In my former job as project manager, a lot of our clients – say 2/3 – had something (bad) to say about how much the job cost. Not good.
I guess they figured they could complain to me because I wasn’t the salesman. Well, whatever. I always wondered why they signed the contracts if they thought the value was poor. Bad for referrals, no matter what the reason.
So I’d say my former employers were:
1. Selling to the wrong market, or
2. Over-priced. Or both 1 and 2, I guess.
They’re going out of business, now, after 22 years. I’m going into business, so this has provided a LOT of food for thought. Competing on price seems reckless and self-defeating, though.
All I can come up with is that they should have invested more into advertising to rich people. One woman spent upwards of $100k remodeling her master bath alone, and kept rattling on, to me, about what good value she was getting. $3k for her shower plumbing trim. It was weird, but she was paying my mortgage, so WTF did I care.
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As a former engineering PM, I can relate to having to listen to clients complaining about the cost. In a couple of my jobs, I had the authority to require that the sales person maintain contact with the customer throughout the job.
This often gave me a heads up before a minor problem became a major issue and also gave me another communication link to re-sell the job.
how was the companies customer service record? Were clients satisfied with the project they were receiving and the service they were receiving? Were there other complaints either before or after they mentioned price. Did anyone ask them why they thought it was expensive.
Was it a fixed price contract or Cost Plus or T&M? How often did the projects end up costing the customer more then they had originally anticipated spending?
What was the remodeling process like for them to live through?
Cost may have been a secondary issue that crept up as problem resulting from issues created elsewhere. If they were not satisfied or delighted with the over process and project it may have lost value in their minds making it seem to expensive for what they were receiving in return for the money.
What caused the company you worked for to go bankrupt?
What always struck me as odd was:
- it was a fixed price contract, and
- our service was OK. My boss was meticulous when it came to cleanliness on site, so that became my baby. Our subcontractors were, at least towards the client, fairly professional.
Very few of our jobs were completed on time, though. I'll take responsibility for that - it was my job - but I was a total newbie and there wasn't anyone to back me up. The office made lots and lots of errors. It didn't help that their practice was to order everything before I had a chance to look at the file - so no double-checking.
It also didn't help that, although I was in charge of scheduling, they were in charge of me, which they took to mean that they were in charge of scheduling too. Sometimes the board started to get a little schizophrenic.
Why did the business go bankrupt? Too much overhead, not enough real analysis into controlling costs. They definitely couldn't afford to have me on staff, and they lost money the entire time I was working for them. My position should never have been filled, let alone the design assistant they also had. She was rarely busy; hundreds of man-hours went down the drain that way.
you forgot:
3) they were a legal legitimate insured company competing in a market saturated with bootleg contractors who flaunt the laws of legal contracting and legitimate payroll and who risk their own and their clients homes and equity by failing to carry liability insurance.
CaliforniaRemodelingContractor.com
Biff Loman,
You've discovered a secret known to only a few..
The profit isn't in the steak it's in the sizzle..
Figure out how to build cost effective buildings. and bid on that basis,, the change orders as they add the gold plated toilet seats and electric dog dish warmers will provide you with a nice living..
Always get signed change orders.. no matter what! Always tell them what things will cost and don't go over it, but they won't /can't shop you, so make sure it's profitable for you when you give a number..
I used to sell my telehandlers that way.. I'd match anybodies price on an apples to apples deal.. then once the deal was signed I'd sell features that would improve their profit and efficency at a price that allowed me to earn a fair living..
If I only sold basic telehandlers I wouldn't make as much money as your newest grunt makes...
Edited 12/29/2007 1:56 pm ET by frenchy