How are you going to prove better product for better value? It's too objective and the usual customer has no idea about product and value means cheaper. Agree with Mike, road to ruin. Somebodies going to bring you a quote that will make you build a job for a $100 over cost! Just wait!
No , Just No, Never looked out the window at the cometitior, did not need to care, my focus was on my customer and my product, my men and myself,
Competitor what competitor, you mean all those dozen guys who came and went, most seemed so focused on what we were doing how we did it and tried like heck to steal employees instead of what they should be doing
Sometimes a few got a job that would have been nice for us, the few times that happened i feel i got lucky, many times those clients expressed to others that they wish they had hired us (Now that is good advertising)
best focus was to stay ahead of the curve, when any technology might help i looked, many times i tried it and I implemented it when ready and not just because i wanted it, Bought used equipment many times knowing its life with me was to be short lived, used it to step income and production and bought new equipment (CASH) as soon as i could, relegating the used equipment as a back up, made damn sure i could learn to work on my equipment and not be dependant on company techs for everything.
Made sure NO one could shut me down....implemented largest edgebander i could afford and new CNC when small shop machines became of the quality for us, implemented 3d, outsourcing, and new products by reading the trade journals and going to the IWF. get and stay informed, I was quoted many times as being knowledegable in my trade.
No, do what we do, do it well, charge our price. And buy land
I've been in business mostly as a one man shop for over 30 years, pricing our products is critical. After the bubble burst in 2008 things were spooky quiet but when I did get a few jobs to bid on, I did not get the jobs.
So I decided on the next set of plans I would really bid the job low so I could get it (in a desperate moment) once again this one other particular shop got the job .
The builder was working the other shop who may have said something like I'll beat his price by 10% or ?
The lesson for me was that there will always be someone who will do it for less.
And imho we set ourselves into the flea market garage sale mentality of potential clients and do little to set ourselves apart based on our merits . I raised my prices back to more normal and slowly started picking up work again.
It is called SWOT. It is a known and accepted tool used by business and investors.
The idea is for any small business is to find a niche. Building Kitchens is likely lousy with competition. If you look at your own invoices over the years you will find the type of job that were most profitable and smooth. The market is telling you that is the sort of job that is needed and wanted.
You can then advertise/network to this market. Using the method that is the most effective.
Jon Elvrum (at one time an advisor on one of the WoodWeb forums) used to ask the question what business are you in. Automobile manufacturers are not in the transportation business, they sell emotional reasons for buying their car. Why are people proud of their BMW or Porsche? It is about more than transportation.
Jon Elvrum used to say sell the sizzle. What he was talking about was sell the emotional reason why people are buying what they buy.
At the top of the list is trust.
At the top of the trust list is you they have to buy off on you, otherwise all the rest is a waste of time. To this end the most effective marketing for this industry is networking. Use good manners, which means treating people with respect and importance. And learn and use excellent communication skills.
I found with residential work the lady of the house was the driving force behind the sale. Her emotional reason was that she was tired of the same old kitchen. I would literally use this line in the advertising.
Your position in the market place can be the provider of whatever the emotional reason is that people are shopping for that particular item. Jon Elvrum used to say that your competition was the vacation, new car, RV, etc.
We all get people that want us to do it cheaper. I really don't care what other shops charge. If a customer wants me to cut the cost, I'll work with them to eliminate costs from the project, "value engineering." What I won't do is reduce my price for the same work. For what it's worth, I won't do kitchens, found out I can't deal with Ms house wife. Too hard to come to decisions. I'll stick to my itty bity niche and watch the kitchen guys beat each other up. The best in that market don't sell cheap.
I pay zero attention to "competitors" pricing.
It is what it is, most come for the service and design anyway.
I work very hard to make certain that NO ONE provides better communication and response to their needs.
Customers appreciate the timely engagement and focus on THEIR needs, without the high pressure
Slay them with service and good quality and price becomes fourth or fifth on their priority list.
I agree with Jim. We have won Best of Houzz for 5 years running for customer service. We are almost always one of the most expensive when clients are getting multiple quotes, but our attention to clients requests, and attention to personal,service usually win out.
If I get anyone that says they have seen the same thing for less, I tell them I would be concerned it was not for less.
I'll point to their Mercedes and tell them it has a known market value, and it is different from a 5 year old Malibu, for many reasons.
Yet my work, and my competitor's work do not have known market values. It is up to those of us selling the stuff and the buyer to sort out what the values are and what hose values do to the prices.
Then I quote D Brown "There is always someone that can do it cheaper" then add my own "I don't think you will find anyone to do it better."
To be the devil's advocate- I think the question may lie in how low can you go and still make it worthwhile? I love how everyone claims that they are the most expensive and that is because they provide the best quality and service- but that just can't be true for ALL of us. I don't know the answer, and I would certainly not suggest we try and go as low as possible, but if we are in competition at all, it behooves us to keep and eye on prices and how they compare to our actual competitors.
When you buy a 1234 model appliance that you can get anywhere, BB, Lowes HD will price match, so if you price match then its the exact same specs, if the other guy does cardboard interiors then that's what you match.
Ask for a detailed copy of the proposal they want you to match, the clarifications and exclusions may be beyond the purchaser.
I understand your thinking on this but it's based on a retail mindset. One of the biggest hurdles we have to come to grips with is realizing that, as much as want it to be the case, not everyone is our customer.
As just one example, you may want to make $75-$100K / year as a business owner doing what you do while someone else might be happy making $50K / year because it's more than the $32K / year that is our industry average. That ONE metric alone will mean that if you want to "compete" with everyone based on price under the premise of getting more business, realize this is a race to the bottom as all things being equal the ONLY place that money can come from to "price match" is literally out of your pocket, whether in the form of actual cash not received or a condensed schedule working more time at a harder pace for less money...
Factor in if you have a shop versus another not having one and you have yet another level of cost that must be factored in... employees, equipment purchases, Chinese cabs, the list of differentiators goes on and on...
Once you realize and internalize that not everyone is your customer (VERY hard to do at first), your focus needs to change to find customers that can support your business and it's pricing schedule...
With all the differentiators from company to company, you will find it hard to "price match" everyone... if you still intend to play the "competing" game, your better off with something along the lines of "best value guarantee" which places the focus on your strengths as a company and person...
We get and keep CLIENTS (not jobs) by being better than our competitors, not cheaper. We are organized, we always have the answer or know how to get it. We don't settle. We don't blow smoke. We say what we do, and do what we say.
Recently got behind on estimating and semi-passed on a pretty decent sized job. This new client called yesterday and nearly begged us to submit. Seems he sent the plans to 4 additional shops and nobody returned a bid, now he's stuck.
Great way to get a big new client? Bid it straight, despite knowing he's stuck and deliver on time and on budget. Solve his problem.
Who wants to bet he favors our bids out of the box next time?
After ten years building cabinets, I decided to work for Lowes as an installer. I wanted to get away from the dust and fumes. I can tell you now that if I price matched the big box stores I would have made a hell of a lot more money. I made enough with what I charged, but obviously I didn't know what people were willing to pay. That was bad business on my part. I am amazed what people will pay lowes to do things. I have installed cabinets from all of the manufacturers and for the most part, with exception of the value lines, they are pretty good quality. There is little customization available with them and that is what can set you apart.
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