“Competing on price alone is a race to the bottom, and it’s a race nobody wins. For some people, though, price is their only consideration. That’s a sad thing, because most times, you do get what you pay for. ” – C. E. Young
As a contractor building outdoor structures attached to people’s homes, we often get challenged on price. In fact, it is frequently the biggest barrier our salesmen have to overcome. And that’s easy to understand, since price is easily quantified. It’s more difficult to quantify or compare value.
Price is one thing that determines value. But it’s not the only thing. In addition to price, you have to consider the cost of maintenance, the risk – and related cost – of product failure, and perhaps most important, the intrinsic feeling of worth that you get with the product. And remember, it’s not just an outdoor living “product.” It’s your home. Your deck, your sunroom, your pergola, your screened porch.
An example of price vs. value that we often come across is when customers ask about the cost of a wood deck versus the same deck made of composite/pvc materials. The composite deck costs more – sometimes twice as much – than the same deck in high-quality pressure treated pine – but which choice is the better value? The pine deck will need to be treated every 1-2 years to prevent warping, splintering, etc. Without this maintenance, the wood deck will deteriorate to the point of needing to be replaced in 5-10 years. The composite material normally has a warranty for 20 to 25 years. The composite also looks more impressive. So the intrinsic value of the composite deck could be significant to the homeowner. How much more pride and satisfaction will the homeowner have in the composite deck, both when it is new and over the life of the deck, as compared to the pressure treated deck? Meanwhile, another homeowner might take more pride in choosing a less expensive product and committing to the regular upkeep necessary to make it last longer.This is a subjective feeling. Which deck has a higher value? It depends on the homeowner.
This concept of value applies to choosing a contractor as well. Review for a moment the other criteria discussed in this series: experience, professionalism, process, design, details and warranties. Based on these criteria, all contractors are not the same. If price is the only consideration, then one must also factor in the risk of things not going perfectly.
What’s a worst-case scenario? A fly-by-night contractor taking your money and running? Perhaps you face a more likely scenario where the project gets completed but not fully to your liking, or a scenario where the finished structure is fine but the construction process is painful and slower than you would like. Each of these scenarios has a cost associated with it. The problem with determining value is that unlike price, you really don’t know what the overall cost is going to be – there is risk no matter what you do. The best you can do is to minimize this risk.
Are we saying that high price is always better than low price? No! Higher price is only better if it reduces your risk of having to spend more later to get what you want. The costs of providing insurance, of hiring competent skilled (and documented) workers, of reliability, of having assurances in the form of warranties and of simply standing behind one’s work are not free.These are real costs that have to be built into a contractor’s cost structure. If you allow the contractor to shortcut these factors, then your risk goes up. In the long run, your lower price may not really be lower.
On the other hand, there are also contractors out there who use high-pressure sales tactics to pressure customers into paying high prices that are not related to reducing risk and ensuring quality. Some companies in the home improvement business are known for quoting a very high price, then using high-pressure tactics of closing the sale at that sales visit, up to the point of almost refusing to leave unless the customer signs.Then, upon threat of being kicked out, they offer a one-time only discount of 30%.These tactics are aimed at getting the customer to sign without allowing the time to become educated on what the real price/value proposition should be. Sales tactics like these make it difficult for the consumer to trust any contractor (which is unfair to those of us who are trying to provide a fair product at a fair price).
A final comment on value: We always ask customers what their budget for a project is. Sometimes they seem reluctant to tell us, as if they fear we might raise our price up to their budget target.The reason we want to know the budget is two-fold. First, if it is unreasonably low, we can avoid wasting their time and ours talking about a project that is not going to happen at that price level. Second, if we know the budget (and if it is realistic), we can design the project to fit into that range.There are four components of any outdoor living project that affect the price: size, materials choices, features, and environment. The cost of your project can increase or decrease dramatically simply by varying those components. A reputable contractor, with your best interests in mind, can provide you the value that you need at the price point you want – if you work with them on the choices available.
We are all looking for a deal – it’s human nature. If you are buying a $35 shirt and you think you can get it for $25, go for it. The worst that can happen is you may be out $25 if it doesn’t hold up. But if you are considering using a contractor to build something for you, then you are likely talking about a meaningful amount of money – more than you would be willing to waste. This is not the time to be trying to get a super sweet deal – it may cost you much more in the long run. As the old adage says, the bitterness of poor quality lingers long after the sweetness of low price is gone.
Our commitment to excellence in outdoor structure design and building ensures your project is brimming with value. Call Archadeck of Central SC today for a free design consultation (803) firstname.lastname@example.org
Please visit our extensive outdoor structure galleries located on our website for more examples of our lovely designs.