A Conversation About Perceived Value

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Please note, I have seen variations of this post on social media platforms without any attribution. The following is a highly edited version with some of my own commentary included.

A customer asked a contractor friend of mine how much it would cost to do this project.

My friend gave him a proposal: $4500
Customer: That seems really high.
Contractor: What do you think is a reasonable price for this job?
Customer: $2500 maximum!
Contractor: Ok, then I invite you to do it yourself.
Customer: I don’t know how to.
Contractor: Alright, then how about for $2500 I’ll teach you how to do it. So besides saving you $2000, you’ll learn valuable skills that will benefit you in the future.
Customer: Sounds good! Let’s do it!
Contractor: Great! To get started, you are going to need some tools. You will need a chop saw, table saw, cordless drill, bit set, router, skill saw, jig saw, tool belt, hammer, etc.
Customer: But I don’t have any of those tools and I can’t justify buying all of these for one job.
Contractor: Ok, then for an additional $300 I can rent my tools to you to use for this project.
Customer: Okay, that’s fair.
Contractor: Great! We will start the project on Monday.
Customer: I work Monday through Friday. I’m only available on the weekends.
Contractor: If you want to learn from me, then you will need to work when I work. This project will take 3 days so you will need to take 3 days off work.
Customer: That means I’m going to have to sacrifice my pay for 3 days or use my vacation time!
Contractor: That’s true. Remember, when you do a job yourself you need to account for unproductive factors.
Customer: What do you mean by that?
Contractor: Doing a job completely from start to finish includes time spent to plan the project, pick up materials, travel time, gas, set up time, clean up and waste disposal, amongst other things. That’s all in addition to the actual project itself. And speaking of materials, that’s where we will start on Monday, so I need you to meet me at the lumberyard at 6:00am.
Customer: 6:00am?! My work day doesn’t usually start until 8:00am!
Contractor: Well then you’re in luck! My plan is to start on the deck build by 8:00am. But to do so we have to start at 6:00am to get materials picked up, loaded and delivered to your job site.
Customer: You know, I’m realizing that a lot more goes in to a job than what a customer sees in the finished project. Your proposal of $4500 is very reasonable. I would like you to handle the project.

Conclusion:

When you pay for a job, especially a custom job, whether it’s a physical project or digital project, you pay not only for the material and the work to be completed, you also pay for:

  • Knowledge
  • Experience
  • Custom Skills
  • Tools
  • Time to Plan, Prepare and do the work
  • Professionalism
  • Taxes
  • Licenses
  • Liabilities
  • Insurance

Sometimes there are other incidentals you don’t think about when you see the finished product. If you request a proposal for custom work to be done, please don’t disrespect a service provider by trying to get them to lower their prices. If their proposal exceeds your budget, there’s nothing wrong with getting other proposals. Just remember, you get what you pay for.

As I have worked for myself more than I have worked for others, I have experienced this quite often across several trades. When I built, repaired and upgraded computers I often had customers devalue my work. Sometimes they would, instead take their computer to a friend or family member who was, “really good with computer”. I almost always saw them again though. In some cases I was forced to charge more for the original job afterward, because the job became bigger after the friend / family member “messed around” with the computer.

Once in my computer shop a customer came in several times over the course of 2 weeks with a flyer from Best Buy. She kept asking questions trying to get me to justify my higher price for a custom-built PC than an eMachine she could buy at Best Buy for $100 less. One day my wife reminded me that, if I added up the time she spent asking me questions, the already used up more than $100 of my time, so I insisted she buy the PC from Best Buy. A few months later, she brought it in for repair, having taken it into them 3 times and still not having gotten it fixed properly. But, she didn’t want to pay me my cost to repair it, since she’d already paid them money and it still didn’t work. It was very difficult to get her to understand that, just because she paid someone else to do a job that they failed to do, doesn’t mean someone else will take that out of their cost, especially when we’re comparing me to Best Buy.

As a contractor in electronics engineering I’ve been hired with the intent to “short-cut” my services by getting me to do only enough to essentially outline the plan for someone “cheaper” to come in and finish the work. But when there’s hardware and software involved, it can be very difficult for someone to just pick up such a project and wrap it up. Often it costs more to do this in the end than to just have the person familiar with the hardware and software to complete the job. As a contractor you should know your worth and be confident in it. Potential clients should recognize your worth and be respectful of it.

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