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Blog: Stop Competing on Price

Are your project estimates being undercut by discount pricing offered by other contractors? I often hear stories about estimates that are not only for less, but they’re also for less than the actual job costs. These discount contractors won’t be in business for long. Their lack of business expertise will take care of itself, and some unsuspecting homeowners are going to get what they paid for. 

To address this, let’s revisit the sales process to see if we can assist homeowners with making the right buying decision. There are ways to respond to low estimates, but they do not involve lowering your prices.

Homeowners have been taught only one way to differentiate contractors—price. It’s our job to move them off price and demonstrate value. 

Here is a simple question: Are all remodelers created equal? If not, then what differentiates them? Do you have any company-related materials that show prospective customers why they should work with you? 

1.    References and testimonials: If you are excellent at what you do, let past customers sing your praises. Let them tell prospective customers how good you are. It’s much better coming from them than it is coming from you.

2.    Completed pictures demonstrate the kind of work you do. Make sure you get a professional photographer to take these pictures and don’t skimp on paying to get them done right. Good photographs demonstrate your past work and also provide future clients with project ideas.

3.    Provide a sample construction schedule. Most homeowners are afraid of projects going past agreed-upon completion dates. Show them a sample schedule that you will provide once their project starts. Address that fear before they even ask about it.

4.    On your first appointment, show them a sample memo form. This is the form I used with customers once a project started. At each homeowner meeting, I would document what was reviewed, what would happen by the next meeting and who was responsible. I made sure to give them a copy. This created a clear paper trail, eliminated confusion and demonstrated my project proficiency. These meeting notes differentiated me from other remodelers.

5.    Project specifications: Show them your project specifications. Let them know this is how you document interior and exterior finishes, and how this eliminates misunderstandings regarding project selections.

6.    Show them a sample change order form. Let them know how a change order works and how you process them. Professionalism speaks volumes.

Homeowners want to know that you are good at what you do. Show them! Show them the professional value and organization you bring to their project. Most homeowners will pay more if they understand what they are paying for.  

Not every homeowner will be impressed with this process. Some won’t want to pay the price for this quality of service. That’s OK. Sometimes the best projects are the ones you don’t get. Let someone else do that job!

——

David Lupberger has been in the remodeling industry for more than 20 years and is author of “Managing the Emotional Homeowner,” “The Remodeler’s Turnkey Program” and “The Home Asset Management Plan.” He can be reached at david@davidlupberger.com or 303-442-3702.

Be sure to join the Lowe’s ProServices LinkedIn Group to read additional content and interact with other Construction/Trade and MRO professionals.

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