August, 2009

Make Money Selling Quality

The best materials may not be the cheapest in the short run—but they are in the long run.

By Bob Heidenreich

I saw a sign the other day that said, “Pick any two: Price, Service, or Quality.” You can’t usually have all three.

When I started my career building decks years ago, I had the idea that the price of the materials I bought—and finding those materials as cheaply as possible— was my key to making money.

I used to make a spreadsheet that showed all of the prices from every lumber supplier in my area for the materials I most often used—2x8s, 2x4s, and so on. I would then find the lowest price on that list, and go to that lumberyard and say, “this is what I expect to pay for this product.”

What happened was that I usually wound up buying from big-volume suppliers where quality was often erratic, but they would meet my low price.

It took me a long time to realize that that low price was not what I was looking for. What I really needed was consistent deliveries and consistent materials, since that saved me time, and saving time made me more money since I could build more decks.

Today, the first thing I do when I meet with a contractor about a deck project is try to teach them that there’s a difference in the quality of materials. They think that they’re looking for the lowest price, but what they really need to focus on is the quality of the materials, since buying quality is really a very small percentage of the price of any job.

I remember one contractor who came in and looked at our materials and found out our pricing. I showed him our quality, and explained why we charge more but are worth it. He thanked me, and I didn’t see him again for a few months.

He then came in again, asking me a lot of questions. He told me that after we’d met that first time, he went somewhere else for his materials because they seemed to be cheaper. What he found out was that in the long run, he was missing materials from his bid, and the quality wasn’t consistent. He realized that that cheaper price was actually costing him more for every job.

Good materials save you time because you don’t have to sort through substandard pieces, or run around wasting time trying to solve problems. That means a deck builder can be more effective.

If we can get our contractors to build even one or two more decks a year by supplying them with higher quality material, they’ll make more money. (Labor always costs more than materials.)

If price is all a customer is interested in, we probably won’t ever be the cheapest. But I show customers some of the added value we provide as part of our pricing, as well as the quality goods we sell. It’s been proved over and over that you can only consume so much in materials in a certain amount of space, and I can help my contractors learn to recognize that, and bid better.

If a contractor can quote a job while still at that first customer meeting, they can often close the sale right there: “Cedar is going to cost you this much; composite will cost you this much.” And then the customer asks them, “How do you know that?” And they can answer, “Because I’m an expert. I’ve done this over and over, and I know exactly what a specific type of deck will cost.”

BOB HEIDENREICH is the owner of the 30-employee The Deckstore, in Apple Valley, Minn. He has been selling decking and home improvement projects for 26 years. Follow the Deckstore: twitter.com/TheDeckstore.