Race to the Bottom or Top

"What if I told you that being the cheapest contractor isn’t a badge of honor—it’s a race to the bottom?"

The Hidden Dangers of Competing on Price
Imagine this: a homeowner, who has saved up to create their dream kitchen, is searching for a reliable remodeler. They don’t want the cheapest bid; they want a remodeler they can trust—someone who respects their time, understands their vision, and values their investment. Yet, many remodelers fall into the trap of cutting prices to win jobs, believing it’s the only way to stay competitive. Here’s the truth: competing solely on price is unsustainable and can drive your business into the ground.

Studies back this up:

Houzz & Home Study shows that trust and reputation are the top factors homeowners consider when hiring a contractor, often outweighing price.
Harvard Joint Center for Housing Studies reports a high failure rate for small remodeling businesses during economic downturns, largely because they drop prices to unsustainable levels, sacrificing profit and quality.
Instead of chasing low-paying jobs, position yourself as a trusted, quality-focused remodeler who brings value that clients are willing to pay for.

The Importance of Pricing for Value, Not Just Volume
Trying to “make it up on volume” by lowering prices is a dangerous strategy for remodeling businesses. According to Remodeling magazine, contractors who focus on value—quality work, good communication, and reliability—maintain profitability even in slow markets. Charging what your services are worth allows you to maintain cash flow, hire skilled employees, and invest in tools and training, setting yourself apart from “cheapest-bid” competitors.

Winning Over Millennials and Gen Z Homeowners
To succeed in today’s market, remodelers must connect with younger generations. Here’s what Millennials and Gen Z look for in a contractor:

Trust and Professionalism: According to Pro Builder, younger homeowners value trust and are willing to pay more for a contractor with a solid reputation.
Sustainable and Modern Design Solutions: Many prefer remodelers who offer energy-efficient and eco-friendly options.
Financing Options: Studies, like Redfin’s, show Millennials and Gen Z are more likely to hire a remodeler who offers financing or accepts credit cards, giving them flexibility without compromising quality.
Transparent Communication: McKinsey & Company points out that younger generations expect honest, direct communication. Keeping clients in the loop throughout the project builds trust and ensures a smooth experience.
To attract these clients, ensure your online presence reflects professionalism, highlight modern and sustainable services, and offer financing options to meet their expectations.

Stand Out with Communication and Professionalism
Communication is often cited as the most important factor in remodeling satisfaction. According to the GuildQuality Customer Satisfaction Survey, homeowners value remodelers who:

Provide clear, realistic timelines.
Communicate updates promptly.
Show respect for both the homeowner and their property.
This level of professionalism can differentiate you from competitors, as effective communication builds trust and alleviates the stress that often comes with home renovations. Harvard Business Review notes that companies with excellent customer experience grow revenues faster than their competitors, showing that clear communication and respect can directly impact your bottom line.

The Advantage of Offering Financing and Credit Options
More than 70% of homeowners say they would choose a contractor with a higher bid if they felt that contractor was more professional and trustworthy, according to NAHB. Many remodelers, trained in The Remodeling Academy’s Hanging Dough course, have successfully integrated financing options into their business, helping clients get the quality they want while maintaining healthy profit margins. By offering flexible payment solutions, you can stand out from cash-only competitors and attract clients who prioritize value over price.

The Cost of Being the Lowest Bidder
Low bids often come with hidden costs. Consumer Reports and the Better Business Bureau (BBB) highlight that homeowners who hire the cheapest contractors frequently encounter poor workmanship, delays, and a lack of communication. This leads to frustration, additional costs, and negative reviews that can harm a contractor’s reputation. By educating clients on the value of paying for quality, you can position yourself as the better choice, offering peace of mind over bargain pricing.

Embrace a New Mindset: Quality Over Low Bids
So, what’s the alternative to being the cheapest? Position yourself as the trusted, professional choice. Educate clients on why quality often costs more, but also why it’s worth it. When you prioritize high standards, clear communication, and respect for your clients, you’ll attract homeowners who see the value in hiring a true professional.

Take Control of Your Success with The Remodeling Academy
If you feel trapped in a cycle of fear—afraid to lose jobs, to charge what you’re worth, or to step outside your comfort zone—then it’s time for a change. The Remodeling Academy offers tools and training to help you shift your approach, focus on quality, and elevate your business. Our Hanging Dough course covers everything from professionalism to understanding today’s clients, and even leveraging financing options to create value.

Imagine moving away from low-bid clients to attract those willing to pay for expertise. These clients are looking for a remodeler who respects their home, values their time, and delivers exceptional quality. This shift in mindset, backed by The Remodeling Academy’s resources, can turn your business into a trusted brand that clients recommend to friends and family.

Ready to Thrive?