Which is more important to the customer

George_10

Which area i.e. price or quality, are the deal maker with the customer. Which plays the most importance in the average customer's decision process. If you have an answer, why do you think so?

I believe these perceptions of the contractors on this Wall will be interesting and illustrative.

R. Kalia

determining quality

Kind of a pointless question. You probably don't buy the cheapest car, nor do you buy the fanciest car irrespective of price. You balance the two, and everyone's balance point is different.

But I'll answer the question as a customer if you'll first explain to me how the quality is determined at the time the price is set. Do I get to judge the quality of the completed installation and only then discuss the price? I get to do that when buying a car, clothes, furniture... But I haven't found a heating contractor yet who will agree to those terms!

Like everyone, my criterion is neither quality nor price but value, which is a more slippery concept. Contractors are stuck with the task of explaining value to the customer, but selling an unseen product will always be difficult. I am sure it is frustrating that people won't always pay whatever you ask, even though you SAY that your product is of high quality and you are delivering more value. But in all the cases where you are the customer, you probably behave the same way as your customers do.

**** Cheney doesn't have to worry about money, he can just use his big tax refund, but you and I have to worry every day.

GaryDidier

Price or quality

It depends on the customer. Most want both, some want quality and some say just keep it running as cheap as possible.
Gary from Granville

Uni R

Perceived Value

Perceived value is the bottom line. If they feel they are getting great quality at a good price, then they'll be happy. Likewise if they think they are getting an okay job but at an exceptional price they'll feel happy. Economics is about maximizing scarce resources. Few people have money coming out of their ears (despite the gorgeous systems we see in the photos here) so they just want to feel like they have gotten the best bang out of their buck. The best deal maker is to have the customer KNOW that you are the person to do business with and leave the decision to whether they want to buy good, better or best.


We all trash talk Home Depot but they're pretty smart. Offer a few brands at different quality levels. You want a Milwaukee cordless or DeWalt. Someone hums and haws between the two and never bother pricing then in other stores. They buy based on perceived value and they limit the scope of their perception to what is being offered to them right there and then in that particular store.


The best thing a contractor can do is have the homeowner's trust that whether they choose option A, B or C from you, you'll deliver top quality and they will choose their price point.

John@Reliable_9

R. Kalia , Why did you make it political.

After a well though out response, why did you make it political.
O’ I forgot the democrats like Ted Kennedy and J.F.Kerry really have to watch how they spend money.

George_10

I guess my real question was

how do you approach the sale. I appreciate what has been said, but I was even more curious about what you folks felt made the sale for you. I have been in the selling game for almost 30 years and I have a very clear idea of how I sell.
I was trying to get a perspective on what others thought "made it happen" for them.

RB_2

Something for all to consider...

This is one of the topics from last weeks seminars...ask someone who plays tennis where to position yourself to win...skilled players work the court up at the net or at the back ...play the middle court in tennis you lose everytime. The analogy has applications to your question as shown in the graph below...we live in a world where a single lady making $20,000 a year as a clerk will spend $300 at Victoria Secrets for a nighty and a couple having combined incomes of $250,000 will spend $4000 more for a designer oven range even though the builder included a perfectly good standard model in the price of the condo...Wal-Mart thrives - Hudson Bay Dies...in a very general way those with the highest prices have the best reputations delivering the highest quality and are the most popular (notice I didn't say greatest sales - but most premium players have a better than average profit line, ie: they consistantly put more $ in their retirement shoebox)...in the value segement its the same thing...you know what you get and what not to expect...but what is the "b" choice? The number 2? The mid model? Tough place to be in todays consumer driven marketplace.

Go value or go quality - and build your story around being the best at whatever game you choose... just my thoughts

Uni R

Market Segments

That graph gave me a chuckle. We are simply relabelling everything downwards. Value segment furniture from the 40's is probably at least on par with premium furniture today.

RB_2

relabelling

Excellent observation...

Consider this - a hand carved pair of duck decoys by deceased Canadian, Thomas Chambers sold recently for $300,000 (… by the way Chambers would sell a dozen wood ducks to hunters for $75 : )

75 bucks for 12 …inflated to $300,000 for a pair...how’s that for relabelling. Those old wood floaters are on par or better than today's stuff....but the termites and bugs like them, they don't pack as well and are heavy to lug around...and then there is the fact that we're just getting whimpier.

The highest I am aware of is, $801,500 U.S. for an antique preening pin tail drake by American carver Elmer Crowell. Imagine - eight hundred thousand plus dollars for a chunk of wood...not bad for a days worth of whittling and chewin' tobacca'

If it were not for the factories, many industries would not exist today...My brother and I own well over 200 plastic decoys...if they were still being hand carved out of wood our wives would be married to other men and we’d have to sleep with our shotguns to protect our assests….all puns intended.

I have a black duck carved in 1895 ... unfortunately its not priced in the retirement fund figures like some owned by my fellow collectors but its worth as much as the combined value of the 200 plastic ones.

Want to see another example?

Take a look at the post "Remembering Gil"...since taking on the responsibility as keeper of the wheel I have been approached to sell it a number of times...everyone would like it...but it's not for sale...it's one of a kind ... no one including me - owns it...that's what makes it so valuable...that's Dan's legacy.

Quack quack

[;@)

lchmb

only a thought

I have worked for a number of larger companies in New Hampshire and have recently gone to the smallest company I have ever worked for. As to your question this company sell's completely on quality, they are higher priced than other's in the area but the quality of work and the back up to the system is unmatched. We as tech's are given more than enough time to do quality work and if it goes a little over what the salesperson figured, no big deal. Just make the customer happy and do it right.

Robert O'Connor_6

Regarding the sale

of the wheel- i guess some folks will never get it!!

Thanks for your observations RB.

All the best.

Robert


Maine

Ken D.

Price/value

Overall, I think most people buy price. Look at Wal-Mart. Most of their merchandise is made in China that is most definitely inferior quality and they are the largest retailer in the world. Go to Home Depot and see the same thing. Buy a hand tool made in China and compare to made in USA. USA is superior, but Home Depot sells a lot of foreign tools with American names. This has much to do with people's shrinking paychecks and jobs. On the other hand there are many people who will spend more for what they perceive is higher quality. They, I believe are in the minority.

Cliff Brady

Anybody do \"Quality\" training at work

I had it in the 1980's at Amoco Corp. Its all about mutual agreement with your custormer as to what is to be delivered. It is a "quality" job if it meets your customers expectations. Exceeding is okay too. But too deliver quaility it is necessary to communicate and get a lot of things in writing.

Every time I see a business name or slogan like "Quality Plumbing", I still wonder if the business tries to deliver quality the way I defined it here.

If you talk of quality as some here do in terms of say Veissman verus Munchkin, the new(?) theme consultants are telling businesses is too stop going overboard on quality, especially with newly deemed disposable products such as cell phones. I like how HTP has brought condening boilers to the masses in their molded plastic cases packed with third-party parts and computer brains.

heatboy

Why don't we let...................

all of the homeowners here answer this question? In my own home, I want someone I trust and feel comfortable with. Price is nowhere near as important as the "leap of faith" I have in the person in my home.

hb

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sw_2

what do customers need?

The truth and honesty... let them make the choice.

Ken_8

I believe you can provide both!

I disagree that this is an "either-or" question.

For example, for a few years W/M offered their EG steam boiler "packaged" (meaning factory built and tested) at a LOWER price than the KD ("knock down" requiring field erection and putting the block and racks and all components on in the field). How or why? I have no clue.

Where crate size was manageable down the stairs and landing to the basement, we took the package boiler every time. Our labor savings was on the order of 2 billable hours.

We passed the 90% of the savings on to the customers. We also designed a near boiler piping "kit" that fit perfectly, had no left over pipe or fittings to drag back to the shop or return for credit, and passed that savings onto the client as well.

Then we found a source of TSP at under 70-cents a pound and bought in bulk to stop the 3 lb. bucket stops at the ACE or HD stores. Then we found a wholesaler who discounted Gorton vents if you bought a box at a pop. Then we found a guy who does nothing but decommission UST's, removal or sand fills - does two a day and saved us untold agony of doing it ourselves - and passed all these savings onto the customer as well!

We now install an EG steam boiler for less than we did two years ago (despite a 20% increase in our hourly rate) and our customers pay less.

We make more. They pay less. I think that is why we have more work than we can handle?

It sure as hell ain't because I'm so good lookin'!

It is because we CAN deliver high quality AND low prices.

But if you don't care about overhead and just "pass it on to the customer" you may in fact have comppromised both (quality and price).



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hr

Provide the customer with

good, better, and best options, photos of your work, as hb does, references, etc and let them decide.

Plenty of customers out there that will gladly pay for better and best systems, and contractors.

For example, by knowing and addressing overhead we were able to build a company the generated profits above and beyond our expenses.

By doing so we were able to be involved in five jobs with our local Habitat for Humanity chapter. Including several radiant. We had our customers and vendors chip in free supplies in several cases.

Hard to beat a free plumbing and heating system. I notice other progressive and profitable contractors here do the same, with their time and craft.

Thanks to the teachers, scout leaders and all that realize giving back to your customer one segment to be proud of key. Feels much better than just scraping by:)

Customers judge, and shop with contractors for more reason than "lowest price". Smart business owners know this

hot rod

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leo g_13

excellent response

Uni! 2 thumbs up!

leo g

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leo g_13

here's a goody

a salesman of mine from a local wholesaler, just got his semi-annual order for some n-36 relief valves. this customer is based in hong kong and sells there and to mainland china. at the bottom of the order, in big bold letters was this, "parts not to be made in china". oh yeah, the order was for 5,000!

leo g

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Darin Cook_2

SMART

That is exactly the way a company stays in business and makes profit. There is a lesson to be learned by your example. Smart Thinking!!

S Davis

Quality and price!

The way we handle it is excellent quality of work and excellent service, we get more referral work than anything about 80% of our business.
We give our customers a choise of different priced systems,more bells and whistles or less(with outdoor reset or without, variable speed mixing or mixing valve)also give them references and we have customers that are so proud of their systems they will let perspective customers come and look for themselves.
That sells most of our jobs for us.
S Davis

Mike Kraft_2

All things being equal............

Not all clients are the same.Selling a shoe that fits is whats important.Niche markets for average consumers has mathmatical challenges.Meaning not everyone who wants hydronics for their homes are capable of spending a kings ransome for heating.Lets face it hydronics has a fraction of the heating/cooling market.

I agree with hot rod.Good better best is the most logical way to approach a perspective sale.Educating the consumer to the advantages of the levels of upscaling is so key.If the client can understand and see the differances in his or her decision you have done your job.You can leave your proposal with them and if you have presented yourself and your work so they know...........you can sleep good.

Ken mentioned prefabrication.This is something I learned from this site and Area 51.Dan has preached this in his seminars so well that my mind pictured me waltzing in the boiler room and simply mounting up:)

cheese

S Ebels

Definition

What is the definition of quality? Most of us here know a quality job when we see it. We also know it when we make it happen. The question is; how does a customer who deals with this once or twice in their life know it? How can you possibly communicate to the customer what a "quality" job is? Most homeowners wouldn't have a clue if their steamer is piped correctly. Most wouldn't know enough to ask if you were using 200' loops or 1000' loops of pex in their floor. If they did ask and were told by "Joe Contractor" that "we use 1000' loops all the time", would alarms start going off in their heads?

The problem is that a quality job is only apparent after years of trouble free comfort. A junk job is only apparent after the last check is cashed and the first cold snap leaves them turning blue from c-c-c-cold and red with rage.

S Davis

Quality

I think thats what makes having customers that are willing to talk to perspective customers about their installation experence so important.
Quality goes way beyond the work it is how well you take care of your customers, treating them with respect being honest not making them feel stupid when they don't understand, doing your best to make sure their concerns are addressed.
IMHO there is a real lack of customer service in the trades and everyware, we need to get back to basics.

S Davis

Rocky

Customers are not buying either quality or price..

They are buying YOU. HOw do you represent yourself? Do you show up with a nice pair of dress slacks, belt, clean and pressed shirt. Clean shoes. Professional presentation? People WANT to like the folks they do business with. A clean, professional appearance, well laid-out presentation, and a friendly, professional demeanor will ALWAYS win out over a cheaper price given by a less well-prepared contractor. In my humble opinion. I personally have sold countless high-end jobs to my customers even though I was sometimes as much as 40% higher than my competitors, even though the equipment was basically the same. They were buying ME. If thats what they are buying, give them what they want.

Just my own thoughts,
Rocky