A CONVERSATION OF PERCEIVED VALUE
an excerpt from Facebook- author unknown
A customer asked a contractor friend of mine how much it would cost to build a small deck, and my friend gave him a proposal: $4500 labor and materials included.
The customer read the proposal and was shocked, “That’s seems really high. I won’t pay that much for that!”
“What do you think is a reasonable price for this job?”, my friend asked.
“$2500. Maximum!”, he said.
“Well, I’m sorry. I invite you to do it yourself”.
The customer answered, “But... I don't know how to build that”.
After some deliberation, my friend gave him a very fair offer, “Alright then, how about for $2500 I'll teach you how to. Besides saving you $2000, you'll learn valuable skills that will benefit you in the future?”
The customer was excited and answered, "Sounds good! Let’s do it!”
“Great! To get started, you are going to need some tools: a chop saw, table saw, cordless drill, bit set, router, skill saw, jig saw, tool belt, hammer, cement mixer, etc..”
The customer answered, “Wait! I don't have any of those tools and I can't justify buying all of these for one job.”
“Hmmmmm. Ok. Well then for an additional $300 I can rent my tools to you to use for this project. So, for $2,800 your still getting a good deal, right?”
The customer answered, “Okay. That’s fair.”
"Excellent! We will start the project on Monday, and it’ll take five days to complete.”
The customer answered, “Well, I work Monday through Friday. I’m only available on the weekends.”
“Ah, well, If you want to learn from me then you will need to work when I work. This project will take five days so you will need to take those days off from work.”
The customer answered, “Whoa! That means I’m going to have to sacrifice my pay for five days or use my vacation time!”
“Yes, that’s true. Remember, when you do a job yourself you need to account for unproductive factors as well.”
“What do you mean by that?”
My friend responded, “My hours are not 8a-5p. Doing a job completely from start to finish includes time before and after "normal" work hours. Sometimes I'm up at 6a (or earlier) preparing the estimates or to plan the project. Sometimes I'm up early to pick up materials. There's travel time, gas, set up time, clean up, and waste disposal amongst other things. That’s all in addition to the actual project itself. And speaking of materials, that’s where we will start on Monday, so I need you to meet me at the lumberyard at 6:00am. “
The customer answered, “At 6am?!! My work day doesn’t usually start until 8am!”
“Well then you’re in luck! My plan is to START on the deck build by 8am. However, to do so we have to start at 6am to get materials picked up, loaded and delivered to your job site. By the way, you’ll also need to rent a truck to get the materials to your place, since all you have is a small car.”
The customer completely overwhelmed by the amount of money and time he would lose and finally admitted, “You know, I’m realizing that a lot more goes in to a job than what a customer sees in the finished project. Your proposal of $4500 is very reasonable. I would like you to handle the project.”
When you pay for a job, especially a custom job, you pay not only for the material and the work to be completed. You also pay for:
Time to plan
Time to prepare
If you request a proposal for custom work to be done, please don’t disrespect a service provider by trying to get them to lower their prices.
If their proposal exceeds your budget, there’s nothing wrong with getting other proposals.
Just remember... you get what you pay for.