Serfing USA

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“An interesting dynamic has been playing out since the economy has been in the tank,” a remodeler emailed me last night. “We get these prospects who say, in essence, ‘I know your business is hurting so I want a deal. I want a deal where your margins are lower.’”

Consider one couple: dual six-figure incomes and an inexpensive house in a nice neighborhood. They showed the remodeler an estimate they had received from a sole-proprietor cabinetmaker who charged $35 an hour and didn’t mark up any of his costs. They needed a new cabinetmaker and installer because the cabinetmaker had closed up his business and gotten a job at a university.

“I spoke with the cabinet guy and let him know our regular markup was 1.67,” says the remodeler. “He was shocked. The buyer was too. She was shocked and mad that this tradesman had to take a real job, and that our company was going to cost twice as much” and would require permits, documents, and the client’s attendance at design meetings.

The remodeler also faced this cringe-inducing situation recently. “An architect told us, straight out in front of the client, ‘I know your business is hurting so I want the lowest price for my customer. I want to take advantage of your industry's difficulties to get the best price.’”

And then there’s a current client, “a CEO who wants to treat us like barefoot tradesmen.” The remodeler describes the client as “a prince” who “likes a dust-free environment and hates to have people working in his workspace.” Tensions are running high because, well, in remodeling there is dust, and because the remodeler is “pressing him to help us stay on schedule since we found him $100,000 in savings.

“He would prefer to deal with a crusty, hard-drinking, barefoot tradesman than me,” speculates the articulate, educated, well-dressed remodeler. “Then he could feel superior to the tradesman. These folks want serfs."

What about you, remodeler-readers? Have you also felt that you’ve received the brunt of others’ financial anxiety and anger lately? When homeowners, architects, or anyone else treats you and your fellow tradespeople with disrespect, how do you respond with dignity? How do you feel good about a relationship when you sense that others devalue much about you?

Please comment here, or email me directly at lthayer@hanleywood.com.

Leah Thayer, senior editor

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    Comments (10 Total)

    • Posted by: Anonymous | Time: 4:29 PM Tuesday, July 21, 2009

      In regards to Serfing USA. This is nothing new. I dress well and present a professional image when meeting clients. Despite that I have had people ask if I would trade work for a television set, 3 legged chair (one was broken off) and honest to God, a pair of hardly worn men's shoes. Also maybe I could do the job or have my men do the job in our free time for extra money. My favorite is "I was a carpenter in college", its hard not to answer back something like, "is that why you make ignorant statements like the one you just made"? This will not go away and until we have standards that everyone agrees to we will be dealing with this. The bigger issue is all professions have seen a slide to the "Its not my problem" mindset, and other people who are unfulfilled in their careers need to have someone lower than them to feel better about themselves. My latest HaHa moment was the women I met for a small kitchen makeover. She needed it done during her vacation so she could watch and make sure we did the job correctly, and she assured me she would be with us at all times. That one was easy to handle, In an even voice I said, "that won't be necessary because I'm outta here now"! And I was.

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    • Posted by: Anonymous | Time: 3:18 PM Tuesday, July 21, 2009

      Jewed down! Wow! I didn't know people still used that type of ignorant language anymore. I'm sure you just forgot you weren't in the trees with the other monkeys at the time you wrote that.

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    • Posted by: Anonymous | Time: 2:42 PM Thursday, July 16, 2009

      We have experienced the same phenomenon here in Sacramento but only from a certain sector of the market. The sector is not defined by income but rather by mindset. There are clearly those who expect to get the deal of a liftetime from this downturn and they seem to care little about the welfare of the builders and their employees. There are still, however, many homeowners who prefer service, quality and ongoing relationships over the cheapest price. A local prominent architect performed a huge disservice to all of us when he wrote an article in the newspaper citing remodeling costs as much as 45% lower than the historic pricing for our region. This further spurred the feeding frenzy in some of our homeowners and led to many explanatory discussions in meetings that followed the article going to print. The architect failed to mention that the case studies he used were highly unusual, involved jobs where many favors where performed for a variety of reasons and where homeowner involvement was high. In essence, a large percentage of the jobs were not actually performed by the general contractor making the writer's study essentially meaningless. We do not respond well to the "you should be lucky that we are offering you work" mindset and attempt to quickly clear that up with clients, usually on the phone before going to meet at their homes. Things have been so bad for so long that there are increasingly fewer of us in business. We use this sad turn of events as a cautionary tale with our clients by reminding them that businesses must make money in order to fully serve their clientele. For the clients that we ultimately work with, this is often all it takes. Best wishes to all, Jonathan Mills Mills Builders Inc. www.millsbuilders.com

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    • Posted by: lthayer | Time: 11:35 AM Thursday, July 16, 2009

      In the further interest of sensitivity: service providers, such as marketing agencies, have told me they've heard the same "you're hurting so I want a deal!" argument from remodelers. We might all benefit from trying to see both sides of business transactions. Thanks for the comments, all.

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    • Posted by: Michael Anschel | Time: 10:30 AM Thursday, July 16, 2009

      Wow! I have seen a lot of things in the comments section of this site, but this is the first time I have seen an anti-semetic view voiced! Ketchum I really hope that your Jew bashing comment was un-intentionall and that you were somehow unaware of what that word meant. There is no place for that kind of thinking here any anywhere. The construction industry is full of small minded thinking and I have heard every kind of racial, ethnic, mysoginistic slur on the jobsite over the years, and I continue to be shocked by the ignorant individuals our trade harbors.

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    • Posted by: Anonymous | Time: 8:46 AM Thursday, July 16, 2009

      Dear Mr T Ketchum, Your statement; "Although sales are slower and slowing I can't say that I have been jewed down or even ask to go down in price and we are one of the higher end companies in the area?" ... is a black eye to clueless rednecks everywhere. Please engage your massive macho brain before you type. Yours in The Glamorous World of Remodeling, Diane Menke Myers Constructs Inc. www.myersconstructs.com

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    • Posted by: Anonymous | Time: 8:41 PM Wednesday, July 15, 2009

      My wife and I operate a Home Improvement busisness in Maryland. I have enjoyed improving my product as a craftsman for 42 years. Although we are very confident in our ability to surprise our customers with a superior product in remodeling, we have found it necessary to hone our skills as marketers in order to present our product in the same way we perform our service. Honesty, to the point, matter of fact, are tried and true methods that have long survived the test of time in any environment.

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    • Posted by: TKetchum | Time: 4:22 PM Wednesday, July 15, 2009

      I tell the customer at the first meeting that our price is "fixed". We won't ask them for money if we loose money on the job and they can't ask me to reduce my price. And that if they want to lower the cost we will have to investigate different products or scale the project back all together. I go on to explain that if we reduce our costs we would have to reduce our quality and we would rather not complete a project if we can't make it to quality standards. (and try to let them know that will benifit their pocket book in the long run) Or something like that.... Although sales are slower and slowing I can't say that I have been jewed down or even ask to go down in price and we are one of the higher end companies in the area?

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    • Posted by: gantonioli | Time: 4:11 PM Wednesday, July 15, 2009

      First of all...love the title. Fortunately, we haven't directly experienced this, though I've read articles in the NY Times and Boston Globe encouraging homeowners to go for the contractors' jugular. We have developed a pretty good sales process that weeds-out the bad fits...including almost all architects.

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    • Posted by: Michael Anschel | Time: 4:09 PM Wednesday, July 15, 2009

      After reading your post I immediately thought of this great video that explains the vendor client relationship. If I could only send this video to any client who asks to see the breakout of pricing, tries to negotiate down the price, and ask us to throw something in for free.

      It takes a great deal of strength to stand up straight in an economy like this , but bending over is not doing a service to you, your staff, your trade partners, or your clients because you will most likely be out of business and unable to warranty their work.

      The client vendor relationship

      And for those of you in the Design-Build world you will enjoy this added bonus. I’m sure it will have you nodding your head in total agreement and understanding.

      When you let your clients guide the design process

      Designing a stop sign

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    About the Blogger

    Leah Thayer

    thumbnail image Leah was a senior editor for Remodeling magazine from 2004 until June 2010. She is a lifelong fan of small businesses and grew up in a builder family. Prior to joining Remodeling, she wrote for and/or edited extensively for professional audiences, focusing on business management, health care, and marketing. Email: leah.thayer@gmail.com. Twitter: @leahthayer