Anytime a group of contractors get together, have you noticed that it only takes a few minutes for the conversation to get around to how low-price competitors are making it difficult to do business in their market? It doesn’t matter what the market is or where it is. The topic is always, “How can we compete with these low priced competitors?” Seldom, if ever, does the conversation get around to the fact that perhaps rather than trying to compete with the very low-priced competitors, we would be better served by providing our customers with greater value for the money that they are spending with our company.
I recently attended the SMACNA Convention at the Broadmoor Hotel in Colorado Springs. And while this may sound like a promotion for the Broadmoor, that is not really my intention. The point that I want to make is the owners of the Broadmoor long ago determined that they were not going to be able to compete with the low-priced motels down the street about a mile. Therefore, they determined that their strategy would be to provide a superior product with superior value to that provided by the standard hotel/motel. They also determined that they were going to set their pricing based on what it would take to provide that extra value, rather than set it based on their so-called competition.