Builders Roadmap: Increase Margins & Prices in Competitive Markets

.

This is NOT advice about reducing costs & overheads in competitive times. Rather, it’s strategic advice about how to fast track bigger profits in a competitive environment based on what successful home builders do.

In competitive times, and softer markets, most builders already know to reduce overheads, costs and look for opportunities to remove any surplus.

Instead, this article looks at strategic steps you can take to completely change the game.

They come from research interviews we did with builders and show how most builders are far more empowered to deal with competitive pricing than you realise.

Let’s look at strategic pricing, rather than reactive pricing:

>>>Re-Think Your Marketing (Demand > Supply)


The laws of economics say that when demand exceeds supply, the price goes up.

So, why not re-think your marketing? Don’t sustain demand for a good workflow. Instead make it exceed what you can deliver.

You want demand for your services to exceed supply (to be ‘over-subscribed’).

That way you can increase your margins, comfortable that those who fall away as prospects would have been less profitable clients.

That then leaves you with A+ clients who are comfortable paying higher rates for your expertise.

You can then re-invest these better returns in your business to give your customers the best possible customer experience.

>>>Best Possible Customer Experience = Referral & Repeat Customers

Dave Ferrari, Ferrari Constructions
“Since using ProCalc I’ve been able to offer clients a super quick “ballpark” estimate that has enabled me to quickly work out who’s a serious prospect or not. It’s saved me countless hours to date and counting!”
Dave Ferrari, Ferrari Constructions

Referral & repeat customers are less price sensitive because they already have a knowledge of how you work and want to engage you.

Importantly, they’re happy to pay more.

So, it’s important that you manage expectations, reduce surprises, communicate clearly, manage potential disputes and so much more for your existing clients.

Provide prospects with an information pack before you meet them so they know what to expect.

Customers who have a great experience with you not only return as customers and refer friends, they’re also make for great testimonials or case studies to help other prospects understand your expertise.

Getting your customers’ experience right will be a game changer.

In fact, builders tell us that when 50% of your business starts to come from referrals or repeat clients, that’s a tipping point for huge success.

>>>Work to be The Only Builder or Trusted Expert (Preferred Builder)


Being the clients only real choice moves you into Jedi territory.

But to do that, you need to implement series of steps clients take with you well before build stage.

Growing trust with clients is a process that you can create so that every client you deal with has experienced your expertise and trusts you by the time the project goes to tender.

When you achieve this clients are solely focussed on employing your firm. Anyone else they speak to is just making up the numbers.

To find out how, see Are You a Trusted Expert or Just Another Builder?

>>>Generalists Compete Against Everyone, Specialists Have a Niche of Expertise


Specialization (differentiation) allows builders to focus on a niche that they can proudly claim as their own.

You might be the first floor addition specialist, the passive house specialist, the inner-metro renovation specialist and more….

The point is that clients want a specific project done. So aligning your chosen speciality with their needs make YOU the stand out builder.

Clients are prepared to pay more for an expert who specialises in their project type.

Pro Webinar: 12 Proven Tactics to Up Margins – without losing jobs
Watch Now (Free for Registered Builders)

>>>Ignore New Technology at Your Peril


Every day there seems to be a new software, new gadget, new game or new social media channel.

It can feel hard to keep up.

The easiest way is to do a google search for specific problems you face in your business.

For example, before ProCalc was released, builders struggled to accurately ball park client projects to qualify client budgets – meaning they wasted weeks estimating under-funded jobs.

Instead, Builders using ProCalc report saving 2 – 4 days per month avoiding tyre kickers (book a free ProCalc trial)

There are hundreds of software packages available to builders. Those who implement good software solutions enjoy huge productivity/profit increases.

>>>Qualify, Qualify, Qualify


Few activities will improve your margins as much as heavy qualification.

Taking on the wrong clients will cost you thousands of dollars and too much of your time.

Ask clients about their expectations, experiences, preferences, location, timeframes, project type, urgency, plan availability, willingness to pay for your time and their budgets. (Book a ProCalc free trial to test budgets)

Book a free ProCalc Trial

You Might Also Like:

Richard Armstrong is a former registered builder who recently interviewed hundreds of experienced Australian builders to identify how they best manage clients, budgets and profitability.

6 Builder Hacks to Stop Wasting Time.

Wasting time wasn’t part of the plan. But it’s probably happening. You’re flat out. Quoting. Chasing clients. Solving problems. Maybe try this….

10 First Meeting Screw Ups that Cost Builders

Your first meeting with a prospective client sets up the success of a project. Get it right and you grow profits with happier jobs. Get it wrong and you’re in for a world of pain…

Tired of losing jobs you quote?

It’s not until you analyse your quoting system for time and money wasted that you realise how costly a ‘leaky’ quoting process is. Here’s how to quote ONLY the jobs you’ll win…

5 Hidden Costs to Builders When “Clients Supply” Fixtures

It can feel awkward turning down the client’s request to supply fixtures – especially if you haven’t yet won the job. What to do…

Best Business Podcasts/Videos for Builders

Checkout these hand-picked podcast/video series for builders to help you grow your vision, your business, your profits and your team – successfully.

Cost+ Contracts – The Good, The Bad & The Ugly

Roughly 1 in 8 builders currently use Cost+ contracts; primarily to manage cost escalation risks. We reveal their pros/cons – which might surprise you…

Builders, are you the victim or the victor?

In tough times, it’s easy for builders to feel helpless with no control over their future. See how attitude has helped builders not just survive but flourish in tough conditions.

5 Warning Signs Mistrust is Killing Your Sales

If clients don’t trust you, they’re unlikely to engage your services. Here are 5 signs to look for – and what to do.

10 Simple Rules to Make Builders’ Lives Easier

Building’s a challenging game to play so we’ve compiled 10 simple rules to make every builder’s life easier (from hundreds of builders we interviewed)

5 Client Fear-Driven Tricks That Hurt Builders

Clients start the project process at a disadvantage because they’re on a steep learning curve. Through fear, some of them employ ‘newbie’ tricks. Here’s how to help them.