The year was 1987. Professional designers and builders struggled to make a living, and the residential remodeling and housing markets were headed for another recession. All projects came to a screeching halt and work dried up like a water hole on the plains of the Serengeti.
Also in 1987, the movie “Tin Men” starring Danny Devito, Richard Dreyfus and Barbara Hershey hit theaters. The movie was set in the year 1963, in the world of aluminum siding salesmen. Their desperate attempts at sales provided comic fodder but hit a bit too close to the mark with current-day sales efforts.
Over the past six months, we have seen a dramatic shift in the design/build business model. This shift compromised many of the design/build business systems that were developed and refined over the past 10 years. This shift in thinking has set us back to the year of the tin men.
The new business formula is simple: Low-ball prices to secure the work — keep busy and make little to no money. But it makes no sense. Low-ball pricing means low-ball craftsmanship because there is no money to pay for skilled labor in a shrinking pool of skilled labor. And forget about customer service because there is no money left for the niceties we tried to implement as a staple of our businesses. The corruption in the marketplace is running rampant and it will be here for the foreseeable future. Many talented people closed their doors and were forced out of the industry to look for a different way to make a living.
Building a new design/build business model to fit the economic times is truly a great business challenge. Offering low entry-level services and then nickel-and-diming clients for every extra is simply the way of the tin men.
Do you want to be sold a product in increments, by nickels and dimes? Remember the last time you were audibly exhausted by listening to an unprofessional salesperson? Remember the first eternal sales meeting that wouldn’t end or the iron-clad promises that nothing would go wrong on projects?
Not qualifying your customers upfront will only delay the business discovery process. Those who are unqualified to pay for services over the phone will continue to be unqualified in person.
Selling low-priced services to get your customer to buy more service is a good plan if your services can meet your potential customer’s expectations. Letting a well-trained nurse perform brain surgery may not turn out well for the patient, even though the cost looks good to the insurance company.
Likewise, running numbers based on history is nothing more than an educated guess based on experience. What we know about design/build is that all projects are different and require careful investigation to ensure measurable results.
Giving away your talent, ideas and the shop have never been a good idea in any business. And taking the easy way out has never proven to be a good way to run a business. Making a choice to take the tin men sales approach will be transparent to your new customers. I understand people need to pay bills and put food on the table but at what cost? Your business reputation is everything and is in direct proportion to your perceived value in the marketplace.
You have worked hard to build your company brand and more importantly your business reputation. Acting like a tin man will cause your future customers to form a completely different opinion about you and your company, and add more confusion to your marketplace. Low-balling your goods and services gives the balance of power to consumers who think they are getting a great deal but are unaware of the ordeal they are about to embark on.
OFFERING low entry-level services and then nickel-and-diming clients for every extra is simply the way of the tin men.
In the end, the consumer loses and the builder gains little, if anything. The project will underperform in a short period of time and certainly will not be environmentally friendly. The uncertain economic times have caused unprofessional business behavior to enter the design/build community.
The last thing we need is to expose the design/build industry to the typical tin man’s transparent techniques, behavior and attitudes in desperation to secure future projects. It may work for a short period of time, but in the end it will cause poor business perception.
We need to band together to provide professional services to our clients. Listen to your clients and meet their needs — not yours. Seek to understand — not to be understood.