The Cheap Route
Taking the cheap route in business has moral implications for the business owner.
Happy Tuesday Gentleman,
I hope you are all doing well today. It is 90 degrees up here in New England, a nice change from the brutal winter we experienced just a few months ago.
Just a reminder, I am taking submissions to some questions for a personal research project. You can find those questions and how to answer here. Your responses are helpful to me, thank you!
Today, I am sharing a story and lesson from my day job - something we talked about in our sales meeting yesterday. There are moral implications when clients ask for the “cheap route”. We are going to look at them. If you own a business or manage a business, I think the takeaway will be helpful to you.
Things I Found Interesting this Week
If you’re interested in starting a business, check out The Solo Operator. Lucas runs a solo business - just him, no employees. Each newsletter he shares advice and stories of how people went solo in business and became successful. While I don’t fun a solo business, my father did and I can tell you it makes for a good life.
If you haven’t checked out The Men of the West by Ryan Matchett, please do it now. It’s a fantastic Substack for men, all inspired by the Lord of the Rings.
Moral Implications of the “Cheap” Route
My day job is at a Home Improvement company. At one time I was the project manager and now I am the business manager which means I primarily focus on sales and marketing. Our home improvement services involve kitchens, bathrooms, painting and carpentry, and floor refinishing. Maintaining a home can get pricey for homeowners, especially in a place like New England that combines historic homes with brutal winters.
We are working with a gentleman whose exterior is in bad shape. It’s a beautiful colonial home with classical woodwork on the exterior. What appears to be years of neglect combined with previous poor craftsmanship has left this gentleman with very few option to repair his home at an “affordable” price. In one sense, home repairs are never “affordable”. In this line of work, if the quote is affordable, the homeowner is probably getting cheap work that will cost them down the line.
The rep working with him showed me the pictures of the damage prior to showing the client the proposal. It was bad enough, I called him to give him a heads up and walk him through what he would be seeing from us. The carpentry repairs were going to be in excess of $20k to maintain the historic look of the home. I did not want this gentlemen to have shock when he received our proposal. We talked, he shared he was planning on selling his home (a key detail) and that he was okay not maintaining some of the historic look if we could bring the price down, which we were willing to do.
Fast forward. He calls and tells us he received two quotes from other companies. One company told him they could skip carpentry altogether and paint over it for a cool price of $10k. Another company told him they could do what was only “necessary” for $15k, painting and carpentry. He wanted to know if we could get anywhere close to that by skipping some of the repairs.
We answered that we would not do the work.
It had nothing to do with the money.
There are a couple things you should know about home improvement generally in order to understand why we said no.
Paint does not stick to rotted wood.
Paint’s primary purpose is to protect wood. The second purpose is to hide imperfections.
Water is the enemy of a home. If water gets into the home, the damage can be thousands and thousands of dollars.
I would like to say at the outset I do not think the gentleman we were working with was intentionally doing something immoral or in bad faith. He is not an expert in this field and all he saw was a massive price difference. But at our company, we believe we must doing all things with integrity, character, and inline with how God would have us take care of people’s home’s. So the lessons drawn from this little lesson are not to show how “bad” this man was, but how a man of God, offering a service or product, should think about the end user. If we did what this man asked, it would not be him who gave an account, but us who knowingly took advantage of a situation instead of looking out for the homeowner and future homeowner.
What happens if we do not do the full scope of the work?
The gentleman was intending to sell his home within a year. He was getting it ready for the next person who would call this house “home”.
Water was already seeping into the home in different places. If the carpentry is not fixed, more water would get in causing potential damage to the house of $100k+. If we don’t fix the areas on the outside, the future homeowner could be looking at needing new siding, walls, insulation, pipes, and whatever damage could happen on the interior.
By not doing the full repair, the next homeowner would be in for a rude awakening within 2-3 years.
The other companies were going to attempt to “hide” the damage. This is deceitful on two fronts. First, paint can’t stick to rotted wood so the client would be paying for something that would not work. The paint would fall right off. Second, it would be an attempt to hide the damage from the future homeowner. Would an inspection find it? Most likely. But it is still an attempt to hide future issues.
In this scenario, we have:
Deceit happening to the client (skipping steps to get a job, knowing it won’t work).
Potential high change orders when it doesn’t work. (A change order is a price adjustment to a contract that homeowners are on the hook for. Many companies quote low and then hit homeowners with change orders to get the price up to the true amount of work.) So deceit again.
Hiding current problems that turn into future disasters for future homeowners. Deceit a third time.
It would be forcing our field employees to put their name to a job they couldn’t be proud of. It would be asking them to participate in something they knew was immoral.
We did talk to the client about it. We were not as blunt as I am writing here but we did warn him about choosing the “cheaper” path. We told him we were only willing to do the work if we could do it the right way. We could lower his cost by choosing a different paint line but that was about it. If he wanted to work with us, he would have to allow us to do the work done properly and with best practices.
He has not made a decision yet.
Takeways
If you are in business of any kind, you get to choose what work you do and what work you won’t do. You get to decide if it’s worth doing things the “cheap way” to get a client or to lose a potential client by holding to standards. In this story, the implications for taking a shortcut are more obvious than in other scenarios but these scenarios are presented to us everyday. It’s tempting to give assurance to a client that you probably can’t guarantee. It was tempting for our rep - it was his commission on the line.
Working in a just manner requires prudence - giving thought to the implications of your choices. Could we drive ourselves mad moralizing about every little thing? It’s possible but it is unlikely that most of us are going to do that. Most of us are not giving thought to the implications of our choices in business at all.
For us, it was a more just thing to tell this guy the truth and not do the job than to get the job at all.
We have the same problem with parents who are considering a different treatment option for their son. We discuss the upsides of our program, all of which comes with additional cost, but you can't put a price on your child's wellbeing.