Adding value to your business

I recently sent an email to subscribers in which I explained how to address low-priced competition by offering more value to differentiate your company. A reader responded and asked for some things he could do to add value, and this post will briefly address that issue.

Consider the following facts:

  • Most painting contractors do not accept credit cards
  • Most painting contractors are not a member of the BBB
  • Most painting contractors do not have any form of certification, such as RRP or from manufacturers (such as Wolman)
  • Most painting contractors fax or email their estimates
  • Most painting contractors refuse to spend money on training for their employees
  • Most painting contractors submit estimates that are vague.
  • Most painting contractors do not offer color consultations.
  • Most painting contractors offer their clients little in the way of consumer education.
  • And the list goes on.

What if you were different in regard to a few of these items? You would suddenly offer more value than most of your competitors. What if you were different in regard to all of these items? Then you would offer significantly more value than your competitors.

When you offer more value, the low-priced competition ceases to really be a competitor. They are offering something completely different. So, if you find yourself challenged by low-priced competition add more value to your business.

Customer expectations can be unreasonable

One of my favorite experiences as a painting contractor is dealing with “paint emergencies.” These can take numerous forms, but they essentially amount to the customer needing the work done immediately. These are situations in which the customer suddenly decides she wants some painting completed and then expresses outrageously unreasonable expectations. For example:

  • A commercial customer needs a room painted with a decorative finish. She called at 2 PM and needed the work done that day. She did not have a price, nor did she understand that decorative finishes usually take several days.
  • A residential customer called in the afternoon wanting an estimate that day so that we could start the next day. When he was told that was impossible, he announced that we would not be getting his business. And by the way, he had previously insisted that we give him the cheapest price possible.
  • We also get a surprising number of calls to send a painter over. Apparently some people think we have painters sitting around the office all day drinking beer (that’s what painters do, after all) just waiting for their phone call. Most of these calls involve a DIYer who got in over his head and needs a professional to bail him out. These “experts” usually tell us that there is only a few hours of work.

I am not sure whether these types of emergencies reflect a character flaw on the part of the customer, or the public’s perception of the painting industry. While it may be a bit of both, I suspect it is more the former.

While it may be possible, I have yet to see a true paint emergency. Unlike plumbing or electrical problems, a paint problem is not going to threaten one’s comfort or safety. Unlike a roofing leak, a paint problem is not going to place the house and its contents in immediate jeopardy. So why do people think that they have a paint emergency?

At least in my experience, those who think that they have a paint emergency are typically very demanding. To call in the afternoon and expect an estimate that day is usually not going to happen (perhaps if I am already in their area I’ll do it, but otherwise not). It is a very unreasonable expectation. They are usually open about the fact that they aren’t about to spend a lot of money. Which they probably won’t have to do if they can find someone to start their job that day. And they often act like they are doing us a huge favor by calling us. They act as if they are our first customer of the year.

It is obvious that such people are clueless as to how successful contracting companies operate. While we occasionally have a small hole in our schedule because a customer isn’t ready, or we have weather issues, we usually stay booked for three to five weeks. And we certainly aren’t the cheapest painting company in town.

There was a time when I would do almost anything to try to accommodate such people. But it became clear to me that they these people are not the type of customer I want. When I realized this, my attitude changed.

While I try to accommodate customers, their requests must also be reasonable. I need customers, but I don’t need any one specific customer. And I certainly don’t need unreasonable customers.

And speaking of unreasonable customers, I once had a call from a customer who was questioning my price. It’s only a few ceilings, he said. Why so much money? I explained that he had a lot of furniture to protect, that we needed to cut in around the walls, and we had to make sure we didn’t get any paint on the walls.

Don’t worry about protecting the furniture, he told me. I don’t care if you get paint on everything. I honestly didn’t know whether to laugh or start looking for Rod Serling. I explained that a professional company wouldn’t do such a thing. He argued for a few minutes, interlacing a few insults along the way, and then hung up after announcing that he would never hire my company.

Sometimes the best jobs are the ones we don’t do.

Your price is too low

Every once in a while a customer will remark that my price is lower than she expected. I always respond that I will be happy to raise my price in order to satisfy her expectations. Of course, I have not had anyone agree to this.

While it might seem odd that a customer would make such a remark, I take it as a bit of a compliment. It indicates to me that the customer knows that I won’t be giving her the cheapest price in town. It tells me that I have properly educated the customer, that she knows I will be offering her superior value, and that she knows that she will have to pay for it.

The sales process is largely one of educating the customer, of explaining the various factors that determine the long-term value of our services. If we are simply throwing prices at customers and hoping that some “stick”, we are doing nothing to distinguish our company or justify a higher price. However, if we have properly educated the customer, she will understand what factors contribute to a higher price. She won’t be surprised by our price–indeed, she will expect it.

One of the biggest complaints from contractors is the seemingly constant refrain of “your price is too high”. While we certainly don’t want to underbid jobs, it can be quite refreshing to hear “your price is too low”.

Update on a few things

If you have missed our free workshops you are in luck. We are making the audio available for a nominal charge. Click here for more information.

For a limited time you can sign up for our 36-week course and save 25%. Click here to learn more.

Page 10 of 19« First...89101112...Last »