Us and Them
Here are some other ways to set your company apart from low-bidding contractors.
Use your Web site to educate clients. Danny Feig-Sandoval of Small Carpenters at Large, in Atlanta, uses his company’s Web site as an educational tool. “We steer clients to our Web site, where we explain some of the issues they can face if they choose a lower bid.” He includes links to industry associations, such as the National Association of the Remodeling Industry, as well as to the Atlanta Better Business Bureau.
Lauten Construction’s Web site is part of a larger marketing program that includes truck and jobsite signs, and is meant to educate the community about the firm’s professional services. “People who have seen our Web site know how we operate. We do not get clients who randomly choose us out of a phone book,” says Robert Lauten, president.
Spooner, Wis., remodeler Craig Tice uses his company Web site and other types of technology to woo clients, most of whom live several hours away from the vacation area in which he works. Clients use Tice Construction’s Web site to review their project schedule and in-progress photos. “Most local guys do not even have computers,” Tice says.
Ask potential clients to do their homework. Ed Cholfin at Advanced Kitchens, Marietta, Ga., tells clients to look for certified, licensed contractors who are members of industry associations. Brian Goulet of Inland Bath & Shower, Richland, Wash., tells customers to ask for and call at least three references. “That is the number-one factor to determine if a contractor is for real. We keep a current list of at least 25 people,” he says. He also tells customers to question any contractor who can begin a job right away, and to call the supplier they work with for insight.
Darrell Thompson of Mr. D’s Construction, in Lake Tapps, Wash., directs all his clients to the permit and licensing Web site for Washington state where they can look up claims, insurance, and license status for his company, as well as that of his competitors. “I know my record is clean so it can’t hurt me, but maybe it can hurt [my competitors], especially if there is no record of them at all,” he says. Thompson also warns clients that they have no recourse if they use an uninsured contractor.
Stand your ground on pricing. Steve St. Onge of Rhode Island Kitchen and Bath Center, West Warwick, R.I., says contractors should have confidence in their pricing. He knows his margins and feels he has a fair pricing structure due to diligent cost analysis. “If a client says our price is too high, we offer to change the parameters of the job to fit their original budget,” he says. Cholfin says some potential customers are so price conscious that they won’t be convinced of the value of your services.
Communicate any warranties. Rick Livingood of Livingood Construction, in Claysville, Pa., uses quality materials with manufacturer warranties and offers a one-year labor warranty. He says low-bidding contractors use lesser-quality materials. “They can’t cut costs anywhere else except for materials,” Livingood says.
Bill Peterson of Add-More Construction, North Brookfield, Mass., offers a one-year warranty, but also will fix any problems beyond that year if he believes it is the fault of his company. “I’ve patched roofs 10 years after they were done,” Peterson says. “That is what has sustained us when times are tough.”
Use advertising and marketing. Advertising can build your company’s professional reputation. Goulet says consistency is the key.“I do not do more in slow times or busy times. I have a monthly budget for television ads,” he says. “I notice that as we’ve become more consistent about advertising, our backlog has stayed steady,” Goulet says.
Ask for an opportunity to explain the difference in bid amounts. Peterson asks potential clients to contact him before making a decision.“If they call me back and they have other proposals in hand, I can help them compare apples to apples,” he says. For example, if another contractor has bid inexpensive windows, Peterson offers to change his bid to reflect those types of windows. “This gets them thinking about quality and value.”
If Tim Cross does not win a bid, he asks clients about the bid and contractor they chose and uses that opportunity to communicate with the client about the benefits of hiring his company. When bidding against quality professional builders, the client’s decision is usually based on the personality of that remodeler and timing or scheduling. If the client makes their decision based on price, he says, they’re not a good fit as a client. “If they are willing to go this route with a ridiculously low bid, maybe they can’t afford to do the work,” Cross says.