Licenses. Some states — Florida and New Jersey, for instance — require general or home improvement contractors to be licensed. Many do not. Some, such as Massachusetts and Rhode Island, require contractors to register. To register as a contractor in Rhode Island, for example, costs $120 per year and requires that the business maintain $500,000 in liability insurance and workers’ compensation if it has employees. In Rhode Island, unregistered contractors can be fined up to the amount of the contract. Twenty have been arrested since last June. “We provide all our clients with our registration card,” Ladouceur says. “We have a two-page brochure with job photos and accolades.”
Insurances. Like many home improvement companies, StormTite also supplies prospects with a copy of the company’s insurance certificate. Many companies include copies of these documents in their pitch book. Homeowners may or may not know that if something happens to a worker on their property and the contractor they employ has no liability or workers’ comp, they’re responsible and could be liable. Many mistakenly believe that such mishaps are covered by their homeowner’s insurance. Explain this thoroughly and show your prospect copies of your insurance certificates.
Built to code. Will the job that the low-ball contractor proposes to do be built to code? “We always bring up how we’re going to build it,” Nicholson says. “We go right into the details in our specifications.” Bypassing local building codes to save dollars could mean an unsafe job, and — if discovered by local permit inspectors — a job that might have to be pulled down and rebuilt after the low-ball contractor is long gone. The message: This is what it takes to do it right.
“The building inspector is there to protect homeowners against contractors who aren’t doing it right,” Nicholson says. “When a contractor is doing a job without a permit, he isn’t doing the homeowner a favor, he is putting him at risk. Pick a township in which you do business,” he suggests. “Take in their specifications and show [the prospect] how you’ll surpass them.”
Total breakdown. Do homeowners have any idea what really goes into a home improvement job? Usually not. Tropical Roofing can show them by providing an item-for-item breakdown in the form of a pie chart, included in the company’s presentation book. The chart shows costs as a percentage of the job. “It’s the extra things our company offers that cost that extra money,” Delia points out. Reps go over each item, such as service calls. “We can dispatch someone because the homeowner paid for that,” is how it’s explained to homeowners, Delia says. “Rather than pass the buck or deny responsibility.”
Overhead as assurance. Your company’s ability to deliver a quality job, with warranties and customer after-care, results from the capital, human and otherwise, you’ve accumulated during your years in business.
Low-ball contractors will tell prospects that this is a reason not to use your company. Ladouceur has a comeback. “Joe’s Roofing says he’s cheaper than me because I have five times the overhead he does,” the Rhode Island contractor says. “My response to such statements is this: ‘Do you consider my overhead an asset to you or a liability? Are my tools, trucks, showroom, and company headquarters an asset or a liability? We do many more roofs in a year than Joe’s Roofing, and my overhead per client costs are lower. And now you’re protected. My overhead is your assurance, Mr. and Mrs. Homeowner.’” An assurance, he says, that the job will be done the right way and that follow-up is available, if needed.
Picture it. Your company has done good work and has a lot of satisfied clients to prove it. “You can’t explain it to people unless you have photographs,” Nicholson says. In addition, he advises that you make sure those photographs are actual pictures of your company’s work.
Nicholson says that many times he has presented to homeowners who have show him competitive bids that included photos — downloaded off the Internet — of his company’s work, with the implication that it was theirs. Tacky? Yes. But not illegal. “When we go in, we make clear that these are our photos and these are our jobs,” Nicholson says. “You need the finished product with an address on it.”
Welcome to the showroom. Does your company have a showroom? You can be pretty sure that low-ball operators don’t. Make a point of inviting the prospect to visit it.
The showroom “tells [prospects] that we’re not going anywhere,” says Kevin Carmen, vice president of marketing for American Design and Build, in Bel Air, Md. The company invites prospects to its 6,000-square-foot landscaped showroom that features koi ponds as well as windows, entry doors, and a sunroom with a wide-screen TV and rattan furniture. “You could show them sunrooms on a laptop,” Carmen says. “But sometimes customers want to see more than a picture or a DVD.”
Outside validation. All the way over in a corner of that showroom, American Design and Build displays plaques, awards, and certificates, including the 2001 Torch Award it won for best business ethics practices from the local Better Business Bureau (BBB), and the fact that it was voted Best in Baltimore by Baltimore magazine in 2003.
If you belong to the BBB, point out what it takes to be a member, and make that part of your presentation. Membership in organizations such as the National Association for the Remodeling Industry (NARI) and the National Roofing Contractors Association (NRCA) also count. Industry involvement and association membership speak to quality, fairness, and ethics. And don’t forget: When it comes to outside validation, past customers are as good as it gets.
Warranties and guarantees. The written assurance that you’ll stand by the work is, for some homeowners, powerful and persuasive. It says you’ll put your money where your mouth is. Southern Home Systems, for example, offers a lifetime limited warranty on the windows it installs, “with free service for as long as they own the home,” Butterfield says.
Tropical Roofing, in Florida, has a dual warranty: In addition to the manufacturer’s warranty, the company offers its own lifetime warranty on labor. “Part of our presentation is going through our warranty word for word,” Delia says. “Having that warranty gives people comfort.” Consumers know that all bets are off when it comes to warranties in severe weather conditions.
No surprises. Low-ball contractors typically skimp on labor. They also cut corners by using inferior materials. Tropical Roofing, for instance, spec’d a job at 60 squares of tile, while a low-ball competitor spec’d the same job at 35 squares, charged $15,000 less, then walked away while the job was in progress.
Sometimes they won’t even bother to describe the scope of work in writing but will simply drop a card or envelope with a price on it through the homeowner’s mail slot.
Other times the scope of work is deliberately falsified, for example, in the case of the roofing company that explains its low price as the result of its ability to roof over existing plywood, then comes back to the homeowner in the middle of the job insisting that the roof needs new decking.
For reputable contractors, a clear and detailed scope of work — both oral and in writing — provides prospects with rock-solid reassurance.
In presenting siding jobs, for instance, Brown says he “starts from the beginning” and walks homeowners through the entire process explaining how the company checks to make sure the wood on the house is good; that they are careful to tape all the seams, put J blocks where they should go, and so on. Walking customers through the job, he says, is the most effective way to counter low-ball competition.
