Credit: Illustration: Peter Horjus
Ralph Feurer was startled when he began receiving demands via e-mail from a couple who had recently received a proposal for windows from his company, Norton's Quality Exteriors, in Midvale, Utah. First the couple wanted a free window, then they wanted free windows for the garage.
Feurer says that he has been seeing a lot of hard-bargaining from prospects lately, especially during the last four or five months. "People will say point-blank: 'You're a good company. We'd like to do business with you. But we're not going to pay that much. What can you do for us?'" he says.
Other contractors have noticed that some homeowners are inclined to use the recessionary economy as a way to pressure them for price deals or to pit contractor against contractor. Ken Moeslein, CEO of Legacy Remodeling, in Pittsburgh, recently presented a prospect with a price on a window job. The prospect called back a few days later to tell him that her father had advised her to hold off on buying windows because as the economy gets worse she might get a better deal.
Pat Nicholson, owner of Deckmasters Technologies, a Pittsburgh deck company that also operates deck-building franchises, says he finds that prospects rarely bargain, but that they "want a bargain." A sense of economic conditions and the contractor's vulnerability on price are, he says, "within the whole feeling of the appointment." But Nicholson deliberately does not bring up the subject of tough economic conditions in his presentation.
"When you start talking negatives, all you're doing is giving [prospects] a reason not to invest," he says. "So we only talk about positives. I tell them that times are a little tight right now, so now is a good time to improve your house. It's not just your best investment, it's the only investment where you can count on a return."
Some companies, finding repeated requests for special discounts, prepare their salespeople to meet such demands head on. Legacy Remodeling, for instance, has reps carry copies of recently faxed price increase notices from suppliers, to make customers aware that such increases come regularly and "your better deal is today's price."
Nicholson says that he responds to questions about how much business his company is getting by telling prospects "exactly the truth. I say: We are busy. There may be people that aren't, and I'm not sure why, but we are."
Another way to prepare for bargain-hungry homeowners is to build more flexibility into pricing models. "I have the salespeople call [from the presentation] and give me a quick synopsis," Feurer says. "Then I try to walk a very fine line between losing the job ? and getting nothing ? and giving [homeowners] enough that they're pleased."