Value-added is a struggle to achieve, but the struggle must go on.

Threw my Timex in the trash the other day. Kept pretty accurate time for as long as it worked, but failed to keep on tickin' beyond the couple of years I owned it.

Maybe it wasn't even broken. Maybe it just needed a new battery. But I'd feel foolish taking a $35 Timex into a jewelry store asking to change the battery. That probably would cost about as much as a new watch. Plus, I didn't feel like sitting through a jeweler's pitch for something more expensive.

Wristwatches to me are purely functional items, not status symbols, and they too easily get lost or stolen. That's why I buy mine at Walgreen's rather than Tiffany's. Timex is the most expensive brand carried by the drug store chain, the top models selling for $39.95. I was stunned to find some Japanese wristwatches retailing for $9.95 that actually looked pretty snazzy. I was tempted to get one, but couldn't bring myself to believe anything that cheap would work very well. I could be wrong. Nowadays, thanks to microchips, a lot of merchandise that's priced like junk performs okay.

I settled on a Sergio Valente brand on sale for $19.95. Sounds fancy and it looks quite stylish, perhaps the best-looking wristwatch I've ever owned. If I saw it on someone else's wrist, I'd guess it to cost a hundred bucks or more. Can't say how long it will hold up, but at that price even a year or so of reasonably accurate timekeeping would be a good deal. My needs don't require atomic clock precision.

Amazing, isn't it, the stuff that's not worth fixing anymore. Wristwatches, alarm clocks, radios, even large items like microwave ovens, power tools, TV sets and VCRs, are among our household goods that once kept repair shops in business but have evolved into disposables.

Backward Thinking

This train of thought conjures up the phone call I received several years ago from a frustrated plumbing contractor asking for help locating some ancient faucet stem. He told me he had spent most of the morning seeking the part to no avail. I didn't have a clue where to find one either, and asked him, "Why not just replace the faucet?" His response was, "I guess it might come to that. I was just looking to save the customer some money."

Nice, thoughtful fellow, but displaying the backwardness that permeates this industry. He had spent almost half a day of unbillable time chasing down a $10 repair part as a favor to a customer who probably never knew of his heroic effort, or if knowing, didn't appreciate it. That contractor represents both the best and worst of this industry. It's filled with hard-working souls just like him who try to do right by their customers to the point of needlessly complicating their own lives.

Low-end faucets, disposers, toilets and many other plumbing products are at the cusp of disposability. It often makes more sense to replace than repair them. As plumbing products blend into America's throw-away economy, the skills required to service and maintain those products diminish in value. It's much easier to train someone to replace things as opposed to diagnosing problems and prescribing solutions. One ramification, which I wrote about in April, is temporary labor agencies making headway supplying installers to retail stores.

Adding Value

Yes, I know some service contractors take the concept of replacement over repair to unwarranted extremes. I'm not saying everyone needs a new water heater every time a thermocouple goes out. Yet, there is a dilemma faced by both construction and service firms in that they must pay high wages to attract skilled journeymen and technicians, when much of their time gets spent on routine tasks capable of being performed by cheaper labor. Contractors who retain a pride in craftsmanship need to think hard about how to thrive in this era of disposable goods and devalued labor.

These contractors need to figure out ways to break from the pack with distinct value-added services that justify premium-priced labor. What exactly can you offer than most of your competitors can't or won't? Some suggestions:

  • Cater to an upscale market
    Don't go away with the wrong message. Rich people didn't get that way squandering money. They'll haggle over the price of routine services even more than poor folks. Charge them megabucks to install a faucet and they'll scream bloody murder. But you can remove the dollar signs from their thinking by replacing a humdrum toilet or faucet with a model loaded with bells and whistles, or one that looks like it belongs in the Louvre.

    These folks don't blink at Tiffany's prices, as long as they feel they're getting Tiffany-type merchandise and service. Contractors that cater to an upscale market need to conduct themselves in an upscale manner. They would do well to attend a Dale Carnegie course before venturing there.

  • Specialize in a niche market.
    Follow that old baseball adage, "Hit 'em where they ain't." Best example I can think of is radiant heating. No way a well-designed radiant system can compete in price with central HVAC, or even hydronic baseboard. But a few heating contractors have found it to be a lucrative specialty sold on the basis of comfort and efficiency. It helps that not one out of 10 heating contractors will even attempt a radiant project, nor should they without adequate training.

    Some mechanical contractors come to specialize in certain types of work to the point where they often get called to perform such jobs without competitive bidding, or at least for a "last look" to see if they can be in the ballpark of the prevailing bid. That's a nice way to do business.

  • Embrace high technology.
    The average plumber wants no part of electronic faucets, pressure-flush toilets, computerized boilers, fancy spas and whirlpools, or any other product he hasn't installed and fixed so many times he can do it with his eyes closed. This thinking stinks. Expertise in high-tech products and systems is a way to differentiate yourself from the handymen and the do-it-yourselfers. If you can't keep up with your industry's technology, you have no business calling yourself a professional.

  • Own your customers.
    Most marketing aims to get people to think of you when in need of your services. You want to go beyond that to the point where your customer wouldn't think of calling anyone else.

    The way to do that is through service agreements, price clubs or other arrangements that lock in customers. In the construction sector, you want to establish relationships with the best GCs or builders to the point where they'll put jobs out to bid only after you turn them down.

    Just make sure the customer is your captive and not vice versa. Too many subs who work for a select clientele are like indentured servants.

  • Perception is reality.
    "Perceived" value is in the mind of the customer. It doesn't necessarily equate dollar-for-dollar with the goods or services delivered. A detailed proposal for a $5,000 re-pipe job is likely to be better received than a hand-scrawled note saying "re-pipe basement, $3,000." Perceived value also pertains to things like uniforms, clean trucks and customer courtesy. All of it costs money, but you can get a good return on such investment.

    Shoring up perceived value is probably the simplest way to stay alive in the competitive snake pit of today. There are only two ways to market yourself. You can compete either on the basis of price, or on value.

Fond though I may be of $20 wristwatches, I'd sure hate to try to make a living selling them.