The Design Builder's Blog

11 Common Traits of People Who Buy Remodeling On Price

Consumers who buy remodeling on price typically don’t care about anything else but price; until they become customers.  Then after your remodeling or construction company has them as customers they seem to always want more than they agreed to pay for. 

There are two main types of prospects who buy remodeling on price. 

• The first is those who are driven to pay as little as possible.   These people typically apply this logic with everything they buy.   They are also much more likely to lie to you, your employees and your subcontractors if it suits their purposes for saving money and or getting more than they paid for.
• The second is those who, lacking insight, simply don’t know what else to consider when deciding between contractors so they base their decisions on the bottom line.  These people may actually be willing to pay more when selecting one contractor over another, but the contractor must be a true sales person to help them discover other more important things to consider.  

It also takes a true sales person to distinguish between those who buy on price on purpose and those who buy on price due to a lack of insight.  Most contractors are terrible salespeople, so most contractors have to sell on price.

For those who have been selling on price

My purpose of writing this blog is to provide contractors with some motivation to embrace sales training so they are not destined to sell on price forever.   Check out my list below of the common traits of those who buy your services on price.  If these things are happening to you it’s your own fault.  When you think of yourself as a contractor first and a sales person second, you doom yourself to a career that will probably pay you less than per hour than your employees earn.  If that is already happening you have three choices:

1. Decide to do something about it and get some professional sales training and coaching.
2. Decide to do nothing and recognize that you and your business are commodities
3. Or, avoid thinking about it and stop reading this blog post before you feel any worse about your situation

People who buy solely base on price have these common traits

I encourage you to use the comments area to add any others you feel should be on the list.

1. They see remodeling as a commodity where every contractor and proposal are the same, not a service where one company does things differently than another.
2. They always seek to get more than they paid for.
3. They don’t like to give big deposits or commencement payments; they expect the contractor to finance all or most of the job until the final payment.
4. They lied to you and think it’s just fine to do so.  This often leaves them wary and concerned that you will lie to them as well, creating a need for them to always be suspicious when interacting with you and your team.
5. These people won’t like discussing change orders at all, won’t pay for change orders at acceptance and or will want to negotiate their cost at final payment.
6. These people try to get free stuff out of you and your team after you start their job.  If you give in on this they will want more free stuff.  They are also likely to forget about the free stuff you already gave them when you want to charge them for any extras or change orders.
7. They will typically dispute your payment schedule, make scheduled progress payments late and delay your final payment as long as they can.
8. They will only buy from you again if you are the cheapest of the contractors they speak with.
9. They get closer to their own retirement at your expense and limit your ability to retire.
10. They will often find some way to blackmail you into reducing the final price.

These people hang out with other people just like them!

Here's one last thing to think about if you sell to people who buy on price; they hang around with other people just like them.   If they refer you they will probably be referring you to other prospects who also buy on price.   When they do so, based on their own experiences working with you, they will often coach the referral on how to lie to you and get stuff for free.   They will also often identify what your business’ weaknesses are so the referral can watch for them and use them to blackmail you into some type of money related concession before they are done with you.

Guest Blogger: Diane Menke, VP/Operations Manager of Myers Constructs, Inc.  Diane Menke (left) and Tamara Myers (right) are the co-owners and principals of Myers Constructs, Inc., an award-winning design to build firm serving the greater Philadelphia region. A certified Women Business Enterprise, Myers Constructs is also a member of the U.S. Green Building Council, NARI, and NKBA.

Advice For Contractors When Working With Home Buyers Considering Renovations

The Construction Pro: A Key Player in the Home-Buying Process

Most people who are in the market for buying a home that is in need of renovation are not home-construction experts — and they don't know what the various necessary upgrades will cost them. That's why it makes sense for them to reach out to a reputable local construction expert for information before they make a property purchase. We get calls from people in this position often.

This is the advice we give them:

• Their real estate agent should provide them with comparable values for the property they are considering. The agent should also tell them where that prospective property may be lacking, in terms of value and sale-ability. For example, does it have enough bathrooms? Does it have updated systems, finishes, and appliances? What other features should it have to compete with the highest priced comps in the area?
• Once they find a property they want to put a serious offer on, they should reach out to a building professional for some assistance in developing their renovation budget. That budget should be weighed against what the comps and the offer will be. If they do not yet have a relationship with that construction pro, they should expect to compensate them for their time. A good carpenter might bill them $70/hour; a design-build pro might run $120/hour or more. Small structural repairs and a bathroom refit with no design might be perfect for the carpenter, while a complicated project like a kitchen or addition require a design/build professional who has experience in those types of projects.
• Most property buyers do not need to have full plans and exact budgets to formulate their offer. If they come away from the discussions with a ballpark range of expected costs — with a 10-15% cushion added for contingencies that might be found once walls are opened up — they should be in good shape to make an offer.
• Once they close on a property purchase, we encourage them to reach out to those same construction pros and offer them the work on their new home. In this way, they will develop mutual trust with a valuable ally on their wealth-building team.

Guest Blog: This Contractor Avoids Bad Reviews.  Is He Lucky or Smart?

Guest Blogger: David Profitt, owner at Profitt Custom Homes, LLC is a NC Licensed General Contractor.  David’s business offers construction of custom homes and remodel/renovation projects ranging from simple decks and porches to whole house makeovers, all as a Design/Build contractor.

Avoiding Bad Reviews

Anyone who has spent much time in this business knows full well the law of averages apply religiously. Out of every 10 customers, you will have two that think you're great, one that thinks you're a thief and the rest fall somewhere in between.

I suppose the word is "thankfully", the rise in social media has been offset by the economy so the events highlighted in the Dietz lawsuit news story haven't become as widespread as they no-doubt would have otherwise. I have been fortunate that over my nearly 3 decades in the business the overwhelming majority of my customers have been well satisfied with the work I did for them. But. like everyone else, I have had a few that felt otherwise.

Lucky or Smart?

"Thankfully" may not be exactly the correct word for it, as I typically put in a lot of long hours planning every project before the first shovel hits the ground, draw out the projects in cad (3D since 2001), run structural analysis on everything affected (engineer for 11 yrs before getting into building), put only known-entity skilled tradesmen on the job, personally oversee all the projects, visit the adjacent neighbors and introduce myself before stating any project that might potentially impact them, and constantly communicate with the client.

So I wouldn't attribute the low percentage of problems to just luck, but every once in a while you're going to get that one "special" client.....

Some real examples from my experience:

• The one who, at the closing table on a completed new home, decided he wanted to re-negotiate the price and not pay for his $15k in accumulated change orders.  I went to a "pay as you go plan" after that.  
• Or the one where the client had a one-of-a-kind rooftop cedar deck built as an add-on to the original whole house remodel. She was thrilled to death with it until a trusted friend who lived 300 miles away in a totally different building-cost market told her she had payed too much for it.  Truth is I had over-charged her so badly that I actually lost money on it.
• Or the guy who wanted a financial concession out of the cabinet maker when the CM put a more expensive (turned) faux leg on his master vanity that was shown in the CM's pre-construction 3D representation. This was even though he and his wife both liked it a lot better than what they had "approved" and the price didn't change.

The more I think about it, the more I'd like to retire.

Guest Blog: What Happens In Vagueness Stays In Vagueness!

 Guest Blogger: Reva Kussmaul, owner of Remodel411.  Reva began her practice as a remodeling coach in 1998.  Reva believes that remodeling should be a 50/50 relationship and if it wasn’t cultivated as such - nightmares can occur.  According to Reva, those nightmares are typically caused by a gap in communication and it could come from either side.  For Reva it became quite obvious that someone who knew about and cared about both sides was a missing piece to the puzzle of remodeling nightmares.   So, she decided that both homeowners and contractors could use a coach when it came to their relationship - the remodeling relationship that is.  In this guest blog Reva talks about the difference between an designer and a decorator.  Check out her book: Remodel 411: Secrets to a Successful Remodeling Relationship

What Happens In Vagueness Stays In Vagueness!

I'm constantly running into consumers who, not only used the lowest priced proposal and bidder, they also want me to offer the lowest proposal to fix the work “done wrong” and yet provide the highest quality work.

I've looked at three "done wrong" electrical jobs in the past four months and one shower installed incorrectly as well. When I advise the homeowners about exactly what’s wrong and what it will take to fix it, they're blown away at my pricing.

I get very clear about what the costs are and why, even to the smallest details;  like "materials don't just appear - someone has to go to the store, wait in line, load the truck, use the gas to go to and from then get the materials to the job-site - all of which is part of the cost."  

If it’s too good to be true…

I understand home owners’  “wishin' and hopin” aspect of wanting the lowest price to work out; plus get high-quality work and having no change orders.   But much research has to be done by the contractor to know if such WILL be the case.  I always give my potential clients a possible change-order scenario regarding something that just isn't visible when going out to look at a project.  Plus, I usually have my sub go in the attic and under the house to check joists, plumbing, electrical to see just what might be change-order possibilities waiting to happen.

If he finds something questionable, the beauty of technology these days is - he takes a picture and shows it to the homeowner immediately, along with an explanation of the problem.

So, it's not accepting the lowest price that is the homeowner's challenge. It's "hoping" it will turn out the best and everything will work out as intended. Again, as I state all the time, it's a 50/50 relationship, not a one side is wrong all the time scenario. It's about clarity of communication on both sides. And, until both parties know and recognize this we'll keep hearing the stories and there will be a constant need of fixing the "jobs done wrong!"

Contractors must stop under-bidding. 

They should be honest about what things cost.  Being in business as a contractor is not a hobby, it's how we earn a living.   Homeowners must be willing to do the research it takes to find out why things cost what they do and stop wanting to get things "on-the-cheap".     I have found many homeowners who get it and, unfortunately, many who don't. Contractors can separate themselves and their businesses by helping them.

Solving this problem should also include a “how is your relationship with money” conversation; both about the giving and the receiving.  If either party is vague about their discussions about money think of it this way: 

“What happens in vagueness stays in vagueness!”

Love this industry and I will continue to move toward win/win rather than making either side wrong!

Making everything that goes or has gone wrong one-sided is to live in the problem and not become part of the solution.  I've had “homeowners from hell" and, on bad days and during some tough years, I’ve probably been thought of as a “contractor from hell".  For many of us it’s simply being human and bringing our personal “stuff” into our work.  Happens in every area of life and, truly, that is where the work lies.

I know there may be some web sites out there focused on making the contractor wrong but please keep the above in mind.   It’s a relationship and absolutely not a one-sided affair.  It’s a 50/50 and must be treated as such.

Let’s get out of vagueness!

Happy Remodeling!

How To Help Your Remodeling Prospects Make Buying Decisions

Consumers reading or watching the news are being fed information everyday about financial scandals, difficulty obtaining credit, increasing costs on just about everything, and the uncertainty of when things will improve.  Let’s face it, bad news sells better than good news, there is plenty of it and as a result consumers have a low confidence level. 

The consumer needs to have confidence

Before they will commit to buying remodeling, or anything for that matter, they need to have confidence in themselves, what they plan to buy, and, their salesperson.  Take the time in the sales process to understand their concerns so they gain the feeling that you know what they are up against.  Again, they want options, but just throwing options at them will increase their confusion and concerns about making a decision.  Work to gain their trust and confidence, not by what you say, but rather by the intuitive questions you ask. 

If you know and ask the right questions, questions that help them feel you must know what you’re talking about, and that get to the heart of the purpose for their project, as well as their concerns about it, they will come to see you as the trusted expert.  If you go about interacting with them in a sincere and purposeful way, they will come to trust you, your solution, your business, your purpose, and, ultimately their ability to make a good decision.

The consumer needs proof

A good conversational exchange may help swing a prospect over to your side, but I suggest they will need proof of your offer and claims so they can confirm any agreements and stay confident after closing the deal.  Proof can be accomplished in many ways.

For example you could provide strong references that can back up from personal experience your abilities and promises as real.  Professionally prepared project specifications and agreements that detail the project as well as the customer’s purpose for doing the project will show you truly listened and captured important details.  A payment schedule in your remodeling proposal based on project milestones can help them feel confident they will receive and actually see value as they make progress payments.  Describe for them your process for producing their project.  Let them know about your preconstruction and precompletion meetings and why you do them.  Tie several benefits of these meetings to any concerns they may have expressed during your discussions. 

Some of you may already be doing these things. 

If you are, but your still not seeing results, rethink how and when you do them.   Make sure your solutions are presented in a way that your customers can see how they address their purpose and concerns.   Don’t assume anything anymore, except that you can’t make assumptions.  People remember 10% of what you say, but 90% of what they say. If a customer says they like your solution, ask them why and seek a detailed answer.  In doing so they will hear themselves justify their decisions and you get a chance to make sure they didn’t add something you couldn’t deliver on or miss something you may already be including.  

Looking for sales training and or a sales coach? 

Contact Shawn to find out how he helps remodelers and other construction related businesses all over the country achieve the business and personal results they desire.  If you’re not earning and keeping enough money for your retirement yet he can help you change things.

Updates on the Dietz Lawsuit About Reviews On Angie's List and Yelp

The recent lawsuit by Chris Dietz of Dietz Development against Jane Perez for her reviews posted to Angie's List and Yelp have captured a lot of attention.   If you are looking for a place to find updates about the Dietz lawsuit I have created a page on my web site to share links to related articles and information.

Go to Dietz Lawsuit Updates Page

 (Click here to take the quick Dietz Lawsuit Survey)

If you are aware of related and appropriate articles and/or information please email the links for them to me and I will add them to the list included on the page.

Many contractors have suffered unjust negative reviews by disgruntled clients and consumer. This lawsuit may prove to have long term effects for all contractors.  Stay informed so you can learn about and possibly effect the outcome of the lawsuit. 

There Is A Place Where Businesses Can Review Bad Customers

The recent Lawsuit against Jane Perez by Chris Dietz, owner of Dietz Development, has certainly sparked a lot of conversation and opinion on the internet.   I first posted a blog about the Angie’s List and Yelp reviews lawsuit just yesterday and the comments started pouring in right away.   Most were from contractors who expressed their gratitude to Dietz for what he is doing.  Many of these same contractors shared stories of how they too felt they were abused and taken advantage of by unreasonable and what many referred to as “crazy” clients.   One common theme I have picked up in the comments on my site and others is the desire for a web site where business owners can post reviews about bad customers.   So I did some research to see what’s out there and I found two:

It appears that Rate My Customers is a free service, but Bad Consumers does charge a fee after a six month free trial.   

I am not recommending or encouraging business owners use either of these services.  My purpose here is to make my readers aware of what’s out there because they asked.

Here are a few things you can do at these sites:

• Post reviews about problem customers and or consumers
• Tell problem customers and consumers you will post a review about them if they do not work things out with you.
• Read about what other businesses have posted about consumers and customers before you decide to do business with them or not.
• Help other businesses avoid the “Customer from Hell”
• The data base of info at Rate My Consumers can only be searched in alphabetic order by name.   On Bad Consumers you can search by name and zip code.

Success Stories might make you feel good about leveling the playing field

Rate My Customers offers a few “Success Stories” from business that used their site.  Here are a couple of examples:

" After seeing my previous post at this website, Mr. C____ contacted us and offered to settle his debt.  We were happy to mitigate late and finance fees and he paid when he said he would. "

“Thanks for your site; the minute this woman saw her name listed on your site she called us and offered to work it out. We finally got paid. Thank You so much!"

“I am a building contractor and was contacted by a person on your "bad customer list" and was concerned about doing business with this person. When I asked him about the complaint that the other contractor reported on your site this person suddenly went crazy and it became obvious to me I did NOT want to business with him. Thanks for your web site, it saved me a big headache I am sure... "

(Click here to take the quick Dietz Lawsuit Survey)

Before You Start Reviewing

I suggest if you want to consider posting a review on either of these sites that you first consider the downstream effects of doing so.   You might want to consult with your attorney first rather than after your review generates push back from a consumer.  Also, keep in mind, if you are a business and a consumer decides to sue you; as a business you will be considered guilty until you prove your innocence.  And, you will have to cover the costs of doing so most likely without the ability to recover your legal costs even if you win.

What do you think? 

Would you post a negative review about a consumer or customer?  If you would, why would you do it; what’s your purpose?

Will the Angie’s List Review Battle Benefit Professional Contractors?

Unless they have been under a rock somewhere, most professional remodelers are now aware of the pending law suit filed by a contractor who believes he and his business was falsely accused on Angie’s List and Yelp of wrong doing by a disgruntled client.  I read the complaint Chris Dietz filed in Fairfax County Circuit Court against his customer Jane Perez.  I also read the interview Leah Thayer of D5R did with Dietz where he shared his side of the story.   Assuming the details in the complaint and Leah’s interview are true, Dietz’s story is one that unfortunately many other contractors can relate to.  The difference is that Dietz stepped up to the plate to do something about it.  He got mad and decided he wasn’t going to take it anymore!

(Click here to take the quick Dietz Lawsuit Survey)

I say kudos to Dietz!

Again, I say that assuming he has been honest about his side of the story.

He sets a great example for our industry.   We are professionals and as an industry we need to stand up for what is right.  By what he is doing, and assuming he is successful, he will be establishing a precedence that consumers cannot lie with impunity about their experiences with a professional contractor.  I think it’s great that this woman will now have a taste of what it’s like to be financially challenged to defend herself, a position many contractors find themselves in when consumers sue contractors.

In my opinion what is good for the goose is good for the gander!

According to Perez the pending court case has left her reeling and potentially facing thousands of dollars in legal bills to defend herself.  She has definitely come to realize the consequences of her actions because Dietz had the guts to stand up for his rights.  Had he not done so she would have established and or helped to maintain a precedence of “let’s bad mouth that contractor so we can blackmail him for the money we owe him”.  She took a calculated risk that Dietz would back down.   If Dietz wins the calculation of risks for homeowners who use such tactics will change going forward. 

What ever the outcome, I think consumers will think twice about posting false reviews about contractors.

What do you think; is Dietz justified and if he wins will it help other professional remodelers?