Getting Ahead of the Pricing Conversation

getting ahead of the pricing conversation

I recently gave a presentation at the ISFA Conference, where we discussed research findings from a recent survey of homeowners and contractors. The results from homeowners presented showed a mixed bag of feedback; many homeowners cited contractors' lack of “getting work completed on time,” “not showing up” to work sites, and a somewhat lackluster effort to “present material” options. On the other hand, Contractors cited some equipment suppliers as “difficult to work with” or having “never followed up” with their purchase to better understand the contractor experience.

The overarching theme, however, centered on pricing and what exactly to do about prices in this highly inflationary and ever-changing economic environment. There are no great answers for anyone in today’s economy – prices are going up everywhere, and it is essential that every business look at raising theirs accordingly. It simply is not a pleasant situation for anyone. However, one thing is clear, communicating that prices are going up to customers is critical. Almost every survey we have done around pricing has indicated that people are grateful when given a heads-up early that prices will indeed rise and when they can expect higher prices.

Here's one comment from a contractor:

“I use [suppliers] that work with me, are very transparent, do not sell me anything I don't need, do not compromise quality, offer great discounts & deals, are very nice to work with. I like how they discuss any upcoming price changes & given the current economy, I understand. I am lucky like this because I've heard about other suppliers who are not this easy to work with. It did take years to accomplish this though.”

Follow-up surveys with customers almost always praise those suppliers and service providers that communicate early and often on all aspects of the transaction. Whether related to material shortage, delays in work, or pricing increases, a strategy of making the customer aware early pays dividends down the road. Customers will often note how they admire the cooperative nature of their suppliers.

When we follow up with customers with a survey, pricing generally is seen as a negative when the ground is not set for the rise in pricing. No one enjoys seeing prices rise. It’s not fun for either party, but one way to make it infinitely worse is to not communicate it beforehand. Communication with customers is critical, especially on the topic of pricing.