How do you compete, when quality isn't a requirement? - Contractor Talk - Professional Construction and Remodeling Forum

FthillGuy · 09-12-2009, 09:48 AM

Hey everyone. Iv'e been hanging out here for awhile, and have introduced myself at one point. I thought I might try to get some insight or feedback from other members on something I've been struggling with for years:

A large portion of our work comes as a result of real estate transactions, where repairs must be made to the home as a result of inspections, etc. Most of the time, these repairs are paid for out of the seller's escrow funds. It didn't take me long to figure out how difficult it is, if not impossible, to sell QUALITY in these instances. Since the seller of the property isn't going to realize the benefits of quality work, they could care less, and the result is often GO WITH THE CHEAPEST BID!

One of the ways we have tried to overcome this, is by building a reputation of excellent customer service, which I believe has resulted in continued growth of our business over the years. The problem remains though...How do we compete with the low-ballers, when the people who are paying, don't care about the quality? The problem is being exacerbated by the recent boom of low-ball repair companies.....

Thanks for your thoughts.

Mike Finley · 09-12-2009, 10:04 AM

You be the biggest baddest low baller on the block.

What do you think the tactics are that Wal-mart uses to competes with Nordstrom?

That's a trick question, cause they don't try to compete with Nordstrom!

If your business is based on competing with a bunch of pigs in a muddy pen, stop pretending it's not and embrace the mud and be the dirtiest pig in the pen.

woodchuck2 · 09-12-2009, 10:46 AM

How do you compete, when quality isn't a requirement?

Answer is simple, you dont. At least if your reputation and profit mean anything to you. Anyone can polish a turd for next to nothing, but do want to go home smelling like crap with an empty pocket?

cueball707 · 09-12-2009, 11:00 AM

I am in the same situation as you and I do get alot of business from real estate transactions. I don't try to compete. I look at it like this - I someone is willing to do the work for dirt cheap and wait 30-90 days to get paid , let them. Its not worth your time .

Also, I've stayed consistant with my bids and I still get the jobs. (Not everyone, but at least 1/4) If you win a realtor over, they will find a way to use you. Most of the jobs that need to be done are under $2500 and in my area, they only need one bid for those.

Just charge what you need to charge for the jobs. Your situation is unique. You have different overhead requirement etc..

Good luck and hang in there.

Framer53 · 09-12-2009, 11:46 AM

Quote:

Originally Posted by Mike Finley

You be the biggest baddest low baller on the block.

What do you think the tactics are that Wal-mart uses to competes with Nordstrom?

That's a trick question, cause they don't try to compete with Nordstrom!

If your business is based on competing with a bunch of pigs in a muddy pen, stop pretending it's not and embrace the mud and be the dirtiest pig in the pen.

Even the dirtiest pig has to perform to some standard

Mike Finley · 09-12-2009, 11:51 AM

Yes, the other pigs in the pen!

jptyk · 09-12-2009, 01:04 PM

I agree with all of these answers, so far. You don't compete with low-ballers, the jobs aren't worth it, but if you do you will become one of the pigs.

Years ago when I was starting out with my own business and doing estimates I was hungry for work, so I would re-work and re-work my estimates to bring them lower to be sure I got the job. I jokingly say now that I used to sharpen my pencil and lower my numbers to the point where I would be sure to lose money and then I'd give them my estimate and do the job. Unfortunately, that wasn't too far from the truth in some cases.

It took a while (years really for me) to realize it costs me X amount of $ to do a job, X amount of $ to do it well, and X amount of $ left over at the end of the job to make a profit. If I can't get all three of those $$$, then why I am in business for myself, taking all the risks and living with all the headaches. I may as well go to work for someone else, get a paycheck, go home and forget work until the next morning.

Like cueball, I do some work for realtors, but I keep my prices the same. I have one realtor I've worked with for 10 years, but I lose a lot of other work for the folks looking for the quick and cheap. I don't envy you if most of your jobs come from this type of work. Good Luck!