You’ve probably heard the news: Houzz, “the world’s leading platform for home remodeling and design,” has launched an app called Real Cost Finder. The tool pulls actual cost data from more than 100,000 homeowner survey respondents to provide Houzz users with the “real cost” of a completed project in a specific area. The tool is designed to “empower homeowners to make the best decisions for their projects” by giving them a price.

Comparison Shopping

Years ago when I sold cars, you could make money as a car salesman. The Internet changed things in the car business. Customers would walk in knowing what a car costs.
The change was huge but the auto industry adapted. If a customer knows what that Honda costs and your price for it is significantly higher than the other two area dealerships, you’d better have a rationale, such as a service package or extended warranties.

Home improvement companies have never had to face this kind of challenge before. Here’s our argument: Every home improvement job is one-of-a-kind, so the cost will never be the same. But now Houzz can tell you what that shingle roof or fiber-cement siding job costs in the next town over. If the proposal you’re handing the homeowner cost significantly more, then you’re pretty much out of the picture. So you’d better be prepared to convince the homeowner why your company, and the quality of your work, are superior and worth the price.

Data Driven

If you sell based on the idea that homeowners don’t know what it costs to repair or alter a house, it’s time to scrap that. This isn’t going away. The trend now is toward collecting and collating data.

You might be thinking that the Houzz app gives Chuck in a Truck — the low-to-no overhead guy selling on price — the advantage. On the contrary, it’s an opening for the company that installs quality products in a quality way and sells value-added. Some homeowners would pay twice as much for a roof we put on as they would to have a roof replaced by a one-truck operator because we sold the manufacturer’s warranty program that included a 40-point inspection.

Price Buyers

Chuck in a Truck is always going to be there. So selling the job comes down to the customer you’re dealing with. You need to identify what kind of buyer they are. If they’re a 100% price buyer — that’s maybe one in five — they’re probably not your customer anyway and it may be time to move on.

Have I swung a couple of those kinds of buyer? Yeah. And I did that by pointing out that price buyers are twice buyers. If my price is $5,000 and the other guy’s is $3,000 and the homeowner says $5,000 is a lot of money, I point out that $3,000 is even more money if the homeowner has to spend it twice to replace that new roof in a few years.  —Sales veteran and trainer Mike Damora has been the sales manager at several large home improvement companies. Reach him at madamora@optonline.net.