The call came from a woman who wanted her garage roof re-shingled. Clearwater Home Improvement had bid the job, but the homeowner had passed the company over for a husband-and-wife team who seemed to come out of nowhere. “She called us back and said our price was $1,800 higher,” says Randy Brown, owner of the roofing/siding/window company in Mystic, Conn. Clearwater Home Improvement's quote was $1,800 higher because, among other things, the low-ball competition could do the job on a Saturday, conveniently evading the responsibility to pull a permit. But now it was Monday morning, and the client was on the phone.
“She said: ‘I pulled them off the roof,'” Brown recalls. The reason? The freelance roofers arrived with OSB for decking after promising plywood, and had delivered to the jobsite a less expensive shingle than promised. They were also installing without an ice-and-water barrier. The homeowner, feeling taken, wanted Clearwater Home Improvement to come out and finish the job. “I said: Ma'am, it's half-done and it's half-wrong,” Brown recalls. He declined to take the job, instead advising her to call Connecticut's consumer protection agency.
A year and a half ago, StormTite Co., a window and siding operation in Warwick, R.I., quoted a price of $25,000 on a siding job. The prospect was a previous customer, a fact that owner Ed Ladouceur found particularly irritating when he lost the job to a low-ball bidder coming in at $18,000. After the job was completed, the owner called Ladouceur and wanted his company to redo the work.
“She said: ‘We made a big mistake,'” he recalls. Ladouceur went out to look at the job, which was “so bad I told her the only way I could get involved would be to completely take it down and do it over.” An additional source of hesitation, he concedes, was that “I didn't want people seeing my trucks and thinking we were the ones who screwed it up in the first place.”
PIE-IN-THE-SKY PRICING What tempted these unfortunate homeowners was something that reputable home improvement companies contend with every day: contractors who operate on anorexic margins or skimp on job specs to offer gullible consumers a price they feel they can't refuse, though they know in their hearts they ought to.
“Anybody who can pick up a hammer is basically a roofer,” says Kim Smith, owner of J.N. Davis Roofing Co., in Pasadena, Calif. “I've been selling roofs for 20 years and [low-ball contractors] are always going to be there.”
Whether you call him Joe Truck, Peter Pickup, The Truck-and-Ladder Guy, or any of the other names he goes by, the low-ball contractor is the one who will offer any price to get any job. Perhaps a better, fairer way to view him is as the no-frills operator who offers a basic job, and sometimes less, which homeowners are naive — or hopeful — enough to believe is comparable to the one you're offering at twice the price.
“They see companies like ours, which charge a premium, and think: ‘Oh, I could do this for a whole lot less,'” says Gary Delia, owner of Tropical Roofing, in St. Petersburg, Fla. “They know about installing a product, or selling one, but they don't have the wherewithal to run a business. So they spin their wheels and leave the customer holding the bag on warranties or poor-quality work or lack of service.”
Smith and others say that to successfully compete with low-ballers you must: 1. Offer value-added products and services, and 2. Convince the prospect that your company delivers a job that he or she won't ever have to worry about. Creating that reassurance, he says, starts with first contact. “It's how you take the phone call,” Smith points out. “It's being there on time. Making a great presentation. You have to systematically show them, through your whole approach, that you're a contractor they can trust.”
WHO BUYS PRICE? Smith, who created and now markets a software system designed to shield home improvement companies from low-ball competitors (see www.qualityone.com), says that one way to stay out of that game is to target the customers who are looking for a quality job rather than just the lowest price. He cites statistics showing that one-third of homeowners buy quality, one-third buy price, and the remaining third are available to be persuaded.