One question that I like to hear asked by prospective clients, but probably never adequately explain my answer to, is “where do we fit price wise with our competitors?” That’s a bit of a tricky question because one first must really decide who our competitors are. For a design/build firm that provides a similar level of service and quality of both design and construction that we strive for, we probably fall right in the middle of the pack when it comes to pricing. However, when if we are price checked against every ‘Joe with a hammer and truck’ and even some more established general contractors for that matter, we typically fall into the high side of pricing.
Never having been in a position myself to be able to spend extra, the perception that we may be overpriced used to bother me greatly and honestly it still does to a lesser extent. I don’t like the feeling if someone thinks we are overcharging, because that means they think we aren’t being fair, and always maintaining integrity is one of Custom Dwellings five core values that define who we are as a company. We also need to be competitive (with similar companies) so we’re always curious what our competition is charging. However, being at this for going on 20 years now, I’ve learned along the way that charging less for our services brings us more business. That’s all it does. We don’t make more profit; rather, we lose money. Clients suffer, because we get stretched too thin. Cutting our prices too low results in more work for less or no reward. Even when getting a great deal, the human condition is to still expect service, communication, quality materials and quality craftsmanship. It’s not often people will admit that they didn’t get something great, but that’s ok, because they got a good price. Most people still expect great things in return for spending their hard-earned money with us and I can’t disagree. So, I eventually came to the realization that we can’t be profitable if we aren’t charging appropriately for what WE do and if we aren’t profitable, we’ll have no business and no one benefits from that; not us, not past clients, and certainly not current clients. Ultimately that means that we are indeed too pricey for some clients, and we’ve come to accept that is ok. We can’t be everything to everyone, but we can strive to do the best we can at what we do.
Listening to a podcast about another unrelated company, I realized I’m not alone in my way of thinking of priorities and perceptions about pricing. The company being discussed has a reputation for being expensive. They also have a reputation for quality products and great customer service. They don’t worry about being perceived as over-priced. They worry themselves with delivering good service, a good product, and good follow through. I’m sure that, like us, they don’t want to be seen as over-priced, but they would much rather have clients that feel they overpaid and are happy than feel that they got a good price, but not be satisfied with what they received in return.
A real-life example of this played out with our company a while back. We were back onsite to address some warranty items that had arisen a couple months after we completed the project. While working, the client was overheard on the phone with someone discussing the project we had completed. Thankfully, she did tell whoever she was on the phone with that she was very pleased with how everything turned out, but for the price she paid she expects perfection and that’s why we are back addressing a couple of minor issues. We couldn’t agree more. Well, maybe not perfection as that is unattainable and subjective, but we do agree that for the price she paid we should come back promptly to professionally address concerns that arise. The pricing we charge allows us to do just that.