Monday, February 6, 2012

Pricing - Part 1: Cheap Things are Seldom Good

Steve and I have spend a good deal of time this winter discussing pricing. We are aware that too many companies in our industry take advantage of homeowners who don't have the facts on pricing. We want people to know more about this topic so they can protect themselves and recognize real value.

Below is something that caught my attention recently was a notice from the Nashville Police Department. It reminded me of something that my grandfather used to say: "Good things are seldom cheap and cheap things are seldom good".

East Precinct - Metropolitan Nashville Police Department
ATTENTION: Recently, across the city, there has been an upswing in an old scam. Someone unknown to you knocks on your door, offering roofing, driveway repair, or other service. Usually, the victim receives worthless service or none. If not already relieved of their money, the victim is threatened to pay up. Therefore, be wary of unsolicited offers that are too good to be true. Check credentials and verify employment claims and affiliations.

For years, we have been telling people to be on the lookout for unlicensed and uninsured contractors. Whether someone knocks on your door or not, you should be aware that people who offer very low prices are most likely not going to deliver a quality service to you. So, what would a homeowner encounter from the guy who offers a very low quote? First it is likely that the guy offering a rock bottom isn’t licensed as a contractor in the state of Tennessee. You can check for yourself at

It is also common for low cost contractors to operate without liability insurance or bonding. As a homeowner, you need to be aware that if you hire a contractor who is unlicensed and uninsured, you are taking on a significant risk. If that contractor damages your property, your homeowners insurance is not required to pay for the damage. This could make you responsible for a catastrophic loss.

Sadly, a good number of these low cost guys have substance abuse issues and therefore may need cash quickly. They may quote a price, ask a homeowner for a deposit and then proceed to get drunk or high. As an example, someone approached me and asked for a job last year. When I questioned him about his previous employment, he told me his former boss had terminated him because he was “too spaced out”. Steve and I saw him a few weeks later in a convenience store near our shop. As we were in line with our morning coffee, we noticed the "spaced out" guy purchasing a big can of Red Bull and an even bigger can of beer. I said hello and he seemed proud to mention that he hadn’t slept the night before AND was on his way to do “some electrical work”. We wouldn’t be shocked to learn that his career as an electrician was a short one!

We hope you can avoid all the spaced out "electricians" and other "cheap" contractors in our area this week. We look forward to sharing more about Pricing with you very soon.

Bill Boyd

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