Pride Of Lower Price?

woodmagman

Why are some so prideful that they are charging less then their compeditors or the "big guys". I can see pride of workmanship, pride of timelines, pride of product, pride of employees.....help me understand.
I have heard it many a times and not quit sure why!

mahlere

good question woodmag...in most professional industries, the better you are, the more you charge...look at lawyers, doctors, etc....

but for some reason, the trades take pride in being the cheapest.

i have the same question, but no answer

POOLMANinCT

I don't think anybody actually takes pride in being cheaper (aside from retailers)

I think they may see their
low price as a selling tool.. and have never really explored the art/science or markwting & sales, and end their day when they leave the job site.. if they were to examine the sales training philosophies.. I'm sure their tune would change..

ray

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Second Look

I completely agree with POOLMANinCT on this. I'll just add that some people feel they really really CAN'T bring themselves to sell. Either they're too shy, it makes them feel "dirty" or whatever...

They could do it, of course, but maybe it's so much easier for them to just charge less. Others may have simpy watched too many Wal-Mart commercials.

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Ed the Roofer

I have found a correlation to the contractor who brags about being the lower, not necessarily lowest price, to be one where the contractor is on the job working either by himself and with a helper or totally by himself.

They just don't get it yet. They have not associated the true costs of running a business and treating their multiple positions as two seperate job functions, both deserving of a fair financial consideration for the time and efferts put forth.

But, from there point of view, since they are working on the job and it usually proceeds much more efficiently and presumably to a higher degree of quality than if employees were to be left alone to do it, the profit margin per job is increased.

It is hard to justify making less money per job, when you are not putting in the 50 % portion of the labor on each job.

The only way I have found to get the point across to these contractors, is to use what someone else here has stated.

How would your business do if you got hit by a car and wee incapacitated for an extended period of time?

Duh! I guess I would be hurting or go out of business! That is what they typically say. This might be the first time that they had to consider that they were not invinsible.

I have a friend whom I am mentoring on trying to get out of that mentallity right now.

Ed

dougchips

At some point cutting corners in life must scare clients. I could be the lowest price in the state if I:
-lived in my trailer
-did not have a family
-ate at food shelters
-did not pay for truck insurance
-used the cheapest materials from the defect racks at depot
-did not pay the state for my license
-did not plan for retirement
-did not go to the dr or dentist (co pays cost $$)

At some point people would have to wonder if I would survive through a job. "Boy Marge, the guy had to push his truck to our house to do the estimate, I wonder if he can repair it in time to do the job".

There are some scary looking contractors out there, I often wonder if they have the balls to ask for a deposit.

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PressurePros

It comes down to insecurity. Not confident in the work they do. Not confident in their ability to ask for a higher price. Afraid that they won't get the work. Afraid people will think badly of them. Afraid of rejection.

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Pressure Washing PA
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MattCoops

Home Depot has a defects rack?

cool

I really have no care in the world that there are ads printed right underneath ours that say "will beat any other price"
We have had other contractors that took our estimate and bid the job for labor and materials what we bid just for labor. And then the customer had nerve to call us back and tell us that another company bid that much lower, and can we beat it. I figure if they can go that low, they really need that job, and are better off getting it.
We also do repair work, and eventually we WILL get that job.
I even had to help a guy that stepped on our toes and needed a hand moving a cast iron tub.
I went out there personally and told him good luck when we were done.

Eventually these are the people that will be calling your company looking for work.
Don't be discouraged by them.
It's just part of the leveling system of economics. Just as we need homeless people to keep a level infrastructure.

As Lowe's offers to "beat the lowest price"
because they grew up knowing they couldn't step above HD

just brush these people off your shoulders and continue your regular sales agenda

there's really nothing you can do about it but laugh

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dougchips

Matt, my point was at what point do ho's draw the line. If everyone provided good quality then I could not sell my product on quality, the industry needs the hacks. Same thing for service, if everyone offered the same level of service we could only sell on price.

Look at gas stations with the exception of NJ, they all sell gas that is about the same quality, none of them offer service, we shop there for two reasons, PRICE and do they have a store that sells good coffee.

For the discount stuff at the home centers you need to ask around. There are times when they mark it down really cheap and times when they do not want markdowns to effect their bottom line. Blowes misordered a few prefinished fiberglass doors for us ($1200 each) and we saw them out front on a sidewalk sale for $200 each.

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Richard

not sure about anyone but myself...but I am satisfied with charging a rate which makes me a good profit. I charge the going rate for my area. I get turned down on account of being too high once in a while. Taking pride that you don't overcharge seems fine to me. Although, it would be flat stupid to take pride in being the cheapest guy around. I've never heard someone brag about that. I'm glad I'm not even close to that rate. I'm also glad I pay for disablity if anything should happen, good money is there.

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slickshift

I would agree

Contractors don't always make the best salesman
Many aren't comfortable with that part of contracting
Using Price To Close helps avoid that "salesman" part

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mahlere

I would also add that many contractors have misconceptions about what they really need to charge, or what other companies are really charging. Most contractors are pretty secretive and really won't share information with their "competitors" So it kind of leaves everyone in the area guessing and trying to out think the other guys. It's vicious.

Double-A

If you wonder how these folks take pride in asking the lowest price, just ask yourself, "When was the last time I didn't buy on price, but on service and quality?"

If you can't answer that question, then perhaps your overdue for a price hike. If you can answer that question, then you're on the road to recovery.

If you can't remember when the last time was, perhaps you'll make a good profit this year.

In my mind its simple; folks don't like to be hypocritical. How can they sell on price when they don't buy on price? I think once the seed is planted, its hard to sow a new crop, so folks do what they are most comfortable with, that which 'seems' the most honest to them.

Its too bad they are robbing their family to feed their false sense of integrity.

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mahlere

well said AA

ruskent

I am in my third year of business. I look back and i can not belive what i charged for some projects. No wonder i made no money in the early days.

Now i am trying to get as much as possible without being greedy. Starting out though, it takes time to build a reputation of quality so people understand why you charge what you can.

My sales pitch is improving daily, and thats mostly because i can talk so passionitly about what i do. My presentations are 10x better then i ever imagined. In a few years i WANT to be the most expenses, because my service is different then my compeititors.

mahlere

ruskent,

how do you handle repeat customers from your 1st year, since they may have gotten a wicked deal, and now you are getting your costs and prices squared away? anyone comment on the increase?

woodmagman

That is called a pre-sold customer. Those are the best

ruskent

Honestly i have only done work from one customer from year 1. Price really was not a issue.

Now i have a year 2 customer who got the deal of the century who referred me to his friend who seems to think he can get a deal too. Honestly, even though i worked my butt off on this customers job, i am still happy i did it. This job was the biggest job i have ever done at the time, and without that under my belt, no one would of trusted me with the jobs i am going to do this year. Part of the deal with this guy was he was a big time President of a 700 million dollar company. Business is his thing. He liked to wheel and deal. However, i knew i had to get that job no matter what. I did it and got it done with exceptional results and now i have one hell of a referal letter in my album.

Half the proablem with me starting out was that i was 19 years old. If i was 30 i do not think i would of had a hard time. It was hard for me to even get the smallest job. Now age is still a factor to some people. I lost a 26k job this week because of my age. The guy loved my design, but he just could not see giving 26k to a 21 year old. But on the other hand, i have a 250k job signed.

Matt

woodmagman

For those that have the, if only I was this or that, is just a excuse for not doing this or that.........if you know your buisness you will do buisness. It is as simple as that..You try to BS your way into it and someone may knock you down a time or two...

Mrmac204

lots of people (other carpenters) that I run into have lots of advise- sometimes they say "you can't make money doing that" or "you have to do this, or do it my way" etc... I do listen to them, then I think hard about it- but I keep my eye on the prize. Sometimes I can encorporate their ideas, but I am not going to change direction because someone else doesn't like how I'm doing things.

ie: someone that I know thinks I should do reno's - not right now I've never done one, and I don't wanna start - maybe in the future? never say never...