The Green Energy Grant has been announced with out facts leaving consumers prey to false home improvement discounts.The 'sharks are circling' sensing prey as confusion about the new green energy deal leaves consumers confused.
What type of company uses false discounts?
In general, the purpose of this website is to warn customers of the tactics used by commission-motivated salespeople who represent the larger national companies. Smaller local companies do not tend to use high-pressure sales tactics and false discounts because they do not have the ‘know, like and trust’ status to get away with it. Obviously there are cowboy tradespeople so take your time to consider your supplier and do not give in to any pressure tactics that encourage a decision before you are comfortable.
This information doesn’t just apply to glazing companies such as Anglian, Safestyle, Everest and many others. It also applies to almost all other home improvement companies that rely on commission only or commission motivated salespeople.
Sharps, My Fitted Bedroom and Hammonds for fitted bedrooms.
Wren and Magnet for kitchens along with Homebase, B&Q and Wickes.
This type of marketing is driven by consumers. It gives the biggest response. It is now part of our culture but that doesn’t mean that it is right.
‘I have written ‘salesperson’ as a description suitable for male and female but where it is necessary to write ‘he’ or ‘she’, I have chosen to write ‘he’ rather than the clumsy use of both. Males still dominate the sales industry. It does not imply that women can be trusted more than men. That is not the case’.
High discounts are false and rely on artificially inflated list prices.
You may have responded to an advertisement promising a large discount. The most popular discount advertised is 50%. Half price always sounds attractive. Recently, discounts of 70% and 80% have also been seen. Sometimes they say 50% off with a further 20%. Regardless of what it says, the original price has been artificially inflated to allow for the discount.
In addition to that discount, the salesperson will have further discounts available to encourage a purchase at the first meeting.
For a small business to make a profit, they must add a percentage to the buying price. In my own interiors business, I doubled the trade price and added installation charges. A genuine half-price sale would not have been possible as it would have reduced the profit margin to such an extent that I would have lost money.
To promote a sale offering a discount of 50%, I would have needed to double the normal retail price first. Most small companies operate in a similar way. A genuine sale in a small company could only consist of selling stock that has not sold and needs to be shifted, at a loss if necessary.
Large companies who offer big sales discounts must calculate at least four times the trade price or cost of manufacture so that they can then reduce the price by half and still operate at their profit margins.
These discounts of 30%, 40%, 50%, 60% and upwards are false discounts, made possible by an artificially inflated list price.
The New Green Deal Vouchers create a new opportunity for a false discount.
The early announcement of the new vouchers without any clear facts has led to some customers cancelling or postponing orders for new windows. Some companies are claiming to have the vouchers. To enable them to say that they can give you a voucher for 2/3rds off they must inflate the price to give you the 66% discount.
There are also companies who have advertised on their website that they can offer the vouchers. At this stage, nobody has been appointed and there has been no clarification regarding which suppliers will be authorised.
If you see a button inviting you to click to apply, this is only a method of collecting your details. One such company is Help to Buy Windows. This is a lead generation company and does not have access to government grants.
Another is Everest North East Ltd. This company has been reported this week for false information on its website.
If you are going to wait, then wait for the official government advice and do not be deterred by companies who offer massive discounts instead. The genuine vouchers will be on the final price, not on the list price.
Is Your Quote Valid for Six Months?
Your buying cycle often starts with the no-pressure promise of a quote that will last six months. This is true. They will give you a quote that will last six months. However, it may not be the quote that is given at the appointment.
Based on the information that the customer has given them, the salesperson will deliver a price that is a little over what he thinks the customer will pay.
This leaves enough room for negotiation. The difficulty for you is knowing where the calculation was started. You do not know if the price is inflated before removing discounts. (Remember that this is not necessarily how independent companies operate.)
You will be told that the best deals are available there and then. That price does not hold for six months. You may first be ‘encouraged’ to buy at the first appointment. If you don’t buy it then, you will be chased and possibly offered further discounts.
Buyer psychology is complex and decisions are made largely with the sub-conscious. Most people are not aware of the way that they are being subtly manipulated based on fear of loss. Without that, these type of sales tactics couldn’t work.
Salespeople always want the deal signed on the day.
From the moment the salesperson enters the door, customers are being set up for closing the deal.
In order for you to believe that the discounts are credible, salespeople have a range of ‘discounts’ available to them on top of what has been advertised. They will use whatever they have and adapt depending on your negotiation skills.
‘Good’ salespeople will not leave the house until they have tried every possible closing tactic, and brought the price down to its absolute lowest.
A sales strategy using home improvement discounts doesn’t work on its own. It relies on the changing emotional state of the customer.
Buyer psychology is complex and decisions are made largely with the sub-conscious. You will not be aware of the way that you are being manipulated based on fear of loss. Without that, these type of sales tactics couldn’t work.
A major purchase starts with rational justification – windows may be old and let out heat, a conservatory for extra space, doors hang off in the kitchen and a fitted bedroom may be the most effective way to gain extra storage. They are expensive and involve upheaval so are rarely bought on impulse. A customer cannot enjoy gratification of the purchase immediately, as there is a wait of several weeks for the item to be delivered. Once the process is started, emotional drivers become involved and the customer starts to think not only about how well the product will work but how it will look, and enhance the home and the life of their family.
The skilled salesperson asks questions to reveal the emotional drivers. He understands what is important to the buyer; price, peace of mind, guarantees, the safety of the family, and other aspects that the customer may not consider until the salesperson raises the question. The presentation will then be tailored to include the relevant points.
The table below show the factors involved in making a decision. Consumers often sub-consciously sacrifice practical factors for emotional ones.
Salespeople who start at a high price even after the advertised discount has been applied must drop the price and still appear credible.
It isn’t easy to drop the price when it is already heavily discounted and still appear credible. This is not easy to do because it is not credible.
Learning the craft of negotiation is the single biggest difference in success or failure for the salesperson. Do you honestly believe them when they tell you it is half price at £15,000 then still drop another £5,000? With hindsight, probably not, but when you are caught up in the moment, your brain chemistry is making you excited and you want to buy the product. You believe anything if it is made affordable for you, and feel you are given a good deal.
Some customers are aware that it is all hype. Others become upset at these tactics and can turn nasty if they feel they are being conned. The salesperson needs to be careful to appear genuine. Play the game if it gets the deal that you want, as long as you know the reality, and are manipulating the salesperson and not the other way around.
These false discounts are available. What does not exist is the reasons for them. Depending on what has been decided as a starting price you may be told that certain discounts have already been applied to show ‘goodwill’ and to gain trust. Others are used after the salesperson has assured you that he has given you the best possible price and you still have not agreed to go ahead.
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