People Get What They’re Willing to Pay For
It was a pleasant dinner party, hosted by the president of the company that employed my wife. He had an elegant home in a plush Chicago suburb. But the backyard was not very spacious, so the 50 or so guests mingled elbow-to-elbow on a sultry July evening while enjoying outdoor cocktails. This led to more interaction than you normally find at this kind of business-social event. Instead of spending all their time chatting with their spouse and one or two of the closest co-workers, people found themselves packed so tightly they would have been embarrassed not to make conversation with folks they were close enough to kiss.
So it occurred that at one point about 10 of us were crowded in a somewhat circular array when the chit-chat turned to a subject everyone in this affluent crowd could identify with — remodeling projects. One after another told a contractor horror story.
One lady’s tale was of a sloppy painter who used the underside of new carpeting to blot up spills. Everyone else thought the story a bit funny, but the teller never smiled. Then there was the couple who were left cold by their new hot tub that took forever to fill because, I surmised, the installer connected it to the existing 1/2-inch supply piping. A professional plumber worthy of the term would know to increase the pipe size. Of course, that would add quite a bit to the cost of the project, so whether it was an amateur who didn’t know any better or a pro who just decided to keep his mouth shut out of fear of a sticker shock reaction, a customer ended up poorly served.
Gripes abounded of escalating costs, of promises broken, of phone calls not returned. Someone said in an exasperated tone, “What is it with all these contractors?”
The wailing and gnashing grew continuously meaner and more unreasonable. Finally, it reached a point where I felt compelled to share my hard-won wisdom, as well as stick up for my trade buddies. Here, approximately, is what I had to say.
Cause and Effect“I’ve heard enough. I write for contractor magazines and have visited hundreds of construction and remodeling jobs. Let me tell you what caused all of your bad experiences.
“Competitive bidding, that’s what.
“Everybody wants a first class job, but nobody wants to pay a first class price. Instead, everyone blindly follows that silly old rule about getting at least three quotes, and taking the one in the middle.” (Several heads nodded.)
“That’s bullbleep. Contractors have learned that the only way they can win a job is to quote a price so low they can’t possibly make any money. So that’s what they do. Then once they land the job, they cut corners or pile on extras in order to make a buck. Actually, they wait for the customer to pile on extras and make changes, which happens on virtually every job. Then they make their profit doing what the customer wants.
“If you insist on taking bids, don’t take the one in the middle like everyone tells you to do. Most of the time you’d be better off going with the highest bidder. He’s probably the only one who’s built enough into the price to do the job right. You’d also be wise to invest an extra $500 to have an architect or interior designer draw up a set of plans so that everyone is bidding apples to apples.
“Better yet, don’t even shop for quotes. Ask around, do some background checking, inspect some projects, but find yourself a contractor you have confidence in and let him name his price. If it’s more than you can pay, ask what can be done to bring it down. But don’t expect someone else to give you the same job at a lower price and then expect top-notch quality.
“You’ve all heard the expression, ‘You get what you pay for.’ None of you would go shopping for fine china in a bargain basement store. But that’s what everyone seems to do when it comes to home remodeling.
“I know a lot of contractors, and as a group they are no more dishonest or incompetent than any other businessmen. It’s just that competitive bidding forces them to play games even when they want to do right by the customer.”
Class BigotryI felt like saying more. Virtually everyone present had a six-figure income, and I sized up many of them as class bigots. You see, most white-collar professionals don’t think twice when people just like themselves charge an arm and a leg. They pay without complaint ridiculous amounts for legal and consulting fees, for pet doctors, for their kids’ dance lessons. They only get their dander up when it comes time to pay the plumber, the auto repairman and other blue collar mopes. I was about to bring this up but reminded myself that my wife had to work with these people, so I bit my tongue.
Besides, class bigotry works in both directions. White-collar professionals have a way of making their services seem more valuable than they really are through salesmanship and image manipulation. For instance, I’ve met many people with ordinary skills and knowledge who have never run a successful business, but they are able to charge more than $100 an hour for their services simply by talking a good game and labeling themselves a “consultant.” Most people from blue-collar backgrounds shy away from such phoniness, and they think selling is undignified. The typical contractor’s sales pitch amounts to: “Here’s my price, this is what you’ll get, now leave me alone to do my work.” That may be good for self-respect, but it doesn’t gain the respect of people in the market for your services.
And that is why construction contractors are terribly undervalued in the eyes of the public. A large share of the blame lays with their unwillingness or inability to market themselves in a business-like way.
Walk the Walk, Talk the TalkMarketing is a foreign concept to most contractors. They tend to equate it with advertising and selling. These are components of marketing, but not the entire package.
What marketing really amounts to is giving people a reason a to business with you — beyond having the lowest price. Marketing is thinking as your customers do, it’s understanding and anticipating their needs. Think about that a moment. Ask yourself why anyone who doesn’t know you might choose to do business with you when there are hundreds of other firms just like yours to choose from.
Most of you would answer, “We do quality work.” That’s not enough.
Quality work will not sell itself. The average person can’t distinguish between crap and craftsmanship until the job is done, and then it’s too late. You have to pre-sell people on the value and benefits of doing business with you. You have to explain why you are worth as much as you want to get paid. You must make people want to do business with you even before they know why. Like it or not, this requires selling and schmoozing skills. Like it or not, you need to learn to talk the talk as well as walk the walk.
If it sounds like I’m telling you to act like a bunch of phonies, that’s not correct either. Phonies don’t last long in the business world. You have to walk the walk as well as talk the talk. It’s a matter of doing quality work, but also knowing how to convince people of that, and making them understand that the work you do can’t be done by just anyone.
You need to promote the same kind of respect for craftsmanship training as people give to the degrees you see framed on the walls in the offices of doctors, lawyers and other white-collar professionals. You need to be able to negotiate your way into jobs rather than scrounge for work with 15 to 20 bidders. You need to establish yourself as a pro’s pro who’s the first one called when a tough or critical job arises, and maybe the last one to get a look at the job if it does go out to bid.
It’s the only way to get beyond the realm of competitive bidding and into a world where a little sanity prevails.