Others maintain that price shoppers — who buy the cheapest job, regardless of who does it or how well — are fewer in number. “There’s 15% at the top who don’t worry about price,” says Pat Nicholson, owner of Deckmasters Technologies, a deck-building franchise headquartered in Pittsburgh. “Then there’s the 15% who are bottom-feeders. They’ll get a dozen estimates and go with whoever’s the cheapest.” What that leaves, he says, is “the middle-buying public in between.”
Lead sources can steer you to one group or the other. Price shoppers often come from the Yellow Pages, direct mail, or Internet lead service leads, even show/event inquiries.
Many prospects intent on going with the lowest bid can be convinced that it’s not in their best interests. What it takes, says well-known home improvement sales consultant and trainer Rick Grosso, is a presentation that builds value and price-conditions the prospect with frequent trial closes to secure agreement.
“The eight or 10 items you offer — your product, your warranty, your installation — sell those items individually,” he advises. “You have to make every feature walk on water and get the customer to commit to that.”
And don’t dodge the subject of low-ball competition. Rather, take it on directly in the course of the appointment so that by the time you present your price, you’ve killed the low-ball alternative. Charlotte, N.C., window contractor Bruce Butterfield points out that many of the low-ball bids that his company, Southern Home Systems, competes with come from windows retailing at less than $200 per opening. What the prospect doesn’t know, Butterfield says, is that that’s a base price, with features such as low-E, argon, grids, etc., charged separately. “The features we offer are primary,” he notes. Selling against low-ball competition “is about training your rep to price condition, to kill the alternative,” Butterfield says.
What Nicholson suggests is that you explain the real reasons for a price discrepancy. “When the owner says: ‘I want an apples-to-apples comparison,’ I say: ‘Stop right there. This is remodeling. There are just too many components. If you just think of the people you’re dealing with, there’s the designer, the production manager, the crew. They’re all completely different from one company to the next. Their attitude, their pride, the way they look at the job, their years of experience, the types of projects they do, whether those are high-, middle-, or low-end.’” Nicholson says he tells prospects up front that if they’re only going to be in the home a year or two and want a low-end product, “then we’re probably not your company.”
AGE OF ENLIGHTENMENT Homeowners often have no clue about the how or why of how a home improvement project is priced. And bet on this: Your low-ball competitor is in no hurry to enlighten them. Because what they don’t know, can hurt them. “The most important thing is that we explain the risks of doing business with a company that doesn’t have workers’ comp or any type of liability insurance,” Delia says. “The education itself gets people thinking, and they realize that there’s a lot more to the project than they thought.”
Among the most potent arguments you can make:
Price vs. cost. Price, Butterfield tells homeowners, is what you pay for a product or service. “Cost is what comes after.
“So I can talk about argon vs. krypton, low-E squared vs. low-E, wrapping of the exterior trim and sills vs. non-wrapping, and that the trim coil capping of existing sills will make painting the outside unnecessary and therefore save in maintenance costs. I try to show the homeowner the difference between price and cost. Will you be paying more to operate it, or is the quality so good that it pays you back to own it?”
The message: It’s better to invest a bit more than you’d planned, to get a quality product installed by a reputable company and not have to worry about repairs or replacement down the road. Emphasize and repeat, Grosso suggests, that yours is initially the higher price, but only initially.
