What's your recommendation rate with your customers?
When it comes to a major purchase, everyone wants to feel that they’re getting a good value. But what is a “good value,” really? Is it how much you receive for your money? Is it a high-quality product? Is it something even harder to define?
Like so much else in the realm of customer service and satisfaction, value is largely subjective. What one person considers a fantastic value might be a stunning waste of money to another. Nonetheless, value is important to today’s homeowners. The GuildQuality and Qualified Remodeler 2019 Customer Satisfaction Report shows that consumers rank value as the second most important service trait for home builders and remodelers.
What does that mean for you? Bottom line: If your customers’ perception is that your company is failing to provide a good value, they will not return to you when they need additional work.
Repeat customers are the backbone of a healthy business, so it’s worth your while to consider value and how you show your clients the total financial benefits they’re reaping.
Determining value in residential construction
A good way to learn more about how your clients perceive value is to survey them. Although we’re biased here at GuildQuality, third-party customer satisfaction surveying is the best way to hear firsthand exactly what your clients think of your quality of work and the overall experience your company offers.
Since value is so subjective, you’ll likely receive a wide range of responses to any questions asking about how the client views their financial investment with your company. And here’s where things get sticky.
You probably put a lot of work into determining your pricing structure, right? After all, you have overhead to consider, employees and vendors to pay, licenses and insurance policies to maintain, fleet vehicles to keep running. And let’s not neglect the fact that you’re running a business, not a non-profit organization: You need to make money.
If lowering your prices simply isn’t an option, what can you do? Let’s take a look.
3 tips for providing value to customers
If you receive customer feedback that indicates that your clients are less than totally satisfied with the value they feel they received for their money, here are some ideas to help turn that around:
1. Detail exactly what the project involves.
Depending on the project, your customer may not fully understand why a particular step is necessary—especially if the step adds to the final cost or is something other contractors usually don’t do.
Take these types of opportunities to explain the smaller details of the project and why your process will give the homeowner a better, longer lasting result. Your price point may be higher than a competitor’s, but once you explain why (in straightforward terms that your client can relate to), the value will be hard to deny.
2. Address return on investment.
Most homeowners are at least somewhat aware of the average ROI figures for major home improvements, but they may not realize exactly how much value your company’s work adds to their house.
If you can help them understand exactly how far their dollars will go based on their specific project and their specific neighborhood, the value will be far easier for them to see.
3. Emphasize total customer experience.
Homeowners hire your company because of your expertise and the experience you offer. You also save them time—and time equals money.
Discounting your prices isn’t on the table, so focus on other areas of value. Be prepared to outline the time-saving features of your processes and overall customer experience.
- Do you offer online payment options and/or automatic billing?
- If the project involves a design or mockup, can you create and share that with the customer electronically?
- Can customers reach team members via text message, phone, and email?
- Does your customer relationship management system send automatic updates at the various stages of a project?
- Can customers sign and submit contracts and other documents electronically?
Current technology—as long as it’s reliable and simple to use—is a huge benefit to remodelers, builders, and home service providers who cater to busy homeowners.
Helping clients see value instead of only cost
That final project cost amount isn’t a number you can ignore, but there are ways to maintain a wide scope when it comes to the price discussion.
Be transparent as you talk about a project’s cost and value with a client. As long as you’re not divulging trade secrets, there’s nothing wrong with letting customers know how your product markup is configured, for example. Most homeowners understand how businesses make money, and they’ll likely appreciate your openness.
Be proactive about showing clients the total value of your work and customer experience—don’t wait until the project is finished. Beginning a job with mutual understanding and clear communication about cost and value is one of the best ways to create a great customer relationship.