# What do you think separates you from your competition?



## angus242 (Oct 20, 2007)

So you found the secret that 1000's of other contractors missed? Unlikely. 

What's more realistic is that you might have lower operating costs than others. Perhaps you don't have kids or aren't married. Perhaps you live rent-free. Maybe you pay your subs less. 

The bottom line is you cannot grow if you are on the lower end. I'm not saying you must charge more, but soon as you mentioned the word "cheaper", a certain mindset aligns itself with that. Contentment. 

That's your gig. But you will eventually need to change to survive.


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## tooltheory (Dec 10, 2010)

S.R.E. said:


> You know, retail is a little different then contracting. :confused1:


You're righ,t it is different. I have no idea what it has to do with this conversation though. Oh wait, you're probably going to attack me about the website listed in my profile, like you have on other posts. Why? I don't know. I have never mentioned it in any posts. 

What? I can't be a contractor and have an unrelated website?


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## tooltheory (Dec 10, 2010)

angus242 said:


> So you found the secret that 1000's of other contractors missed? Unlikely.
> 
> What's more realistic is that you might have lower operating costs than others. Perhaps you don't have kids or aren't married. Perhaps you live rent-free. Maybe you pay your subs less.
> 
> ...


Angus242, you are right. I lower my operating costs by buying back unused materials at more than half off. I buy used equipment at more than half off. You can't call me cheap but you can call me efficient. I don't spend on luxuries only on necessities. I don't toss my bits until they don't drive screws fast enough. 

People automatically assume cheaper means crappy. I think they are just upset that contractors like me get all the business.


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## angus242 (Oct 20, 2007)

tooltheory said:


> People automatically assume cheaper means crappy. I think they are just upset that contractors like me get all the business.


I never mentioned crappy. I think you are missing the point. If you simply charged a bit more, you might lose a few jobs here and there but the price increase can make up for that. You are working less to make the same money. 

The way you start really becoming profitable is when you are billing for all of your time. I mean ALL of your time. I think if guys really tracked every hour that goes into a job, you'd see the true hourly rate is much less then you'd think. 

Let's assume your work is quality. By charging "less" you are exposing your true weaken; sales. If you really worked on your sales presentation to make 2% more on each job next year, just think where you'd be at the end of 2011.

You're assuming price is too big of a factor when closing a sale. But like I've said, that's your choice. Smarter, not harder. :thumbsup:


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## tooltheory (Dec 10, 2010)

angus242 said:


> I never mentioned crappy. I think you are missing the point. If you simply charged a bit more, you might lose a few jobs here and there but the price increase can make up for that. You are working less to make the same money.
> 
> The way you start really becoming profitable is when you are billing for all of your time. I mean ALL of your time. I think if guys really tracked every hour that goes into a job, you'd see the true hourly rate is much less then you'd think.
> 
> ...


What you say makes perfect business sense. I'm sure that would be a great strategy for larger metropolitan areas. My main market is in a small town of about 10,000 people, and just about all of the buyers are looking for the best price. The economy is down here, and if i start charging more that can mean the end of my business. The only reason my business is thriving is because of great price and quality all in one package.


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## angus242 (Oct 20, 2007)

I disagree. Does McDonalds care if it's restaurant is in podunk AK or metropolitan NY? Does Chevy reduce it's MSRP because the dealer is in rural Idaho or urban L.A.? 

There may be certain local factors that change overall pricing, like logistics (delivery) or sales tax. However overall a company that markets correctly steers the customer towards _value _of the service instead of _cost _of the service.

I think it would really make a difference for you if you started focusing more on the marketing/sales aspect of your business.


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## carpentershane (Feb 9, 2009)

tooltheory said:


> Now that I have figured things out this never happens. I'm always happy with what I get.


Sunshine and Rainbows, balloons and puppy dogs?


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## tooltheory (Dec 10, 2010)

carpentershane said:


> Sunshine and Rainbows, balloons and puppy dogs?


:laughing: exactly!


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## TNTRenovate (Aug 19, 2010)

Tool, I am 100% agreement with Angus. Which you don't know how often that actually happens...never.

You said that you never stated you were the cheapest, but you did when you listed cheaper as one of the items that separates you. If you are cheaper than your competition, you are the cheapest.

My point about the work triangle, which was actually orginially the engineering triangle, is that no matter what you may think, you can only do two of those well at any given time. You may be able to give a good product, really fast, and cheap, but something is giving. One of the three is suffering.

I go back to my original statement concerning this thread and that is we don't know what truly separates us from our competition. We can only know what we do and that we are successful at it.

Give the customer a goof VALUE andit doesn't matter what 10,000 or 100,000 populated town you are in, they will come back to you every time. But once you set your price, this is the price that they will always expect. It is really hard to raise your rates once you have established a rate. It is kind of a bait and switch, and a big turn off. Why would you want to sell yourself twice to the same customer?

I will address the bad ecomony now. The public thinks that the cheaper I get it the better deal that I am getting. We have Costco, Walmart and the other Big Box Stores to thank for this. In the services industry it is not true. We, as contractors, have to focus on selling the value of our service. We need to sell them the idea that if they go with the lowest bid, they will end up paying more than my bid in the long run. Lowest bid means cheapest labor and materials. Do customers want their house painted with $20 a gallon paint, which takes 3 coats to cover, has half the glue and bonders in it, that if you wash it the color smears or comes off? No, they won't mind paying triple that on materials if they know that the paint is one coat coverage and very durable. The other painter may be cheaper, but he doesn't move your furntiture and forget about wearing shoe covers, he doesn't want to spend the extra $5.00 on a box of them.

Do you see where I am going? Sell your value and not price. Angus is right....ouch, that hurt again...see what happens by just raising your rates by 2-3%. It is not a whole lot, but if your sales last year were $100,000, you will have an additional $2000 in your pocket this year if you only match last years sales. Or, as Angus said you can take 1 or 2 fewer jobs and make the same money. That's why Angus can post until 2am.


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## carpentershane (Feb 9, 2009)

Good posts TNT and Angus. 

Emphasizing value is something I try to do immediately when working with HO. I tell them very early on in the discussion that I am not going to be the low bid- BUT I am going to be the best value for their hard earned dollar as I do quality work w/o shortcuts. The project will be completed correctly w/ attention to detail. There will always be someone else willing to do the job cheaper- I don't compete with idiots


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## S.R.E. (Apr 8, 2010)

TNTSERVICES said:


> Tool, I am 100% agreement with Angus. Which you don't know how often that actually happens...never.
> 
> Angus is right....ouch, that hurt again...


TNT what's up? are you sick?:w00t: :laughing::laughing:
Don't keep telling Angus he's right (even though he is) or he will get a big head.:laughing: :clap::clap:


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## tooltheory (Dec 10, 2010)

TNTSERVICES said:


> Tool, I am 100% agreement with Angus. Which you don't know how often that actually happens...never.
> 
> You said that you never stated you were the cheapest, but you did when you listed cheaper as one of the items that separates you. If you are cheaper than your competition, you are the cheapest.
> 
> ...


Nope it didn't hurt at all, because you made some great points and so did Angus. The way I work is (for example):

I give the HO the option of cheap paint or the really nice stuff. I explain all the pros and cons. I also explain what its going to cost for the paints and the labor. cheap paint = low quality = more for $ labor, more expensive paint = higher quality = less $ for labor.

Some things the HO does not get the option of saving on like shoe covers or labor costs.

The HO knows exactly what kind of materials are going into his/her home. Some things they choose to save on and other things not.


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## tooltheory (Dec 10, 2010)

carpentershane said:


> BUT I am going to be the best value for their hard earned dollar as I do quality work w/o shortcuts. The project will be completed correctly w/ attention to detail. There will always be someone else willing to do the job cheaper- I don't compete with idiots


I agree, I just give the option for the HO to save on certain things.


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## Gough (May 1, 2010)

tooltheory said:


> Nope it didn't hurt at all, because you made some great points and so did Angus. The way I work is (for example):
> 
> I give the HO the option of cheap paint or the really nice stuff. I explain all the pros and cons. I also explain what its going to cost for the paints and the labor. cheap paint = low quality = more for $ labor, more expensive paint = higher quality = less $ for labor.
> 
> ...


I've seen a lot of painters take this route, and it always comes back to bite them in the end. It may take a while, but it does, especially in a small market. If, as you say, cheap paint=low quality, and low quality=poor performance over time, then paint jobs done with lower-quality materials will look bad sooner. I work in a small market (town = ~20,000) and I've seen this happen a lot, word gets around. If enough people choose the cheap option, as you insist they will, you'll eventually get the rep for doing work that doesn't hold up. People remember that, not whether or not you wore shoe covers.


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## tooltheory (Dec 10, 2010)

Gough said:


> I've seen a lot of painters take this route, and it always comes back to bite them in the end. It may take a while, but it does, especially in a small market. If, as you say, cheap paint=low quality, and low quality=poor performance over time, then paint jobs done with lower-quality materials will look bad sooner. I work in a small market (town = ~20,000) and I've seen this happen a lot, word gets around. If enough people choose the cheap option, as you insist they will, you'll eventually get the rep for doing work that doesn't hold up. People remember that, not whether or not you wore shoe covers.


By the time the paint goes bad, most HO would have long forgotten me. :laughing: Plus, it was by their choice that I used the cheaper paint. BTW, most HO end up choosing the more expensive paint option anyway. Rough estimate: 75-80%.


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## Gough (May 1, 2010)

tooltheory said:


> By the time the paint goes bad, most HO would have long forgotten me. :laughing: Plus, it was by their choice that I used the cheaper paint. BTW, most HO end up choosing the more expensive paint option anyway. Rough estimate: 75-80%.


Interesting. You mentioned that you work in a small market; is your work really that forgettable? I get that your clients chose the less expensive paint, do the passersby who know you worked on the job know that? 

I made the decision early on that we wouldn't do a job with less than top-quality materials and wouldn't skimp on preparation. I'd rather lose a potential job than let our name be associated with some lower quality work. 

What you seem to be saying is that, in 20-25% of your jobs, you're willing to risk your reputation by using cheaper materials. It may work for you, but that's not a gamble I'm willing to take.


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## tooltheory (Dec 10, 2010)

Gough said:


> I made the decision early on that we wouldn't do a job with less than top-quality materials and wouldn't skimp on preparation. I'd rather lose a potential job than let our name be associated with some lower quality work.


I have not made a decision like that, but think I will this coming building season. I don't want to work so hard to toss my reputation down the drain.


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## carpentershane (Feb 9, 2009)

_"I agree, I just give the option for the HO to save on certain things. "_

I disagree to a certain extent- My reputation on a job will outlive a customer's choice. For example: I just quoted a carport (for a boat actually) and after looking at the quote the HO decided that they did not want a poured slab or the gable end framed in. I adjusted the quote accordingly. No biggie. If someone wants me to cut corners or use inferior products I would rather let the job go to someone else than do half ass work. I am the professional, I have the experience and I am paid to do what is best-not to satisfy the whimsy of the customer


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## FRAME2FINISH (Aug 31, 2010)

back when i started, i was asked to give a bid for a job, i was busy at the time so i didn't care if i got it, so i put a crazy price on it and got it.

so if ya get a couple bids to do take and make sure you get the ones you need and price the others at a higher price,

if ya get them great if not oh well your too busy as it is .


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## TNTRenovate (Aug 19, 2010)

tooltheory said:


> Nope it didn't hurt at all, because you made some great points and so did Angus. The way I work is (for example):
> 
> I give the HO the option of cheap paint or the really nice stuff. I explain all the pros and cons. I also explain what its going to cost for the paints and the labor. cheap paint = low quality = more for $ labor, more expensive paint = higher quality = less $ for labor.
> 
> ...


Not that it hurt you, but me admitting that Angus was right or had a good point.


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## TNTRenovate (Aug 19, 2010)

tooltheory said:


> I agree, I just give the option for the HO to save on certain things.


Why give them the option for your work to look like crap? Anyone walking in can tell it is cheap paint, and it won't matter what the customer tells them. The impression is made.

I won't cheap out on anything. It is just not worth trying to make it look nice, or give a warranty on it. Plus, it usually takes more time (labor) to mess with cheaper products.


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## larryb (May 23, 2008)

A faster vehicle...:shutup:


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## kevjob (Aug 14, 2006)

Let me guess tool, no markups on materials for you?


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## OleTom (Aug 12, 2007)

Well not to sound like a cornball BUT taking true pride in my work and living up to my word saying what I mean and meaning what I say.

Even if you charge more then the next guy these things are priceless :thumbsup:


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## buddy110 (Oct 3, 2009)

bpi building analyst and envelope certifations, good looks, charm and i drive a subaru:clap:


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## Tom Struble (Mar 2, 2007)

charm eh.....:whistling


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## buddy110 (Oct 3, 2009)

tomstruble said:


> charm eh.....:whistling


 and wit :laughing:


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## BamBamm5144 (Jul 12, 2008)

I shower...


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## buddy110 (Oct 3, 2009)

BamBamm5144 said:


> I shower...


I'll have to try that


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## Tom Struble (Mar 2, 2007)

buddy110 said:


> and wit :laughing:


 
:blink:


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## taylortremor (Dec 11, 2010)

*Customer Service Excellence*



VNativo said:


> As an owner if a general construction firm, I am alway curious on what other companies/owners feel is their company's ONE best attribute or advantage over their competition.
> 
> For me, although I do not practice, I am a licensed architect so I have a different eye than most of my competition. Because of my construction experience, I am able to "assist" the owner & the project architect in a different way.
> 
> ...


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## buddy110 (Oct 3, 2009)

tomstruble said:


> :blink:


And I'm hung like a moose... ................I mean mouse


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