I have a wonderful story about good marketing. It’s about a barber who has a successful barbershop until a discount hair salon moves in next door and offers haircuts for $10. After building a business for over 20 years, the barber feels he’s going to lose what he has developed over that time. As several of his customers begin to sample the services of the discount barber next door, he calls a marketing expert. He explains what is happening, and the marketing expert says, “I know what to do”. The very next day, the marketing expert shows up with a new sign that is posted in the barber’s front window. It says, “We Fix $10 Haircuts!”

Does any of this sound familiar? Are some of your project estimates being undercut by discount pricing offered by other remodelers? I hear these stories a lot. Again and again, I’m hearing about estimates that are not only for less but that some of these estimates are for less than the actual job cost. Forget about making a profit. How will they pay for the job?

These discount contractors won’t be in business for long. Their lack of business expertise will take care of itself, and some unsuspecting homeowners are going to get what they paid for. To address this, let’s go back to the very first sales call to see if we can assist homeowners with their buying decision. There are ways to respond to low estimates, and it’s not by lowering your prices.

Homeowners have only been taught one way to differentiate contractors — price. It’s our job to move them away from price and demonstrate value. Here is a simple question: Are all remodelers created equal? If not, what differentiates them? When I was a design/build remodeling contractor, I wanted prospective customers to see how I did business. I let them see this through my presentation portfolio, which contained the following sections:

• Company brochure/bio.
  
• References and testimonials
  
• Completed pictures
  
• Sample design agreement
  
• Preliminary design schedule
  
• Sample construction schedule
  
• Sample memo forms
  
• Project specifications
  
• Sample change orders

Let’s review each. Your presentation materials need to demonstrate your value. Do your presentation materials show prospective customers why they should work with you?

The company brochure tells your story. Where did you come from, what do you know, and what industry-specific education have you received. Simply, what qualifies you to work on their house?