Thursday, December 20, 2012

Wednesday, December 19, 2012

Tuesday, December 18, 2012

Putting Prices On Bids

You will either like this or not. It deals with the problem of clients lowering their guest count guarantees as the event day gets closer. When they booked and gave a deposit they may have guaranteed 135 guests, but one week before the event date (sometimes only a day ahead) they call and drop the guarantee by 45 guests!

So, my suggestion is to use the "three price upfront" solution. In writing, on the bid/proposal the prospect receives, the caterer gives a solution upfront (before they sign the contract) of what the final price will be based on the final number of guests in their final guarantee.

For example: If the client's first guarantee is 135 guests, then the three price solutions below are placed on the bid/proposal as you see it below. The first price solution of $38.60 per guest is created by adding ten guests more and ten guests less to the client's 135 guarantee. The $36.25 price solution is offered to show the client that the caterer will "happily" lower the final price if the final guarantee is over 145 guests.

Lastly, and the reason we are doing this, a price solution is given of $42.30 if the final guest count drops below 125 guests. In this way the caterer creates some extra dollars to make up for the last minute loss of profit from the last minute guarantee lowering by the client.The $450, or more, added volume helps sooth the unhappiness of the caterer.

Here's how it would look on the bid/proposal:

38.60 per guest for 125 to 145 Guests
36.25 per guest for 146 or more Guests
42.30 per guest for fewer than 125 Guests

Why not test this concept to see if it works for you?

Monday, December 17, 2012

Business Builder That Works Even Though It Is Scary!

Here’s an idea that is not for the faint of heart. I don’t expect most caterers to either embrace it or even “test” it to see if it increases business. That’s OK. My task, however, is to continually present “cutting-edge” ideas that at first often appear to be “silly” or “impractical” to some caterers.

That being said, I have done this myself when I was a caterer and several of my consulting clients have tried it with great success. It has backfired only once that I know of. On the other hand, this bold idea has secured sales that would have gone elsewhere. Additionally, I have found that prospects will pay a higher price for their catering to get the guaranteed refund opportunity.

The copy below is sent to a person who has agreed to become a client for signature and a deposit, or it is just signed at the end of a “live” sales presentation just before the prospect gives you a deposit payment.

Enclosed please find our payment of $8,500 to confirm our wish for ABC Catering to provide food, staff, equipment and other services for our event on Monday, (DATE) at Grace Temple. This payment will be refunded in full, with no questions asked, if our plans change and if we wish to cancel our catering anytime preceding 60 days of (DATE). Refunds will not be given is cancellation comes with less than 60 days of the event date. The balance will be due in full at the conclusion of the event on (DATE).

Mr. Jim Doe