Value vs. Price myth

[plainpainter 217]

How often have you come across a customer and submitted a fence restoration proposal - and they exclaimed - 'That's nearly one third the price of new!!!!!'

Invariably this situation nearly always ends in the customer not going with the work. And what have we done about this? I have seen folks talk about how fence pricing is totally different animal and you just have to quote if for a lot less - wait hold on, it's the same work as deck resto - yet folks are resigned to getting a fraction of the price due to the perceived value being way out of wack of the price of a new installation.

Let me tell you a little story about my Dad's '94 Jeep sport cherokee - firstly my old man loves that vehicle - he bought it new for around 17k. And over the years he has always got it serviced and repaired but over the now 15 year life - invariably some repairs have been extensive work. He had the heater channels replaced on both sides along with some painting - but the floor was rotting out - and the dealer said it's days were numbered, and they didn't that work. Finally I found an automotive shop a year or so later in the dead of winter - without work. And these guys replaced the whole bellypan front to back - major F'ing surgery. One of the guys even looked straight into my Dad's eyes and asked him if he really wanted to put this much work into at the time 12 year old car. My Dad was adamant - the guys were so thankful for the work, they did it for $25/man-hour and parts for cost! They must have done like 5-6 thousands of work for $2300. There was the time my mom backed the jeep into a chain link and destroyed the hatch - a new one was put in and painted. The Transfer case leaked to empty and burned out - so I brought my dad to a really good transmission shop with 40+ years in the valley - with a good new one installed. Then My Dad hit a dear and used the remaining collision to get his whole front redone.

the point is there were 5 or 6 times during the life of this vehicle that the repairs was worth more than the value of the car once fixed. My sister said to my Dad that it didn't make sense - that he should buy new. And he told her just because the repair is more expensive than the worth of the vehicle - it isn't logical to assume that buying a new car makes more sense. He told her he'd rather spend 3 thousand on a car worth 2 thousand than go plunk down 28 thousand for a new car.

What's the end result? He has maintained a car for 15 years - it still runs great - and if you add up all the costs over the years it's much less than getting a new car every 7 years or getting into leases.

I had another friend buy a subaru for $500. He then went to his friend that is a mechanic and told him to pretend he was going to take the car cross country - and it absolutely couldn't break down. Well he spent $2,500 in parts and labor. What was the result? Four years of uninterrupted driving and still going strong.

You see what does the initial sale price have anything to do with the maintenance of the product? If you don't maintain the fence - it grows grey mildew and fungus attacks, lichens grow - and it rots and looks ugly - and then gets torn. Some folks may tear after 10 years, some 15, some folks will let it dwindle for 40 years. In each case - it has no bearing on the value of restoration and maintenance of said fence. Folks who buy into maintenance and restoration - get a completely different life cycle, perpetual beauty of nicely maintained fence - and never ending life. Isn't there value to that?

And let's examine that installation cost? Did that truly represent the total cost? How about all those tire tracks into the sod from all the trucks driving onto the property? How about all the flower beds torn up in the process? And all the costs of paying a Designer to design, install and maintain a new garden? It probably adds up to a whole lot more.

In the end when someone starts talking price between restoration and the price of new - it's exactly like comparing apples to oranges. It has more to do with what kind of 'product' they want. If they want a nicely maintained product that won't force them to upheave their yard every 15 years - then there is a price to pay - it has absolutely nothing to do with what they paid for the initial installer to install the fencing. You could make the argument that restoration could cost three times as much and make sense. The two things have nothing to do with each other - and so should not influence price. The cost of installation is simply the initial cost of having a fence - it's the cost of getting in the 'game'. But there are other costs - and if a homeowner doesn't want to pay - it shouldn't influence our decision of how to appropriately quote it. Now this isn't to say perhaps its smart idea to charge for estimates, since there may be a high failure rate - but why lower price when homeowners have no idea the costs of future maintenance?

[Doug Dahlke 114]

I don't do alot of wood but have run into the same thing. People see the quote and can't believe the price. I quoted a pool deck for an above ground pool. Wood right next to the pool around half the circumference, several different stains on it in different stages of failure, lattice around the outside of the whole thing and part of it had what looked like a polyurethane coating.

I did several test areas and some of this stuff didn't want to move. I figured there would be a lot of sanding invloved plus extra prep to protect the pool and water. Gave them the quote, they declined and this is a customer I have done other work for including a complete exterior repaint a few years back. People just don't get it when it comes to wood.

[James 624]

Before I do any testing now I find out how serious they are and how much Green they have to spend. I've always been a Green thinker as part of my Wood Restoration Philosophy.

[plainpainter 217]

Before I do any testing now I find out how serious they are and how much Green they have to spend. I've always been a Green thinker as part of my Wood Restoration Philosophy.

Jim, do you ask up front what their budget is?

[Beth n Rod 1,279]

I have found that asking about their budget is like asking them to reveal the ace up their sleeve. Most want to keep that part to themselves as experience has taught some that it is part of the bargaining process. Unfortunately, most do not realize that bargaining is not a very good strategy with a company that has learned how to price their services and maintain a margin.

I ask instead: "what were you looking to spend on this project." or "Did you have an idea of how much this would cost?"

Questions like these are indicators of perceived value.

Overcoming perceived value is a matter of tactfully educating the customer if their perception is unrealistic.

With fence restoration especially on the large ones the calculations can amount to a huge price. A sliding scale works best and the cost is usually lower per sqft than a deck because the work is so much faster and easier.

Trying to convince a customer that has a 600 sqft fence vs a 400 sqft deck the price is justified is comparable to looking at a shed vs a house.

One just looks like more work yet the fence will be done before the deck believe it or not.

Now proceeding from your initial statement of the fact that they are so in tune to the initial price of the fence means that the fence is a source of pain for that customer and you have to find out why that pain is there.

* Was it put up under duress from the spouse?

* Did it take away funds from something else they wanted to use it for? (vacation, etc)

* Do they have problems with people encroaching on their property?

* Do they have small children they are trying to keep safe?

* Is the prospect of maintaining the fence keeping them from spending the money on other priorities?

Whatever it is, there is pain associated with this fence and you have to get the customer to tell you what that pain is and in the process, a series of well placed questions can get them to overcome their own objections.

It is possible that you would during the course of the consultation come to an understanding that would help you to tailor your services to meet their needs at a price they are willing to pay. It may not be the whole enchilada but a chance to develop a relationship none the less.

Rod!~

[lipw 14]

I guess I am very lucky to never have that problem, I have a set price per section to wash and another price to seal or stain so when the customer calls I tell him I can give a price over the phone and Im explain that the price is xyz per side wash and the price is xyz to seal or stain, She then tells me that I am higher priced thanthe last guy quoted her, I then explain what kind of pressure we use and equiptment we use is made for that type of work and at that point they book the job. Now heres the important part when you get there if Mrs Jones does not know how to count you do not make a big deal over 1 or 2 half sections because she just saved you time and gas from doing the estimate in person. Now if she does not book the job over the phone no loss because she is a shopper and looking for the job to be done for nothing... Let the next hack she calls do it for nothing you are better than that MAKE YOUR MONEY don't give things away or you will be out of business in no time. This is a business not a hobby treat it like that and you will make the money you need.

[Joe Ortiz 14]

I ask what else they have planned for their property and what there looking to spend. that gives me an idea of how much they wanna spend on a total project.also ask if they have started looking for contractors."Why" they ask? I tell them throughout the years I've made good friends with cotractors and i can recomend for one to come out and give you an estimate. that will give me an idea of how much to charge for the job. but most times they wanna build a house for $10k. a lil trick i learnned working as a sales coach @ best buy. works most of the time for me,+ the contractor gives me 10% for the job leed.

[divine190 14]

Would say every fence signifies a potential customer.If not now they would look out for the maintenance job some time soon. keeping a track always helps, and designing different packages so as to suit particular requirements helps too. Customers are obviously smart enough to guess if the service being offered is really needed, authenticity decorated with sales pitch really helps.