TFC #20: The Relationship Between Price and Quality

Have you ever looked at another shop’s cabinet quote and wondered how they get any work at a price so much higher than your own cabinet quote?

Are the cabinets they are building actually any better than yours?

Will Sampson from Woodworking Network has done his annual pricing survey for more than 20 years. You can read about them here.

Each year, it is amazing to look at the difference between the lowest bid and the highest bid.

For example, in the 2020 Pricing Survey, the low bid on the sample kitchen was $12,600, whereas the high bid was $55,800.

Does that mean the high bidder made cabinets that were 5x better than the low bidder?

Not necessarily.

I had the opportunity to play a round of golf at Payne's Valley in Branson, Missouri last week, a premier course designed by legendary golfer Tiger Woods.

I never dreamed I would pay $450 for 18 holes of golf. 😲

I obviously couldn’t afford to do this very often but I had to ask myself this question:

Why was I so eager and happy to pay the $450 for my round of golf plus a $75 spectator fee for my wife and $50 for a hat with the Payne’s Valley logo on it?

I could’ve gone to plenty of courses and played for $40 or $50.

Was Payne’s Valley actually 14x better than a normal course?

The experience was nothing short of extraordinary, and in my mind, it was even more than 14x better. That idea made me reflect on the relationship between quality and pricing.

Factors Of Being Happy To Pay A Higher Price

I put some thought into why I was happy to pay a higher price at Payne’s Valley. This might shed some light for some of you who have been trying to figure out how some shops are able to charge more for their cabinets.

#1 - Features and Quality

Every part of the experience was top quality.

The clubhouse was outstanding. It was perched on top of the mountain overlooking the golf course.

The bathrooms and locker rooms were top-notch.

The golf carts were excellent and the GPS touchscreens on them were very helpful.

The driving range was great.

The short game practice area was perfect for warming up. There were three different greens with various slopes you could chip onto.

The putting green in front of the clubhouse was in excellent condition.

The scenery was incredible.

The fairways were in great condition.

The greens were impeccable.

The overall design was unique and challenging.

I could go on and on…..

But the point is, they certainly checked all the boxes when it came to quality and the features they had available.

I can’t think of one thing that I didn’t like about the entire experience. (except for hearing a rattle when I was looking for my ball in the trees)

As a shop trying to charge higher prices, you need to deliver a high-quality product.

It doesn’t mean it has to be the absolute best or it has to be better than others by a large margin, but you do need to deliver a product that people are proud to have in their homes. You cannot cut corners and sacrifice quality.

Your product should be one that your customers would have a hard time finding something they didn’t absolutely love.

#2 - Reputation and Prestige

Reputation and prestige play a significant role in shaping consumer behavior and their willingness to pay a premium price. Payne's Valley, being a golf course designed by Tiger Woods, carries a reputation for excellence, innovation, and exclusivity.

Tiger Woods is a legendary figure in the world of golf. His involvement in the design of Payne's Valley lends credibility and prestige to the course, attracting avid golfers who want to be associated with the Tiger Woods brand.

I don’t think there are any “Tiger Woods”-like celebrities in the cabinet industry, and even if there were, your customers probably couldn’t care less about them.

However, there are some shops that have built a highly desirable cabinet brand that channels this idea of reputation and prestige.

#3 - Impeccable Service

From the moment we pulled our truck into the drive, I knew it was going to be a great experience.

We pulled up to the golf cart area and we were greeted by a couple of people who unloaded our bags and got us all set up on our carts. They made sure we had everything we needed. Everyone was so friendly and helpful as we navigated the process of checking in, going to the range, and practicing on the short-game area.

When our tee time came around, the starter called our names and led us to the 1st tee to get started.

As we played, a cart came around every couple of holes with drinks and refreshments.

My favorite part was when we were on the 6th hole. It was pretty warm so I was starting to sweat a little bit. A cart pulled up and the guy asked if we wanted any “mink towels”….or that’s what I heard anyways.

Turns out, they were mint towels. He had a tote full of these wet mint towels that were chilled on ice.

It was incredibly refreshing to wipe my face with a cold wet towel that had a strong mint scent. I felt rejuvenated. He made several trips with fresh mint towels while we played.

Overall, I felt very well taken care of and valued.

This is where a lot of shops could step up their game.

Sometimes, we get so caught up in efficiency and getting jobs out the door, that we leave the customer feeling like they are not valued.

To serve at a higher price point, you need to serve people at a higher level.

#4 - Limited Availability

We booked our tee time several weeks in advance because their slots get filled up pretty quickly.

Securing a spot that was scarce definitely set the stage for an enjoyable experience.

Scarcity triggers a psychological desire to be part of an exclusive group that has the opportunity to enjoy this unique experience.

The best thing that can happen for your business is if have to turn away work at times.

It triggers this idea in people’s minds that because availability is limited, it must be in high demand and therefore must have a higher value.

#5 - Memorable Experiences

I have been eagerly telling people about my round at Payne’s Valley as I find opportunities. I don’t even think twice about bringing it up because I had such a great time.

What do your customers say about their cabinets and their experience after you complete their job?

Would you ever hear anything like these statements?

• I had heard so many good things about ABC Cabinets from my friends and from seeing them on social media. I’ve heard they typically have a long lead time but I was able to get my name on the schedule.

• ABC Cabinets was so helpful, I had a few ideas from social media posts but the designer really helped me figure out what I wanted in my kitchen. They seemed so willing to spend time with me and made sure I was getting everything I wanted.

• I had received quotes from various shops and they all had nice printouts of the designs, but ABC Cabinets took it to the next level. They showed me a video walkthrough and let me look at my new kitchen through a VR headset. It was incredible. I’ve been telling all of my friends about it.

Conclusion

Not every shop needs to charge a higher price.

For some shops, a high volume and low profit approach can be effective.

However, sometimes we are hurting ourselves by trying to always be the cheapest bidder.

Price itself makes people think the product is better.

Think of the reference I made earlier to the guy who quoted the kitchen for $12,600.

Do you not automatically assume he makes a lower quality cabinet than the guy who quoted the kitchen for $55,800?

It doesn’t mean the guy with the higher price would always get the job because there are plenty of people around that shop for the cheapest price. However, this is a good example of the trick this plays on our minds. We can’t help but associate quality with price.

If you’re trying to imagine how people would ever pay more than what you are charging now, consider these things:

• You need to build great cabinets. (factor #1)

• You need to find a way to become a desirable and prestigious brand. (factor #2)

• You need to serve people at a higher level if you want to be paid at a higher level. (factor #3)

• You need to find a way to make people feel like they are part of an elite group by having your cabinets in their house. (factor #4)

• You need to give your customers plenty of reasons to tell their friends about you. (factor #5)

That’s all for this week. Thanks for reading a post that I somehow managed to talk about my round at Payne’s Valley. 🤣