How do we Price Renovations? (part 1)
A famous brewery had a long-time slogan that seems, on the surface, to be the exact opposite of what you’d want. It was: Reassuringly expensive. The gut reaction is, “Why is something being more expensive reassuring?” But their goal was in communication, which meant that this beer paid a little more and got a lot more. Or, to put it negatively, what am I compromising on if I don’t go with this beer?
At Owners Choice, we would never use the tagline “reassuringly expensive” because our goal in pricing our jobs is never to be expensive. We aim to price exactly what you want for your renovation, and what we expect it to cost to get you there. However, we LOVE the concept of “Reassurance Pricing,” which is the root of how we price our renovation jobs.
What is Reassurance Pricing? It’s three things:
It’s thinking not just for the wants of a project but the needs of a project.
Let’s say you're considering a kitchen renovation that includes removing a wall. Simple right? Framing, cabinetry, countertops, appliances, fixtures, paint. Boom. But what if there are a couple of outlets on the other side of that wall? What if moving the cabinets means moving an HVAC vent? What if the flooring needs to be refinished? What if, due to the age of your home, we need to troubleshoot some ancient electrical and plumbing?
The reality is that it’s easy to put a quick (and cheaper) price on a project's wants. As a homeowner, you can almost do it yourself by visiting several vendors and searching online. However, you’re leaning on the contractor to price out the project's needs because those costs can only be accounted for by a trained eye and experience. If they’re not accounted for, that “low” estimate is going to skyrocket mid-project, and so is your blood pressure because you weren’t expecting it.
It’s thinking not just of the project but of your experience.
Certain items ultimately won’t impact the final look and function of your project, but if not accounted for, we dramatically impact your experience negatively. Let’s take the same kitchen renovation example. Wouldn’t you want your flooring protected on the path to the kitchen? Plastic walls installed to protect against dust? Wouldn’t you want a dumpster on site for all trash and to have that dumpster emptied when it’s full? Wouldn’t you prefer a portajohn to be used instead of your kid’s bathroom? Wouldn’t you prefer to pay a little more to have the work carry a warranty so that six months from now, all you have to do is make a phone call, and the issue is fixed at no added cost?
None of these items are getting nailed to the walls or installed in your kitchen, but every single one is essential to providing the best experience possible.
Reassurance pricing gives you the peace of mind that we’ve priced the job appropriately to do the right thing.
Lastly, reassurance pricing isn’t rooted in doing whatever it takes to win the job. Now, this might seem counterintuitive, but for us, this is the most important thing. We will NEVER price a job at a number we’re uncomfortable with just to get a job. Even if it means we’ll get the classic “how can it cost this much?!” statements, it’s more important for us to do the right thing by pricing an accurate reflection of not just what it may cost, but we expect it to cost.
So, does reassurance pricing mean it is more expensive? Maybe, but not necessarily. What it means is that you can have peace of mind that the price reflects what it’s actually going to take to renovate your home. It means you can be reassured that your experience (and the costs associated with your project) is in the best hands possible.
In part two, we will dive into the practical details of how we price renovation work.