Hot Town!

Summer in the city!

106 in Minneapolis last week.  Oy!

Can’t let the blistering heat go by without this 1966 classic from the Lovin’ Spoonful.  Honestly, how many bands had more sheer fun with their music?

And speaking of fun, we’ve reached the end of our review of our 35 question quiz on Price, Value, Customers and Hydronics (review here).  I hope the process has been useful to you, and that maybe you’ve been able to challenge some preconceived notions about what motivates your customers. So without any further ado, here it is, the last question:

35. When I lose a job, it’s usually because my price is too high. Hmmmm…..

You don’t get the job because they went with a lower-bidder.  Clearly you lost the job because your price was too high.


It’s an obvious conclusion, but it may not be the right one. Price may be the reason they give, but it’s rarely the reason.  As we’ve explained during this exercise, it’s simply not logical to conclude that price is the only deciding factor, or even the biggest. If it was, then the one contractor with the lowest price would get all the business there was to get. Everyone else would be S.O.L.

Look around you.  LOTS of contractors are getting jobs even though they’re not the low bidder.  And they’re doing it in this economy.


For starters they know price is pretty far down the list of decision-making factors.  As mentioned in a previous post (read it here), research (and logic) ranks the five factors as follows:

  1. Delivery
  2. Professionalism
  3. Service
  4. Quality
  5. Price

Next, those contractors know their costs, price jobs accordingly (no “going rate” nonsense) and aren’t afraid of their prices.

“That’s right Mr. Johnson; we are 20% higher than our competitors.  We’re almost always 20% higher than our competitors.  We get lots of jobs at these prices, and our customers are happy to pay us these prices for the following reasons…”

These contractors are also ready and eager to provide a litany of reasons why their existing customers pay “these prices.” They also back up those claims with proof via customer testimonials.

And these contractors understand the fact this entire conversation is even happening is proof-positive the prospective customer isn’t a “price-only” buyer.  If price was all that mattered, why would any conversation with anyone other than the low-bidder take place?

Logical, no?

So why, when you lose the job, do they tell you it’s because your price is too high?

Maybe you came in with a high price but couldn’t back up your claims of superior service or quality.

Maybe you talked more than listened.

Maybe you were late for appointments and didn’t call.

Maybe you didn’t shave or clean up before meeting with them.

Maybe they were looking for super-high efficiency and you only showed them what you thought they “could afford.”

Maybe you didn’t do enough to differentiate yourself from your competitors and they decided “good enough” was, in fact, good enough.

Maybe you didn’t demonstrate “return on investment” in terms they could appreciate.

Maybe you couldn’t do the job on their timetable.

And, of course, maybe they went with the low-bidder because they simply didn’t have the money.

Or maybe they’re just plain-old cheap.

You’ll note most of that list requires a contractor to look in the mirror and take some personal responsibility for the situation.  That’s hard.

The last two reasons on the list, however, allow us to assign blame elsewhere. That’s easy.

“People are cheap, price is the bottom line! People don’t care about quality, only price! Crappy low-ball contractors and handymen are killing the business!”

I get that it’s harder now, and that “this economy” is making everyone a little skittish about their money. It’s for that very reason we prepared the 35 question quiz and went through the exercise of examining and answering each question.

Cutting your price (because everything costs less in a recession, right?) may get more jobs, but at what cost to both the short- and long-term health of your business?  As Larry Steinmetz teaches us, business – even contracting – is a game of margins, not volume.

Sell your jobs at a healthy margin and that will be one big lovin’ spoonful of magic for your business!

And speaking of magic, I started believing in it when my then 14-year-old daughter made me turn up the radio when this Spoonful classic hit the airwaves. And she new the words!

John Sebastian on lead zither? A roomful of dancing cheerleaders?  I believe! I believe!


Leave a Reply

You must be logged in to post a comment.