The news is good, the recession has bottomed out. But the war for business is still raging. The battle for customers is ongoing in the marketplace. Consider an email I received recently.


Business in these parts has become disgusting some days. I keep hearing your words, “A period of declining margins is the first sign of a business going out of business” (something like that). How in the world do I keep my margins up when jobs are not selling unless they are discounted? I do take away the lifetime installation warranty and go to a one-year just like everyone else, and it has saved the margin a time or two, but the majority of people are not caring about quality like they used to. It’s all price, price, price and price.

My competitors haven’t helped the situation. There are those in this town so desperate they are telling customers: “We will beat any price.”

I had a customer shop here for two hours, get her house measured, get our quote and wood sample (insisted on seeing it in all different lighting in her home). When we called her the next day, she had received a quote 12% lower than ours. We called her and told her we could match the quote, but would have to take away the lifetime warranty. She said she’d let us know. She called back the next day telling us that the other company came down another 5%. We basically told her to return our sample. 

So, I tried one more time to save the sale, I called her and asked what would it take to earn her business (She told us she was more comfortable with us). She said, the other company said they’d beat any price you gave me. So I said, “So even if I took another $100 off, you would not order with us, you’re going to see if they will beat it?” 

She said yes. I said well, let’s part ways and bring me back my sample. After hours spent, selling quality and service and knowing she wanted to do business here, she still bought some place else because it was cheaper!!!

If it were just this job, it wouldn’t be a big deal. But we’ve lost a lot of jobs lately. It seems as if the last three weeks are worse than it’s been the past year.

Do you have any words of wisdom or encouragement for me? Today I feel like going to bed, pulling the covers over my head and coming back out sometime in 2010. Of course, I don’t have much staff, so I can’t leave!


I struggled to respond to this retailer and good friend. It took me several days of thought.

While driving, listening to an oldies radio station and in deep thought about this retailer’s dilemma, I heard the Kenny Rogers song The Gambler: “If you are gonna play the game, boy, you gotta learn to play it right.” He continued, “You got to know when to hold ‘em, know when to fold ‘em, know when to walk away, know when to run.”

There was the answer. In tough times, we have to make smart, calculated decisions, just like playing a poker game. We have to watch and be aware of the cards on the table. We must study the eyes, body language and action of the players to understand their strategies. Why? So we can decide when to play, hold, fold, walk away or run.

There are times to take low margin sales and sales we would normally walk away from. But those decisions must be well thought out and consistent with a calculated strategy. So, how do you do it?

In business, you need real time information. You need to know what you need to sell in order to break even. That number may change daily depending on the margin of the sales you made yesterday. Do you monitor your break-even daily? When you do, you make real time calculated decisions. Not all price-shopping customers are created equal. Some are seeking the lowest price, some are seeking value, some are testing you and some are using you.

Ask yourself: Is this customer a potential long-term customer or a one-time price shopper? Will this customer give me referrals? Are they just using me to get a bid to use against someone else? How interested are they in my service? Could I reduce or take away some of my value and lower my price? Do they keep coming back?  Do they have strong interest? Can I hold my price? 

Can I give some value that doesn’t cost me anything? What can I give that my competitor cannot? Why am I different? Have I made that difference clear to the customer?

Not all sales are created equal. Are there accessories or add-ons that will be included that are not margin sensitive? Once a customer decides, accessories are easier to sell and price becomes less of an issue.

Here are more questions to ask yourself: What are the potential add-ons? (Upgraded cushion, trim, listellos, area rugs, etc.) Can I add in maintenance products, such as spot removers, cleaners, cloths, walk-off mats, etc. as part of the sale? Can I sell maintenance programs or warranties? Can I rent tools for the do-it-yourselfer?

Not all products are created equal. Some products are special order, some you may take from inventory, and others may be available to you as a closeout.

Other questions to consider: Is this old inventory that would free up cash? Should I discount this inventory to free cash up to buy better selling product? Would a better price be available if I asked my rep? Is this product available as a “special” product? How much would I save if I bought it in volume?

Not all customers pay the same. Accepting a deal for a lower price could be a very bad decision depending how the customer pays the bill. Ask yourself these questions:

How will the customer pay? Can I ask for 100% upfront or a larger deposit? What is the customer’s track record? Do they want the lowest price and do they pay late? What will this deal do to my accounts receivable?

There are no firm answers to this dilemma. But there are smart, calculated questions. I believe your successes in life will be determined by the questions you ask. In any situation, in any opportunity, and in any sale, the answers will be different. With those answers, we can decide when to play, hold, fold, walk away or run.