• Duane C. Barney

Are you buying what your contractor is selling?

Construction is a service business from start to finish but the potential client, in their mind, is buying a commodity. They want a new kitchen, updated bath, new home etc.; the contractor is selling services to manage and construct that home the first instinct is to sell what the customer is buying or no sale, so the contractor sets out to sell a commodity

Every business is a service business but for a contractor, unlike a car dealer, for example, the commodity at the initial sales meeting is undefined. When you walk into a car dealer the cars are there, you can sit, admire or even test drive. It has a price on the window and a decision can be made that day and you drive home in a new car. The initial construction sales meeting is more akin, staying with the car analogy, to car repair. You take your car in with a problem, they can’t tell you what it will cost to repair until they determine the problem and price out the materials and labor to complete the repair. It is called the service department.

So, the client wants to buy a home, a commodity, and the contractor is selling a service; in an attempt to close the sale, the contractor will attempt to sell the commodity
Here is where it falls apart.

Client: “So how much will it cost?”, now the contractor is typically faced with a dilemma, attempt an answer they know is meaningless or explain that they need a lot more information to provide an answer. What the contractor needs is a “commodity” to provide a price but they are a service business. Now the client is hearing that they need to spend additional money for an architect to define the commodity for pricing. Basically, that is was the architect does, turn the idea into a defined commodity, the scope of work, that can then be priced. The sales call is not going well, the contractor is not providing the answer and is instead tell the client they need to spend more money if they want the answer. This may all be true but it is not what the buyer wants to hear, A few minutes ago they were excited and “ready to get started” now they are disinterested, sales lost or at least in limbo.

What should the contractor do? Be the services business that they are; here is a client that needs service and is ready to buy, or they would not have called to meet. Explain the process in detail, be prepared with a design or selection solutions. Ask them what their budget is, you can then confirm if it is within reason; that is all the pricing you need to do or are honestly able to do at this point. Request a deposit to get started “ For a small deposit, we can get the project rolling today, working on selections and feel of your new home (clients love selections, not drawings) “nothing says commitment like a signed check” so walk out with one., and begin the design process. You may do design in-house, recommend local architects, hire the architect yourself, that is a business decision but no matter what direction it takes you need to stay engaged, interim pricing, assistance in selections if you do not continue to provide a service you could lose the sale once it becomes a commodity. Keep the process collaborative, a team effort.

This switched from a client to contractor perspective intentionally because it is important for the buyer to understand what they are buying. If you as the buyer are buying a commodity without a clear understanding of what the commodity is, the price answer you are seeking is meaningless and you have just been “sold”; you are buying a service to produce a commodity. Seek out a contractor that can provide you with the best service and management skills possible.

The First call to a contractor is like taking your car for service, not going to the dealer to purchase a new car.

We will look deeper into the architect to bid process but suffice it to say you are still buying construction services the process is just adjusted.

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