Last month in this space, I reviewed a series of market projections for 2014 from Harvard University as well as the industry’s leading associations.
Knowledge Trumps Information
Years ago, while writing about the building materials retail side of this industry, we interviewed remodelers to determine how they bought product and how retailers could better serve them.
Years ago, while writing about the building materials retail side of this industry, we interviewed remodelers to determine how they bought product and how retailers could better serve them. One remodeler bemoaned the fact that warehouse stores had educated his customers so well they knew the exact cost of a patio door that he was installing as part of their remodeling project. They saw the door at Home Depot for $900 and questioned his installed price. He couldn’t charge them what he would normally have charged because they wouldn’t pay his markup.
We continue to hear similar protests today: "How can we price a product that customers know costs ‘X’ dollars at one of the big boxes?" These retailers are not
going away, nor should they. Many of their
customers are demanding installation, and retailers are moving to answer that need. That’s sound business strategy.
But it doesn’t have to be your strategy. The answer to the pricing question is: Don’t charge for installed products, charge for the service that you provide.
That’s not always easy. Today’s consumer is well-informed. The Internet revolution has spawned an entirely new mindset: Users believe that they can find any information they want on the Web. Perhaps they can. But the amount of information out there is monumental, which has given rise to a new function called "knowledge management."
Knowledge interprets information. Knowledge is the explanation, the "What’s in it for me?" application. Knowledge is wisdom.
Your customers are collecting more and more information. Many can recite model numbers and styles
during a sales call.
Undoubtedly, they can quote the price, too.
Remodelers who run service-driven businesses need to bring wisdom to the table. Those who want to be more than price-driven installers must educate the consumer that a project is more than a collection of products installed
efficiently and on time. They must turn the information into knowledge of what a remodeling project really is. It’s a service to the client; it’s a guarantee that not only will the products be installed correctly, but also that the end project will be far more than the sum of those parts.
Your reputation will suffer if any product doesn’t perform. It won’t be the retailer, it won’t be the manufacturer. You have to show your clients that the ultimate responsibility--and it’s a responsibility that you welcome--rests with you. In so doing, you’ll bring the power of knowledge to simple information.