How Much? Price Conditioning in Remodeling

Don’t you hate it when customers ask for a cost breakdown? Most remodelers do, but I’ve been hearing from some professionals who are turning away from the take-it-or-leave-it approach toward something that’s more ... I believe “transparent” is the buzzword I’m looking for.

At the root of the trend (if that’s what it is), is “price conditioning,” which is taking place these days in a variety of ways. Houzz.com, a favorite remodeler lead-generation tool, offers visitors the option to search projects by price range ($, $$, $$$, $$$$), and the site’s reviews typically include price information. Remodelers seem to like all of that because it “conditions” homeowners with a sense of how much things cost. What they don’t like is the site’s retail store. It’s the breakdown thing again, yet it’s hard to argue that it doesn’t also help condition homeowners on price. But let’s face it, there are a hundred other websites a homeowner can use to find out what the stuff you’re putting into their project costs.

Some remodelers are also doing their own price conditioning. Thanks to a recent presentation I saw by marketing consultant Kyle Hunt, I learned about the “How Much?” tab on the website of Nate’s Custom Renovations. As a way to deal with customer sticker shock, Hunt and his client, Nate Bahm, created a page that doesn’t just explain why remodeling costs vary, but provides basic-, mid-, and high-level price ranges for several common projects, along with a description of what accounts for the price differences.

The strategy worked. Nate is now perceived as an expert who knows his local market, and that gives his prices more authority than what a homeowner might find at a generic remodeling-oriented website. Hunt’s audience at the presentation agreed: “Transparency is important to customers,” one attendee said.

Show Your Work

How’s this for transparency: I recently learned about an exterior replacement company (ironically, I can’t say who) that is selling roofing, siding, and windows online. True, the company makes an initial visit to the house to take photos and interview the homeowners, but homeowners have also sent photos via email, and sometimes interviews are conducted by phone.

Back at the office, the company uses software to calculate dimensions from the photos, then create the design and specs, and price the job. When everything is ready, they conduct a second meeting, online. The homeowners log in from wherever they are and the salesperson shares his screen, which displays a 3-D model of the house with all of the upgrades the homeowners asked for (and some they didn’t). The customers can ask for changes on the fly, and as they add, subtract, or alter features, they can see the changes and watch the on-screen price go up or down.

Does it work? Two salespeople using this process sold $2 million last year. Online. With the on-screen price jumping up and down like a yo-yo.

If I knew for sure why it works, I’d have a second home on Lake Como, but here’s my best guess: Remodeling customers have changed. The Web gives them access to more information than they can handle. They can find not just the price of everything, but they can remodel vicariously through the experiences of others. They can make most of the sales journey online, and when they finally contact your company, it’s not a sale, it’s a buying facilitation.

Remember those math tests where you had to show your work, but you got partial credit for using the right process even if you had the wrong answer? Apparently, that still works. 

When today’s customer finally contacts your company, it’s not a sale, it’s a buying facilitation.