As a Construction Industry consultant, I am often asked by individuals and companies on the ways to choose the best Contractor for their project.
My simple answer is:
“Choose the Contractor who will give you the best value and not just the lowest price.”
So what’s the difference between value and price?
I think billionaire Warren Buffet explained it best when he said:
“Price is what you pay, value is what you get.”
It’s wise to remember that construction is a service with many interdependent steps, not a commodity that is easily shopped using price as the primary means of choice.
The next question people usually ask is:
“How do I measure the value I will get from my builder?”
For the purpose of this article I will speak to the most basic measurement of value, one that’s easy to do and provides the Customer a true measurement of value.
It involves some work on the part of the Customer and begins with their willingness to share accurate information about the project and their expectations for the Contractors
being considered for the project.
These expectations and the responses from contractors measured against the 7 Basic Needs of Customers will do more to measure the value of the Contractor than any marketing materials or promises they could ever make. Ignore the “sale pitch” and focus on how well a Contractor will serve you.
Do this by using a uniform scorecard and value system ( 1-10 for example ) for each Contractor using each of the 7 Basic Needs of Customers as categories to score them.
“Don’t ask for a price at this time, just focus on “how” the prospective contractor (s) will perform for you.”
The 7 Basic Customer Needs are:
We all want to be acknowledged and welcomed by people who are sincerely glad to see us and talk to us…every time we interact with them. We should never feel we are an intrusion on their work day.
2. Understanding and Empathy
We as customers need to feel that the contractor understands and appreciates our unique circumstances, without judgment and criticism. This is accomplished by listening to us. They have asked for the chance to provide construction services for us, are they acting like they sincerely want to help us?
We all need to feel we are being treated fairly. No one wants to be treated as if we fall into some unknown category and treated as second best.
It’s our project and we need to feel we have an impact on the way things turn out. We don’t care about policies and rules, we want to be dealt with in all our reasonableness.
5. Options and Alternatives
We need to feel that multiple avenues are available to getting what we want. We depend on the contractor to be the expert and provide us with those options. We get upset when we feel we have worked hard to get something done and discover that the contractor knew a better way but never suggested those options to us.
We customers expect to be educated and informed about the products and services available for our project, and we don’t want anything left out. We also don’t want to waste our precious time researching the information our construction expert should be sharing with us.
Finished, completed, resolved, wrapped up…whatever you want to call it. We customers need to know that our efforts and money have resulted in a project that is done…on budget and in schedule.
After scoring is tabulated I suggest customers do the following:
Disqualify any companies that score less than 50%.
Because it will cost you money.
“Failure to meet your basic needs early in the selection process is a forecast for future troubles in your project when your checkbook is open and you are paying bills.”
Next arrange the remaining Contractors from highest score to lowest.
The results of your work might lead to one clear choice or a few somewhat evenly scored companies and you can be confident you are speaking with the best of the Contractors to meet your needs.
Now is the time to return to those Contractors who have passed your test and begin to talk about your budget and their pricing of the project. Don’t hesitate to share your budget with them. It will become clear which Contractors are going to give you the most bang for your buck or the best value.
“Resist the urge to make your choice based on the lowest price. To do so ignores what Contractor can give you the best value for your money.”
You will have more in-depth discussions with your chosen Contractor about many project and budget details.
This doesn’t mean their obligation to meet your needs has ended, in fact it has just begun and must continue the entire duration of the project.
If you continue to measure each against their ability to fulfill your 7 Basic Needs. This will enable you to keep your relationship with your contractor and your project on track.