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The Successful Home Builders' Newsletter Archives...your library to profit-building articles.

Are You Over-Qualified or Under-Communicated?
It's interesting how things happen in 'themes'. I had three separate discussions over the last couple of weeks with builders concern their work is 'under-appreciated' by their target market...and wondering if they should be looking for a 'higher end' market.

Of course, that may be one solution...but it's too easy to just say "if they have more money, they'll be less arguing about price, value, etc." Especially if a recent discussion with a builder doing multi-million dollar additions and renovations is any indication.

Working with some pretty high-end clients, he's still asked to negotiate his price down -- being compared with competitors who'll do the job for less (although the end price tends to always creep up...not an unfamiliar situation, is it).
$100,000 or One Million -- It's All the Same
Granted, most builders and renovators on this list AREN'T doing multi-million dollar additions (although some are), but this just highlights the problems exist at all levels.

Why?

Because we all deal with human beings...and human beings want to know what they're getting for their money -- AND, in the absence of any *perceived* difference, the easiest measuring stick is the cost.
So, Are You Over-Qualified...or Under-Communicated?
I would tend to argue, when someone talks about building 'above their market', there's actually three potential reasons why their prospects are going elsewhere:
  1. the owner doesn't see the value difference between you and your competition, therefore goes with the lower-price, even though you deliver more (in both product AND service)

  2. you're adding cost to the project the owner doesn't value (and, therefore, doesn't want to pay for); and/or

  3. (tied in with #2) yes, you ARE over-qualified for that market, and you need to re-focus on a more suitable niche.
#1 -- You're Under-Communicating
If the prospect doesn't know the difference between you and the other guy, they'll perceive there is no difference and, just like buying two of anything to same, why would you pay more?

You've got to make sure you're communicating "why pay more." (And, again, communicate the BENEFITS not just the features -- if you don't remember that discussion, go back to my 5-part eCourse, or sign up for it at:

http://www.SuccessfulHomeBuilders.com

Don't just go with the stand-by "we build quality" or "we have great service" -- if I called all of your competitors and asked "do you build good quality? do you have great service?" how many are going to say "no...no, we don't do that"? Not too many.

Instead, be specific.

"We're available between 10am and 2pm Mon. to Fri. to deal with client calls ONLY."

"You won't have a problem with our {enter any product here} for at least XXX years, or we replace it free of charge."

Know what your market wants, and communicate it to them in specific terms, so they can compare apples-to-apples...not just dollars-to-dollars.
#2 -- You're Over-Valuing
Again, this falls under knowing what your market wants, and values.

If you're laying a 2x6 where a 2x4 will do (and you're not breaking code) and the client could care less, you're giving them more than they want...and, when that happens, guess who pays for it? The client won't want to.

If you're super-insulating all walls against sound, and the client doesn't mind a little bit of noise penetrating the room, again, you're wasting time and money.

Remember, you're building a home for THEM...not YOU. Obviously, know what code is, and build at least to that level. Also, know where it's better to go above code (and how much higher) and COMMUNICATE it to them (see #1 above).

Finally, in communicating with your market, also know what they DON'T want, and don't add it in because you think they need it. If anything, provide it as option that your market can choose on a case-by-case basis.
#3 -- You're Over-Qualified
Finally, if #1 and #2 doesn't solve the problem (and I'd bet for 95% of you it does!), then, yes, you may be focused on the wrong market. Find who does want what you're selling, and give it to them (again, using the techniques described in #1 and #2 above).

But, remember, it's easier to sell what someone wants, then find someone who wants what you're selling. Chances are, you're on the right track...you just have to make sure your market:
  1. knows what they're getting (communicate!); and

  2. isn't getting what they don't want (over-valuing... costing you money -- also known as *your profits*)
Helpful Tools and Events
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http://www.SuccessfulHomeBuilders.com/Coaching

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