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Generic Contractors Are Fading Away, Brand Names Are Shining

Posted by Shawn McCadden on Wed, Nov 13,2013 @ 06:00 AM

Generic Contractors Are Fading Away, Brand Names Are Shining

Generic contracors going out of business

Remember the isles of generic vegetables at the grocery stores back in the recession of the 1990's?   Just like the manufacturers of those cans of generic vegetables, during the recent recession many contractors put themselves into a commodity market where the consumer chooses product based on price.

Manufacturers of those generic foods told us what was in the can was the same thing you would get if you bought the name brand products.   They also told us that the reason they could sell at low prices was because they didn't do any advertising and skipped the fancy labels on the can.   Essentially during the recession of the early 90's manufacturers of these products were banking on cash challenged consumers being attracted to their low prices for what they claimed to be the same quality of products they would get if they purchased the more expensive name brands.


Here today, gone tomorrow

My recollection is that those products occupied a few isles at the supermarket during the early years of the recession and consumers did give them a try.  But, by the end of the recession consumers stopped buying them and the isles went away.   My theory is that consumers discovered the products weren't the same quality as the name brands, the quality of the food often varied from purchase to purchase, and even at a lower price buying them just wasn't worth it.   I can tell you from my own experience that my kids wouldn't eat the generic spinach.  For my family saving money on generic foods really didn't save us any money at all because what we bought didn't serve the purpose for buying it.

Branding for contractorsI would suggest the same thing is currently happening to many contractors who resorted to similar tactics.  To lower their prices they too at the start of the recent recession took on generic labels and stopped doing any marketing and advertising.  They also offered their services with the promise that even at low prices consumers would get the same quality project the well known name brand contractors were offering.  Like the generic food manufacturers of the 90's, now that the economy is improving, these contractors are  finding it hard to sell anything at all.


Here’s my message

This should serve as a wake-up call for contractors who want to stay in business and actually earn enough money to live well, maybe even eventually be able to retire when their body's give out due to old age.   Let's face it, if your selling strategy is to be the lowest price, you need to be the loser to win.   When consumers are short on money they may be willing to give you a try, but if your offering leaves a bad taste in their mouth they will likely go back to buying from the name brands as their income improves.

If you are having a hard time accepting my thoughts in this article just take a look around you.   All over the country I am hearing from name brand contractors who are overwhelmed with work, are raising their prices and desperately need more staff to help them get the work done.  At the same time generic contractors are complaining that they have very little work and consumers inquiring about their services are still aggressively beating them up on price.  Like the generic vegetables, I am pretty confident many contractors with generic labels will soon be gone from the isles where consumers shop for a contractor.


Why contractors have to sell on price


Think about it.  

If you brought a 30 pack of generic beer to a Super Bowl party, would your buddies let you in?


Topics: New Business Realities, Differentiating your Business, Marketing Considerations, Customer Relations