Do you build value or compete on price? I know most contractors love to say how they don’t compete on price yet they are the first one to offer a discount or percentage off when Mrs. Jones gives them pushback.
If you really want to be able to improve your bottom line, lead with value first. Show them your work, paint a picture, create some kind of imagery that makes Mrs. Jones go gaga to get you to work on her home…then price is a lot less of an issue.
3 responses to “Build Value or Compete on Price…Pick One”
Great info as ever Darren. You have shown the light at the end of the tunnel, what really needs to be nailed home as well, is that it takes a lot of courage and plenty of conviction to set out your value stall and not to behave like the rest of the competition out there, buckling at the first mention of price.
On TP, we just stick rigidly to high quality, and bend over backwards to offer excellent value, and we won’t buckle on price. Even though we save clients £10’s of 000 by refurbing their kitchen vs replacement, employing one of us is not a cheap as chips option. It can’t be low ball rates, because our service involves a lot of work and we take a lot of care.
As you alluded to, charging less to compete with low ballers means putting in less work, or using cheaper materials, all of which jeopardises the quality and longevity of a job, and we won’t do that.
The thing is, the second the bill has been paid, clients do not remember a juicy price, but if they spot a flaw down the road, they will want it put right because they paid a top professional to do a top professional job. So charge to do it right in the first place, do it right (which a lot of fly-by contractors tend not to know how to do!) and at least in the unlikely event that there is a problem, you won’t be cursing yourself for undercharging AND putting an issue right for nothing!
Pitching on the basis of value takes a lot of nerve, if you have bills to pay, it is harder to stick to your guns, but if you do, the work is there, and it is good work.
“clients do not remember a juicy price, but if they spot a flaw down the road, they will want it put right because they paid a top professional to do a top professional job.”
That is huge Andy! It doesn’t matter what they paid, just that they paid. It is the contractor’s job to convince the client why they are better. The best way I have found to do this is by creating pain. I create pain by making them relive in their minds the last time they decided to buy strictly on price. That usually gets them to consider a higher bid for better work.
Pain will work 🙂 But buying on price seems to be a repeat offender.
We all need that Einstein quote somewhere, which goes along the lines of: If you repeat the same course of action, why would you expect a different outcome.