Remodelers from across the country—and Canada, too—tell me competing on price has been a growing problem for years. When asked in an online poll, “Is competing on price a problem in your area?”, a whopping 82 percent of remodeling-firm executives responded, “Yes.”
Some of you have told me that today there’s no option but to compete on price. This is true in situations wherein clients tell you up front their decision will be made on price and nothing else. It’s difficult to argue your case against clients like these. For every other situation in which clients don’t slam the proverbial door, there are many points of value to talk about, which don’t involve dollar signs. For clients who are smart enough to look for value beyond the bottom line, review the following:
Consultation. You’re their consultant, not just their contractor, and that has value. You can solve their problems rather than sell them products. Offer help with prioritizing: Help them determine their must-haves and would-likes; help with decision making, answering design questions, and advise them where you think money is wisely invested and where it isn’t.
Advise them to decrease the scope of their project. Ask if they’d entertain a smaller project, such as remodeling only two rooms rather than the entire house, for example. Create phases if possible, such as wiring for technology now and installing technology later. Offer good, better and best options on every project. Then ask them if the other bidders are helping them like you are.
Apples to apples. Point out the differences between bids. Discuss specific products (are the faucets of comparable quality); address building materials (cabinetry and flooring); and consider the project scope (are you doing more or less than the competitor).
Intangibles. List the many intangible areas of value you bring to the table, such as loyal tradesmen who have worked with you for X number of years and why that loyalty matters. Explain how you’re supporting in-house skilled trade/design staff vs. subs; review your expertise in specific projects, especially if they’re similar to your clients’ project; and talk about your adequately compensated staff because you understand that happy employees do better work.
Qualifications. Highlight any awards you’ve won; discuss publicity you’ve received, such as magazine articles or website coverage; review professional certifications you’ve earned or continuing education you’ve taken. Explain why all of this has value.
Endorsements. Put potential clients in touch with past clients, and let the past clients do the selling for you. Solicit and share letters from clients, tradesmen and design partners if you have them. Toot your horn.
Explain to your clients why each of these elements has value. Don’t simply call their attention to your value; explain why the value exists and why it’s important to them. Discuss all these different areas of value, and before you know it you won’t be talking about price.
Above all, be positive about yourself and your company rather than being critical of your competitors.
Editorial Director’s Note: Remember to get on the 2011 Top 500 list! Visit QualifiedRemodeler.com and click on the “Get On The List” button to complete your application today.