WHERE’S THE INCENTIVE? Contractors note that while the Internet has exposed home improvement pricing practices to scrutiny, it has also expanded homeowners’ understanding about why certain projects or services cost what they do. “They know we’re not ripping them off, but adding value,” says Ferguson of K-Designers.
Casey notices that in cases where leads are generated by the company Web site, prospects have usually done some research. Those prospects, he says, typically ask more pointed questions “about who does your work and about warranties. And they want some guarantee that you’re going to be around to finish the job.”
To better appreciate its customers’ needs, Home Town Restyling’s sales reps survey homeowners to find out, for example, how long they intend to stay in their homes, what kind of products they’re looking for, and what criteria they use to choose a home improvement company. “We tell people who are just looking for price that we’re probably not right for them,” Casey says. “When we go into a home, we ask the customer, ‘If I can convince you that we have a better staff, offer a better product, and provide better service, would you believe me if I said we were the lowest priced, too?’ ”
PRODUCT, PRICE, AND SERVICE That’s not to say that price has lost its place. The Big Drop may be old-school, but home improvement companies must be competitive, Casey says. If anything, the Internet raises the bar to where prospects now demand the best products, service, and low price before they sign. What companies have found is that if everything else is impressive, then a small discount for sparing the company the cost of a second visit can be a strong incentive.
Fick Bros. Roofing Co. prices jobs “to the penny,” Fick says, so that salespeople can showcase the company’s estimating process to justify a job’s costs. But the company also offers a “sales cost savings” program that gives customers 10% off up to $1,000 if they sign that night.
“One of the things the Internet has done has been to drive down [customers’] price perception,” says Ladley-Love, who instructs the company’s 25 salespeople to be “as transparent as possible” about pricing, which, she says, “is the only objection we get to a sale.” The composite windows that RBA sells are at the upper end of the replacement window category, and salespeople for RBA Colorado give homeowners three options to buy, including a “preferred customer” option that knocks off $275 per opening if the customer signs that night and locks in prices for five years if the contract closes in five days.
THE RATING GAME To assure homeowners about its reliability and performance, RBA Colorado regularly directs prospects to the Web site of the local Better Business Bureau, of which it is a member. Ladley-Love says that her salespeople also get occasional questions from prospects about why Consumer Reports doesn’t include Renewal in its rankings. (Consumer Reports doesn’t rate installation services, she explains.)
Other contractors, however, express ambivalence about the myriad online consumer forums that rate home improvement companies on various metrics. The best known of these is Angie’s List, which has 650,000 members encouraged to evaluate providers of 300 different types of services by filing reports (see “The ‘A’ List,” on page 25 of this issue). Levine, for one, calls Angie’s List “fantastic,” and notes that Legacy Remodeling won an award from the List last year for the Pittsburgh market.
But some feel that Internet forums can be a breeding ground for falsehoods, with competitors posting baseless negative evaluations and remarks. “You find all kinds of ridiculous stuff” on the site of the Better Business Bureau, says Casey, who notes that the BBB, unlike Angie’s List, doesn’t allow contractors to reply.
Kuplicki says that Alure Home Improvements has its own internal rating system that requires a response to all customer complaints within 24 hours. What especially bugs him is when homeowners post negative ratings on consumer forums for minor, purely subjective complaints such as “because they don’t like our prices or we don’t service their area.”
To defuse negative ratings, Alure salespeople will ask the homeowner to name his or her favorite restaurant. “We’ll go online and show them all the negative reviews, and the positive ones. Then we’ll ask, ‘Is that going to make you not eat there again?’” But what Kuplicki and other contractors lose sleep over is their fear that bad reviews, along with the blizzard of other information on the Internet, might be keeping homeowners from calling their companies in the first place. —John Caulfield is a freelance writer and editor based in New Jersey.