The problem is widespread: A fly-by-night operator sets up shop in your town and steals market share by undercutting market prices. In no time flat, customers both new and old are asking you to meet the new lower price.
Cleaning contractors use many strategies to combat low-ballers. For some, it’s critical to educate customers about the realistic costs of doing business, and to explain to customers the value they receive from quality service and longtime experience. For others, losing customers over price is almost a blessing. In fact, some find that customers who go with low-ballers eventually come back when they realize they get what they pay for. Here’s what three contractors had to say about fighting low-ball competitors.
“There are three or four mainstay competitors in my area who are pretty good about pricing,” says Rob Birnie, a master plumber at Thomas R. Birnie & Sons Ltd. in Hamilton, Ont. “It’s the guys who come in from out of town who lowball – charge $60 to clean a drain, and you know they can’t do that.
“You have to know the merits of your own business and what makes you better than the other companies. Our longevity is one key to fighting low-balling. We’ve been here since 1946, and we stand behind warranties that are the best in the industry. In addition, if you’re not giving value, then you’re not going to be in business very long.
“We charge full value for our drain cleaning. We’re not scared to charge the price we charge. One thing we don’t do is give a price over the phone, because you never know what you’re looking at. You have to get on site and get a look at the problem.
“I tell people that if price is their only issue, I’m not the guy. You’re going to find cheaper drain cleaners. But if you’re looking for quality work from a company that’s been in business for a long time and will stand behind its work, then camera it and make suggestions about how to avoid having the problem occur again, then let’s talk.
“We have weekly training meetings where we teach our guys how to show value for what we do when we get on site. If we give a price over the phone, they usually hang up and won’t ever call again. But if we can get to the house, we have a 65 to 70 percent chance of closing a drain-cleaning call. That’s a pretty good closing rate. We make no excuses for our price. We believe we give the best service in town.”
“We have a couple guys in my area who charge well under the norm – who check what I’m charging and go under it,” says Bernie Darr, co-owner of Darr’s Cleaning Inc., which jets municipal and industrial pipelines and does some residential pipe cleaning in and around Clyde, Ohio. “I won’t meet their prices. I figure out what it takes to make a living. We’re not going to go out and work for nothing.
“I tell customers about my insurance and my disposal costs and what it takes to run the trucks – what it costs for us to operate and make a decent living. Our service is number one – that speaks for itself. We’ll go the extra mile to educate customers. When we take a little extra time and educate them, they become more satisfied customers.
“Most of the low-balling occurs in residential work. It can be difficult to convince people they get what they pay for. It’s a challenge every day. But it helps that we’ve been around the area so long. Even if we haven’t worked for a particular customer, it often turns out we serviced the home’s previous owner. A lot of times, people are surprised that we know their situation even though they’ve never met us before.
“I succeed about 50 percent of the time in convincing people that my service is worth the price. But that works out okay, because a lot of times, it’s harder to get paid by people who argue about price. I’d rather let my competitor have those customers.”
“Our area used to be very saturated with competitors, but it’s definitely changed with the economy the way it is now,” says Lee Edwards, service manager for Told Plumbing in Pleasant Grove, Utah. “But there’s still a problem with guys who lowball. That’s why these companies go bankrupt. They’re bidding jobs for less than what I’d pay for materials.
“It’s bad on two fronts. One, they’re ruining the industry because the guys who charge correctly can’t get the work. And two, they’re driving up costs for materials because they leave supply houses with thousands of dollars in debt when they go bankrupt.
“We’ve been able to combat low-balling by explaining to customers the service they get with our company, and that we’ve been around for 15 years. We’re the best-known plumbing company in our county, and we’ll still be here in a year to warranty our service if something happens. For the most part, that’s enough to convince them.
“There always are people who will strictly take the low price. But there also are a lot of people who’ve been burned by taking the low price. Then they call us and we earn their business. I let people know up front that we won’t be the cheapest. I tell them if they want the cheapest price, call a fly-by-night operator – then call me when his work fails. You get what you pay for.
“I’m usually better off without a customer who makes decisions based only on price, because they’re probably going to be a pain in the neck. Anytime someone wants a discount, that’s the job you’re going to have a problem with. Plus they won’t be a long-term customer who’s looking for quality.”
