In 2009, we have lost two significant window replacement jobs to a competitor who distributes Loewen, a Canadian manufacturer of high quality windows and doors. Our local competitor here in Denver is one of the best window replacement companies in the area; I have met the owner and admire the company he has built.
We lost the first job because Marvin Windows, our primary window line and a worthy equal to Loewen, would not build a configuration that was deemed to be ill-advised from a structural engineering point of view. We share this information with the builder but did not imply, or use as a sales tool, that Loewen’s statement that it would build the configuration was an explicit structural compromise. We were told this “difference” was a key architectural feature of the home and the reason we lost. Once the deal was signed and the window and door order was placed with Loewen, it turned out that Loewen would not build the configuration either but instead substituted the alternative configuration Marvin has proposed.
Our second loss just happened. Normally Marvin and Loewen are priced in a relatively narrow band with Marvin higher at times and Loewen at others. In this case, the Marvin quote was 65% higher. Some of this was driven by a few very tall doors where Marvin builds a more substantial system with higher wind and water infiltration protection. Another difference was the provision by Loewen of push out casement operation at the same price as crank out casements, contrary to the current pricing models by every other manufacturer. Frankly these differences don’t explain the huge price gap. In our case, our gross margin is substantively less than the top line price difference!
In both cases, we thanked the builders for giving us an opportunity to bid the work and asked for the opportunity to visit the jobsite and take a first hand look at the winning product. More importantly, I informed our sales person and our entire sales staff of how proud I was/am of them and our sales process. We work with Marvin to ensure that anything we quote we can deliver. We never use price to “buy” business. Our customers know that our first price is our last, and that we price to fund our service model and to take care of our employees.
While I hate to lose, our successful batting average has me comfortably and confidently staying the course.