Don’t Leave Money on the Table
authors Eliot Sefrin | May 10, 2021
Kitchen and bath designers, along with other residential remodeling professionals, may well be shortchanging themselves – and seriously compromising their bottom lines – by undervaluing the special services they provide, while failing to charge accordingly for their reputation, expertise and skill.
That’s the inference of an illuminating new report that proffers groundbreaking insights into how and why today’s consumers spend on home-related services. The landmark report, issued last month by Denver-based digital marketplace HomeAdvisor, takes a deep dive into the key factors impacting the cost of a wide range of home-
remodeling projects, including kitchens and baths.
According to HomeAdvisor’s True Cost Report, pricing for home services is essentially a function of four key factors: material quantity, material quality, labor quantity and labor quality. But while the first three are relatively simple to quantify, HomeAdvisor asserts, the most crucial factor – and the most difficult to valuate and charge for – is labor quality.
And that’s where many remodeling pros tend to come up short.
Indeed, according to the True Cost Report, COVID-19 and its resultant higher demand have increased price points for most major remodeling projects, a trend that’s expected to continue in 2021. But while project costs have risen, pricing models suggest that the increases have resulted almost exclusively from higher product costs, often resulting from raw-materials scarcities, factory closures, foreign tariffs, supply chain disruptions and increased labor costs. In other words, the steadily rising prices for kitchen, bath and other major remodels have not necessarily put more money into the pockets of remodeling pros themselves.
There are reasons for that – as well as ways to change the calculus.
Specifically, according to HomeAdvisor, homeowners often lack a thorough understanding of precisely what goes into the price of a home remodeling project
– and just as often have difficulty determining if a project’s price tag aligns with the value they’re receiving. Furthermore, the True Cost Report suggests, it’s all too common for homeowners to easily overlook what they don’t readily see – specifically the hidden value that a team of high-quality design professionals intrinsically brings to a project.
Stated another way, the more that consumers are educated about the unique value proposition they’re receiving from a knowledgeable, well-trained design/remodeling professional, the more open-minded those consumers are when it comes to spending more money, especially in the case of “lifestyle-value” remodeling projects such as kitchens and baths.
Granted, it’s difficult in many cases to put a specific price tag on such attributes as a design pro’s reputation, reliability, product expertise, transparency, integrity and consultative skills. It’s equally difficult to place a value
on error-free estimating, prompt scheduling, post-
installation service and the ability to inspire confidence in consumers who are spending money on big-ticket projects tied intimately to their lifestyle, family composition, functional needs, personal status and sense of style. But kitchen and bath design pros should never fail to recognize that they bring something very special to the table.
And they should never fail to charge for it.
While today’s remodeling market is competitive, and it’s easy to get undercut by lower-cost competitors, high-quality kitchen and bath professionals shouldn’t be shy about charging for, and promoting, the intangible value they provide in the projects they design, sell and install. Labor quality, as much as any other cost factor, is worth dollars and cents.
It’s critical for kitchen and bath design pros, and their clients, to fully understand the myriad factors that drive project costs. Those same clients should be reminded about the one truism about pricing that remains forever constant: investing in quality is always a bargain. ▪