. I also wanted to get rid of my old HUGE floor speakers and change to a satellite set-up. But he talked me out of that. I listened to some bookshelf speakers, (M&K I think), and agreed with him that too much of the midbass seemed to be missing. I ended up buying my Boston VR2's from him. I think the guy's great and have gone back to that store many times just to see what they have and shoot the breeze with him. But when it came to spending $800 for the 2805, when I found it online all over the place for $500, just didn't make sense to me. I did go to him and tell him the deal. I asked if he could even come close to $500, as I would have rather have given him the business than someone I hadn't dealt with before online. But he said he couldn't. So I bought my Denon online. The warranty thing didn't bother me, because I bought a 4-year SquareTrade warranty for about $30.

Customer Service is important to me, and I am willing to pay a little extra if the guy makes me feel like he cares about me as a customer. But when I can save hundreds of dollars by shopping online, it just doesn't make sense to buy retail. It makes me feel bad to screw the local retailers and I try not to do it as much as possible. But in the end, I have to do what's best for me as a consumer.

So I would say, your best bet as a retailer is to try and keep your prices as low as possible and really push your customer service. Make your customers feel like you REALLY care about them, and that you'll gladly help them out after the sale. I can't tell you how much the little things mean to me, like the fact that Eric at Magnolia remembers my name. Stuff like that goes a long way with me.

 

[InTheIndustry]

I had about three different long long versions of this written out, but decided that what I wanted to say might be too controversial. So, I will leave it at this.....

You know your market place better than me, but I think a lot of the problem can be found in your sales technique, bid techniques, and product offering. Change it up a little from time to time to experiment.

Also, feel free to PM me. I'll give you my phone number (toll free) and we can talk. I'll gladly try to help out another A/V integrator who might be having some questions.