Out of curiousity…what do you say when you give a customer an estimate for something small (under $1,000) and they say they want to get a second estimate?
I know its good financial sense on their part but what do you say or how do you handle it?
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i usually say....... after making sure they understand what we are giving them a price for..........
give me a call if you change your mind....
they will usually find someone with a cheaper price and i will not get the job... sometimes they will be happy with the other bidder , sometimes not... if not , they will probably wish they had chosen me
most of the time they will never get a second price... and if they do ... they will not be able to evaluate wether they are getting a better deal or just a cheaper price
i have never seen two contractors bidding on exactly the same job.... the customer may think they are, but they are not
Ditto what Mike Smith says.
Make sure they understand the specific work you'll do for them, and also what you as a person or company represent in terms of reliability.
Then turn 'em loose.
If they're real low-ballers, you're better off without them, and if not, they're just saying what their uncle told them to, and will pick you anyway.
Either way, your best move is to be gracious, and say "of course". For a small job, it's not worth the headache to argue. Maybe find out who referred them, and if that lead refers a few chain-yankers, keep that in mind.
k
Edited 10/17/2009 11:51 pm by KFC
I say OK, thats fine. let me know how that works out.
What are the options?
>...what do you say... <
Call me when you want the other guys work fixed right.
We use a very specific response. And this is one you probably should practice.
"Mrs Smith, am I correct in assuming that you are comfortable with us a company and would be willing to use our services if the price is right?"
Mrs Smith: "Yes, you have presented your company well.".
Us "Mrs Smith, we have been in business a very long time. We stay in business because we pride ourselves on good work. This business is very competitive and we also know we have to keep our prices in line to stay in business. We know that if you shop around and find the same quality installation as we have talked about here, the prices will all be very similar."
We go on..."lets be realistic. Would you agree, if you shop hard and compare similar services, you might be able to find someone to do this job for 10% less. If the price varies more than that, then there is probably something wrong with the deal...after all, if it's too good to be true, it probably isn't the best value, right?".
Mrs Smith..." ummm, yeah, I guess that is true.".
Us: "Okay, let me make you an offer here. If I will give you the ten percent off that you might find by shopping, will you be willing to sign tonite and save you all the trouble?"
Push the pen and paper over toward her again.
If she signs....good deal....your still making your nut because you left yourself wiggle room in your original offer.
If she doesn't...we can go on to the next offer/explanation.
When a salesman tries to lead me around by the nose like that and can suddenly come up with a ten percent reduction in price I'm inclined to show them the door just on general principle.
I second that thought. If you offer 10% right away- I start to wonder how much more padding is in there. I don't like to play games like that- and refuse to. I understand you gotta eat and your kids need shoes too. And I don't mind paying a fair price. But I DON'T play sales games. I have to feel like I can trust you in order to do business with you. And by padding your estimate 10% just to be able to try to "sell" me a job, you lose that trust.I'm not saying it's a tactic that won't work for most people- I'm not qualified to say that. What I am saying is that if you pulled that on me, I would end negotiations on the spot and start talking to the next guy in line. I won't try and supply my own materials. I won't ask you to "sharpen your pencil" and try again when you present the deal. I won't play the consumer games either. If I don't like or can't afford your bid, I'll tell you why and we can talk about it like two adults. Maybe I'm not a normal customer- I don't know. But as the person selling your job- I would hope you would be savvy enough to figure out how I operate and adjust your pitch accordingly. I'm pretty sure I almost NEVER get the best (i.e. cheapest) deal in terms of absolute dollars. But I am almost ALWAYS happy with the end result and the price I paid to get it. Different strokes for different folks I guess.So ORM- especially for a $1000 job- I (as a consumer) say stick to your guns. I called you because someone I trust recommended you or because I saw some of your work somewhere and liked it. That's in the back of my mind too. Easy for me to say I know- I'm not running a business in these tough times. But I see a lot of guys in the trades that immediately want to drop prices in the name of "getting the job". And that's too bad- customers almost expect that now. You've got to be comfortable doing the job for a quoted price. The minute we start beating each other up on the cost of the job (especially for sub $1000 work) you start to resent me as the customer- which can affect your craftsmanship. I would much rather you tell me your bid as originally submitted is your best price to do the quality work you know I expect. And then invite me to call you when I am ready to submit a deposit to get on your schedule. Someone here once said you should be pre-qualifying your clients. On every interaction I am forming an opinion of whether or not I can work with you. You should be doing the same to me. Just one consumer's opinion.
Edited 10/20/2009 7:59 am ET by frontiercc2
We don't offer ten percent right away. We offer our full price right away. When they tell me that they want to shop, I offer and inducement to sign now, with a discount that will result in them getting the same price if they shop hard. Why would we do that? Because sales takes time and we'd rather work at a slimmer margin than walk away with nothing. We know that if they shop hard enough, they'll find a quality contractor that is willing to work cheaper...but there is a limit. We are simply willing to go to that limit. We also offer the right to tear up the contract. Its a win/win offer. Sign now and save us the time coming back. If you continue shopping and find someone better, tear up the contract. Our normal time for that is three days but we'll extend that option up to two weeks? What do they have to lose?
I forgot to mention that we don't reset clients that "beat us up" for 10%. We LOVE them!We'd rather operate on a slim profit rather than no profit. Ideally, we want full profit but we also like to eat. I know you guys hate to negotiate but you also aren't really paying anyone a sales fee either. Start adding a ten percent sales factor on top of your sales and see if you can sell your jobs without negotiating. Yall are so focused on price that you fail to see the big picture. There is a lot more going on than just price. The goal in the sales presentation is to sell the job first, before money is mentioned. At that time, the client already wants to use our services. They are dissappointed when the money seems to be higher than what they want to pay. There is already a rapport. Then, a discount is offered...hey...if you want to toss out the relationship even after you've decided to buy our services...that's okay. We can't win them all. The first time I saw this close, a hardened single mom signed. Her 23 year old son came out to talk to us when we were leaving and said "I can't believe that you got my mom to sign. SHE NEVER SIGNS WITH ANYONE ON A FIRST APPOINTMENT. You guys are good!" I cannot take credit. My partner knows when to pull that option out of the bag but it's really not a hard thing to offer. It's a bonafide ten percent savings off our normal pricing. Our normal pricing will deliver about 15 to 20 percent profit, which isn't really excessive. After giving up 10% of the gross, we are down to a very low margin..mabye 2 or 3%...but we'd rather keep working and cover our overhead.
We've never been asked to leave.The explanation is simple. Our sales guy is scheduled for three appointments every day. If he has to wait to close the sale, that means he'll have to go back to get the signature. Since going back will result in one less showing on that day, it's cost efficient to give the discount and both win. There will always be some people that take offense to anything. You probably are one of them. At some point though, you have to make the decision to buy. You will interview another roofer and maybe he'll offer you a discount to get the sale. You'll toss him out too. Then, you'll get a third estimate. The guy will give you the same full price that we first offered and you will take the deal...thus losing your ten percent discount that you were offered. You will be biting your nose to spite your face. So, lets talk about the odds. If my logic is correct, we will be in front of you 1/3 of time. We will get tossed out two and viola, we will be the third guy in 33% of the time and close at full price! So be it.
3 sales call a day is the schedule
2.66 hrs per sales call. Return call with sales pitch already made and signature only required adds 2.66 hrs to the day ? Doesn't add up to me.
Will you offer me another 10% if I hesitate when you return for the signature?
Life is Good
Happens all the time. I usually say something like -
"I think that's smart. I don't have all the answers, maybe someone else will have a different approach and know a better way to do this job. All I know is, if we're going to do this work, the way we've planned, I have to charge what I've quoted.
Anyways, please let me know if you want to proceed and we'll put you on the schedule. If not, thanks for calling. Nice to meet you and I hope our paths cross again."
But we're all different. Some customers WANT to negotiate. They ENJOY it. So do some contractors. I think it's important to be yourself and eventually you'll find enough people with similar values to deal with. They'll appreciate you, and visa versa. It's dealing with the bad matches that drags me down, wears me out, so I try to avoid it.
Here is my experience with the clientele here.I all their bluff and explain politely why I have to make what I make to do a good job I can be proud of and they can be happy with, but that I can't possibly work for less, then gather my things.If the stop me and agree to my terms, I know they were just trying to negotiate some off the top and had already made up their minds to use me. If they let me walk away, I know they are more interested in the bottom line and price shopping and not the right customer for me, so I am happy that they are happy to see me go.
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I've taken the sales courses and read the Carnegie books so I understand exactly why you are doing it. I've also worked as an installer for a company that sold sunrooms using the same tactics. That approach is bound to work on some customers and the nature of your business is that you are looking for those gullible people.What it says to me as a customer is that you are padding your jobs and that you have sufficient pad included that you will offer back a part of it to prevent me from talking to someone else to discover their price. After all, it's only your word that everyone else will be in your range and you haven't established any credibility with me by starting out ten percent above what you will do the job for. It's even worse if you tell me that I have to sign right now in order to get that discount. As far as I'm concerned, selling me the job is about the quality of the job, not sales tactics that maximize your bookings. I want to hire someone I can trust, not someone who is slipping it to me wherever they can get away with it.
"That approach is bound to work on some customers and the nature of your business is that you are looking for those gullible people."Thats just not anywhere near the truth. The reality is that we have a business model that allows us to earn a profit. Yes, we attempt to do the evil thing....earn a profit. Do you think 15 or 20% is "padding" a price? If so, then I guess we can just agree to disagree because you'll never understand the point of view. "you will offer back a part of it to prevent me from talking to someone else to discover their price."Again, not true. We will bend over backwards and allow the client to continue shopping. Its a "no risk" signature. No deposit required and we will rip up the contract if you find a better contractor. Surprisingly....WE ACTUALLY WANT THEM TO SEARCH OUT AND FIND A BETTER CONTRACTOR". Why? because we know that the more they talk to others, they will become much further assured that they are doing the right thing by contracting with us. And I have told them just that!
Save it for the potential customers.I didn't call profit evil or suggest that profit was padding but I'd suggest that if you are giving up your profit to get the job, the business model isn't allowing you any profit and may need rethinking.Bottom line for me is that I look at your type of company and see a couple of extra cost layers and a hard sell approach dependent on volume of prospects rather than relationships and perception of quality to cover those costs. I can't see how you'll make that work if indeed you are discounting your profit instead of playing with the pad that you haven't actually denied including in your estimates. Indeed, I'd suggest you are dependent on gullible customers who will accept what you tell them without skepticism.Don't get me wrong, I've nothing against anyone who wants to give it a go with your approach, but having seen the model in operation up close, I won't hire them.
"I didn't call profit evil or suggest that profit was padding but I'd suggest that if you are giving up your profit to get the job, the business model isn't allowing you any profit and may need rethinking."
Who said the business model isn't allowing any profit?
You haven't answered the question. Do you think 15% or 20% profit is excessive?
The next question is this: Do you set a profit margin up and then refuse every job that doesn't fit that mold perfectly? Do you shoot for 20% and sit home if you only get 15%?
Maybe in your business, your profit margins and cost of doing business are variable and you can't really pinpoint the exact amount of your costs. We can and we do and we are quite comfortable working on a 5% profit if the choice is sitting out a day or working.
Would we want to work all year for 5%? Absolutely not. But, if we start out at 20% goal for the year and fail and only get 10%, it's certainly better than shooting for 5% and finding out that we didn't earn a profit, for all the various reasons that seem to jump out and bite us time after time.
What's your fixation with what I think is excessive profit? What you and your customers agree on is no business of mine and what I think is fair profit is really no business of yours. To top it off, it really has nothing to do with the conversation anyway.When people ask what I will charge them I'll work out my price and present it and the underlying work I'm proposing. If they would like me to do it they hire me at that price or we renegotiate the scope of the job to fit the budget. Period.As far as I'm concerned you're free to run your business any way you choose and charge as much or as little as you want. As I said, it's none of my business. My response to you was to simply point out what my reaction as an informed carpenter and past salesman to your sales tactics would be and suggest that you want your prospects to be other than like me.
My fixation on getting you to answer the question is to get down to brass tacks to see if offering a discount matters. I just wondered if you had a hard and fast number that you ALWAYS bid, or maybe your bottom line wandered a bit. Our bottom line wanders. Thats why we aren't going to jump off a high building if we take a small hit on the profit. One of our goals when we offer discounts is that we want to be steady covering our overhead. I guess you might think of it this way: we'd rather work all year and cover our overhead, than sit at home some days and miss covering our overhead, because we were too fixated on getting a 15% profit on each job. Maybe some day we will have the luxury of saying no to ALL discounting because of backlogs that we have created...but I'm not envisioning that in the near future. Anyways, I offered one response to the op about how he might respond when a client tells him that he wants to talk to other contractors. I really don't feel like I've offered him anything that I need to be ashamed of. The last lady that took our offer was very pleased with both her roof and her price and she's been a very good reference for us. She's got an extra $800 in her account that I wish was in mine...but we can't win them all. If you want, I'll go into the files tomorrow and see what our profit margin was if it will help you understand the numbers.
I'm not suggesting you need to be ashamed of anything and you certainly don't need to go through the numbers to prove anything to me.As a potential customer I see your approach to business as running a sales agency with the sales being the primary concern and the actual job as an incidental secondary concern. Your sales, supervision, installation and billing are all done by separate entities so there is no single responsible individual where the buck actually stops. There is incentive for the salesman to make unrealistic promises land the job to earn his cut and incentive for the installers to underperform in order to get on to the next job quickly and increase their take. Supervision isn't really aware of what actually happens with either because it's divided over many jobs at once and not present 100% or even 50% of the time.For me that raises red flags. I want a good price, but far more important is getting a good job that flows smoothly. Ten percent off amounts to pennies a day over the life of the job so really doesn't concern me greatly given the value of the asset I'm maintaining. If you can make the model work power to you, but the structure of the model you're using is predisposed towards failure.
I wish we were as big as you make us out to be.
Right now we are installing about 3 roofs per week on average. I'm supervising them. The roofing crew that we use is excellent...much better than if I was the guy doing it. They are fast too...but shouldn't I expect that...they do it every day. They are just good at it.
They speak English too!
Luckily, we are a focused business so the sales people don't have to overpromise. We just go over the installation, step by step. Its a very simple installation too...after all, roofing isn't rocket science. In general remodeling, I could see where a salesguy would overpromise...but this is roofing....a very focused one day job.
One of the most beautiful things about our biz is the competition. Think about how some roofers show up to give their "bids". Some of them scratch the price on a chunk of wrinkled paper LOL.
We actually acknowledge that Sales is the most important element. Then, in the same conversation, we decide that Installations are the most important. Then, without hesitation, we decide that Lead Generation is the most important. Generally speaking we don't give too much credit to the office...but without it, everything else kinda falls apart. It's all important and we are striving to excell in each area. I'm actually a weak link because my greatest asset was on site execution. Right now, I'm project managing and I'm not that good about it. Luckily I have a great crew. They cover for me.
Bottom line for me is that I look at your type of company and see a couple of extra cost layers
Which layers are "extra"? Paying sales? Paying supervision? Paying Office help? Paying Labor? Paying Administration?
I like it. I don't know if I'd feel comfortable using it (probably because in my business that 10% might be the only profit in the job LOL!), but I hate pitching my bid only to be put on hold, often indefinitely.View Image my website
You gotta up your margins. Thats just a fact.
Oh yeah, I know that! Just dealing with the realities of the market here at present. =)View Image my website
I understand that there are market realities but I also understand that most of the fear of proper pricing is located centrally in the contractor's skull. Mark everything up by 66% and you'll have room to negotiate a little.
All of your arguments are rooted in the "volume" argument. You have to visit three a day, you have to close so many, you'll give up x% in order to close and keep working so long as you cover your margin, etc, etc, etc.That's fine- I'm not condemning your model because I'm sure it works- for you. But I likely would have NEVER called you for a quote in the first place. I don't want a guy whose going to sell me a job and then his crew fly through it because their margin is only 5% this time. I don't want the volume guy. I want the careful and deliberate guy. And I understand fully that the careful and deliberate guy often costs more. And let's go back to the original question where ORM said the job was ~$1000. Let's say he had 30% of that $1000 as markup. So he's working a day to make $300. But in order to close the deal he gives me 10% of the total. Now he's only making $200. For a day's work. You mentioned selling for margins as slim as 5%. You telling me you would work a day for $50? It would be cheaper to stay home! For $50 a day go work for HD where at least you're indoors and not killing your body! I stick by my original statement. Stick to your guns. But I'm not selling jobs every day. I'm buying a few once in awhile. And do you really want to sell me a job where I'm going to beat you up over $100? I know some people are like that. Just not me.I'll sum it up this way. Wal-Mart has a margin and they make money on volume for the most part. Stan Foster has a margin and if he had to make a living on volume, he'd starve. Both have a place in this world and economy. If I want cheap and consumable I go to Wal mart. If I want care and craftsmanship that will last, I'll call Stan. And I know I'm going to have to pay for that. Can I get stairs cheaper? I'm sure I can. The question is do I want to?
Edited 10/20/2009 11:26 am ET by frontiercc2
frontier.... i sell 99% of my jobs to people just like you... we develop a relationship, develop a proposal and seal the deal
Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Mike, would you agree that the job is sold on the relationship, before price is discussed?
yes... price very seldom is a problem.... again and again i negotiate myself into a lower price before i have the presentation meeting
ie:
i discount the price before we meet
if i had held my original pricing... i would have sold it at that priceMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Exactly.
If price is a problem, you and I ain't getting the job anyways!
The key to selling is to establish value before price is discussed. We do that. By the end of the presentation, the client KNOWS they want to use us because we've covered the bases better than anyone else. They also know that our prices are inline, give or take a few percentage points.
So, why do some people say no? Lots of reasons. They are trained by the media to "get three bids". They feel foolish if they don't get three bids.
So, what happens when they get their three bids? They tell contractor number one and number two the same exact thing "I'll get back to you." Then, in 75% of the time, they will award the bid to contractor #3. Why? Because they like him to a degree and the price is the same and the contract is right in front of them and they've already done their prescribed "get three bids".
Our goal is to have our signature on the contract, which they can tear up, when they are sitting with the third contractor.
blue--- your methosd isn't for me--- for a number of reasons----but I can see it working well for a lot of people. a number of people have pointed out the value in selling yourself before you ever get to the pricing issue--and if you have sold yourself and your company well enough- the price will take care of itself--- this is generally described as " building a relationship" well- i can tell you something I learned in the last to years- following a hail storm. I spent 20 years-"building relationships' As you know----- for 20 years I worked primarily within a 8-12 block radius of my house---and i can't tell you how many people would introduce me to other folks at social gatherings as" hey-this is Steve Hazlett-- our roof doesn't need replaced quite yet-- but when it does HE is the guy who is going to do it !"--- for 20 years I dealt almost exclusively with folks like that however- that said------- MOST people are not looking for that relationship when they have a roof replaced, windows installed, a driveway poured, the house re-sided , a furnaced replaced etc.-- they want the job done,as inexpensively as possible-and they never want to see the contractor again so there is NO reason your method won't work with a substantial % of those people--- they aren't interested in"A relationship" gotta run,
stephen
"however- that said------- MOST people are not looking for that relationship when they have a roof replaced, windows installed, a driveway poured, the house re-sided , a furnaced replaced etc.-- they want the job done,as inexpensively as possible-and they never want to see the contractor again"And that's the part I don't get. This is my HOME we're talking about. I don't want just anybody working on it. I guess more and more people are treating their homes as just another commodity.
I would tend to agree with you. the people i have done the best with-are folks who have liven in their home for years-and intend to live in their home for years and years. People with a commitment to the community.
But most americans--aren't like that.- what is the Stat?- most americans move every 5-7 years? something like that? they buy their clothes from sri lanka,via Walmart, their toys from china and their food from ConAgra. I want my roofs to last 25-30 years- which is about the limmit of the particular materials typically chosen--- but MOST americans--- don't really care about that--as they expect to be moving in just a few years. since my neighborhood is "roofed out"---most of the roofs are replaced within the last 2 years--what has been best for me this year--is Slate and Tile roof repairs this year---and half round gutters installed. I am actually getting my thumb out of my butt---and looking into developing a web site to concentrate on that portion of the business.
got to run,
stephen
Thats it! Most folks don't seem to care about their home as much as they care about the cost of the work. I think its a reflection of the economy.
Things like this job folks will tell me "I just want it done cheap as its just a repair and I am not going to be living here in 5 years".
Maybe its also a product of the environment? Folks in Florida seem to move alot more than in other areas. A few years back I knew several folks that moved to homes just a few miles away to have a "newer place". Seems like a lot of work to me but I am the guy who will stay in one place for 30 years and just keep making it better.
okie dokeView Image my website
I love reading these "sales help" questions.People ask for sales help, get real tried and true sales help. Then everyone plies on, saying why they in particular would not buy from that approach then more people pile on saying how tried and true sales tactics don't work and never will.This place is amazing and quite a few seem beyond help. But they most likely won't stop posting stories about how their sales are down and what oh what can they do to save the family business.
I kinda agree. Its actually quite comical. The funny thing is that there is such anger at a guy trying to give someone a break LOL! Here we are willing to work under our normal rates and we get raked over the coals. We actually have met people like that and we can't get out of there fast enough. If you want to be angry at me because I'm willing to work for next to cost...I'm outa there LOL!
There are plenty of postings around here that are slow to no work. You seem to have work, at least leads to follow up on. Also seem to have a set sales pitch. I guess some just got by when the money flowed and are willing to argue themselves out of work. I'd not adopt your particular style, word for word for my business, but I do appreciate reading of any style that works.It never hurts to adapt and add something new to the old bag of tricks.
I understand the 10% rationale from your side. Do you think that Mrs Smith thinks "did he mark up 10% so he could mark it down"?
My neighbor was getting bids to get his roof done and asked one of our other neighbors, who is a contractor to submit a bid. The neighbor contractor submited his bid and when it was not immediately accepted he lowered it. My neighbor said to me how come our neighbor/contractor didn't offer the lower bid right off the bat? Good reason not to do business with friends or neighbors?
what do you say when you give a customer an estimate for something small (under $1,000) and they say they want to get a second estimate?
Two somewhat divergent thoughts:
#1. Well, if you'd charged for the estimate instead of giving it to the HO for free, maybe he'd value it a little more.
I only give away 'ballparks', not detailed estimates or quotes. That ballpark figure is enough for the HO to determine whether or not we are on the same planet. If we are, he can hire me to prepare a detailed estimate. If we are not--example: he thought his 5000SF roof would cost $4k to strip, reflash, and reshingle--he'll say something about getting a second estimate.
Some people really have no idea what things cost, not to within an order of magnitude. That's what the ballpark is for. It has relatively little to do with the actual final cost, but will let the HO know quickly whether he's dreaming or not.
If he's stubborn, he'll require a second, independent smack in the face from reality before he believes. The second estimate may bring him back to me...or not, depending on whether he can afford to do the work at all, and what kind of contractor provided the second estimate. In cases like this, I simply have to be polite and professional, and wait and see how it turns out. I'm not going to try to hard-sell him and force a close because, in my experience, if that technique works, I won't like working for him in the long run. And I may have trouble getting paid.
#2. For a lot of people, that 'small' <$1000 job isn't a small budget item. Some families living from paycheck to paycheck can get their whole second quarter well and truly ruined by getting smacked with a $400 repair bill on the car, or a $650 repair to the roof or plumbing.
Hell, I've been there myself more often than I wanna think about.
If I'm dealing with people in that situation, I will do my best to work with them so they can afford to do what's gotta be done, so long as I don't lose money. If they sense I'm doing that, they won't usually go looking for another estimate.
But if they're just low-class, low-ball buyers, I'll sense that too, and say, "Fine, have a nice day. You've got my number." No way am I gonna start bargaining with people like that. I walk away, chalking up the 45 minutes wasted to the cost of doing business.
Dinosaur
How now, Mighty Sauron, that thou art not brought
low by this? For thine evil pales before that which
foolish men call Justice....
Edited 10/20/2009 2:22 pm ET by Dinosaur
Feel lucky they didnt hire you. If they want a second estimate you either didnt sell it or they're very cheap IMO.
Along the same lines, i've become a little annoyed with people asking "can you do a little better?"
My new response is sure I can, and add $100 to the price. Let them laugh then add it at the end, after all, they would hold you to it had you reduced your price by $100.
Family.....They're always there when they need you.
I ask them if they would like the names and phone numbers of some other folks that could do the work .
I did offer that...haven't heard back from them yet.
I ask them if they would like the names and phone numbers of some other folks that could do the work .
That is a passive aggressive response. I'd be surprised if you ever get a call back after saying something like that. Does anyone take the names and numbers that you offer? Have they every taken the names and numbers and then later called you back and awarded the job?
Jim, I think it's just a different way of doing business, which is fine, because there are lots sof different types of customers.
As a one-man band (most of the time), I can't do enough volume to make a profit working for the kind of customers you probably make most of your sales to; on the other side of that coin, your company probably wouldn't make many sales to the kinds of people who hire me because they're looking for additional intangibles your business model can't afford to offer.
Which doesn't mean that you are cheating your clients, or that I am cheating mine. Yours are buying something different than mine are, and I'm not in business to sell that, just as you're not in business to sell what my clients require.
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
You are exactly right. Remember, before I offered a discount, I specifically asked if they were satisfied with us a company. The purpose of that question is to make absolutely sure that there are no hidden objections. For instance, if they were looking for someone like you, they might come out with that objection then. We would then have to overcome that before we get to price cuts to win business.
I have been fortunate in that I have never had to sell a job so as everyone down your way has started saying, I have no dog in this fight.
I do think you are putting too much faith in your customer's response to the question as to whether they are satisfied with your company. Firstly because a short sales pitch isn't enough for them to make that sort of assertion, and secondly because it would be a rare customer that would consider it worth their time to tell you the truth rather than just see you pleasantly out the door and not call back. You are really using it as a rhetorical question and they recognize that.
Theres probably some truth to your observation but generally, the customers will come out with their objection if you've built your rapport with the. There really is a decent relationship already created by the time the offer of a discount for signing is offered. By that time, we've been sitting and discussing the project for at least an hour.
Keep in mind, we will run into all kinds and some clients will not be offered this deal. We really have to read the situation. Sometimes, the best answer is "I knew you wouldn't sign today but I'd feel like I was not doing my job if I didn't ask. Thanks for the opportunity, I'll be waiting to hear back from you when you make your decision."
I'd say at least 20% of the clients I've sold or sat with get that type response.
You know Blue I really shouldn't have dipped my oar into this discussion. It isn't something I've done, while many of you do it everyday. I defer to your experience.
I don't know what others think, but I welcome your input. I think others are too. You were upfront about your experience and everyone is a buyer at some time or another. I've learned in sales seminars that in every conversation, someone is selling and someone is buying....or not buying.
A tool that I often use when they balk at price (or have sticker shock) is to offer to do temporary repairs that will hopefully last until they're ready to buy and then I'll credit the price of the repairs. That way, I either get paid now for work now, or I get paid now to give a discount later. Of course, this will only work on situations I know we can fix temporarily. The downside is that we've fixed a few too well.copper p0rn
there is another downside to that plan--as you probably know, Grant. I can think of a few customers--who I feel like i have helped out with repairs like that------ the roof is near the end of it's life-- really SHOULD be replaced--- but customer can't swing the cost------- so the IMMEDIATE problem in one area of the roof- I repair Next year there is another immediate problem in another area of the roof-- I repair, year three-- yet another area repaired Year FOUR----- I drive by the house on the way to another customer--- NOTICE the ENTIRE roof replaced by someone else. On the onehand- I think" at least I got 3 repair projects out of them"--- on the other hand I am also insulted and feel "used"---.
stephen
on the other hand I am also insulted and feel "used"---.
I've learned not to take it personally, and I typically make a higher margin on repairs.
The way I look at it is at least I got something back for my time invested if I just get the repair. I'm sure it's happened, but I can't remember losing the big job if it got done at all.copper p0rn
I make a much higher margin on repairs as well-------
but I can't help but view the situation as----------" gee- when your money was tight and you needed my help-I held your hand and nurse maided your roof along for years-untill you could afford to replace it--and THEN you don't even give me a crack at the roof replacement project? WTF!, LOL" Of course- partly I am just feeling pizzy because I spent the better part of a generation taking care of one neighborhood-----and then over the last 2 years I watched the better part of my lifes work needlessly thrown into dumpsters.
stephen
over the last 2 years I watched the better part of my lifes work needlessly thrown into dumpsters
Yeah, thats gotta hurt. Makes me think of how I felt when I went back for some minor warranty work on an expensive room addition I did - and found it being used to keep the puppies in (reeked of doggie p!).
But hey, your kids turned out good - there's the better part of your life's work! In the bigger picture, the other is just background music.View Image my website
wanna know what really hurts? the church roof i did.
my parish needed to replace a structurally unsound church-------and as these things go--were low on funds Parishoner "A" who headed up the whole thing--- asked for my help on the price--and I ended up roofing a 140 sq. building for, i think, under $3000-- less than wages actually------ but I was happy to do it-- because in the back of my mind I knew my family,my friends ,my neighbors-would be married and burried under my roof Particularly my father-who was approaching the end of a terminal illness.
Pastor retires, new pastor arrives-- doesn't know me---- Parishoner "A" is now kind of in the background-- parishoner "B" is now in the foreground Hailstorm arrives-----parishoner "B" beginns wheeling and dealing----
wants to work a "deal where we declare the 2 year old Lifetime shingles a write off-and finagle a check from the insurance company big enoiugh to replace the church roof---and also the old leaking flat roof on the school problem is-- the church roof is fine- and I don't play ball Next thing I know---- i am driving down the street- and new shingles are being craned onto the church 3 days later-- MY roof is torn off--and Parishoner "A" calls me in a panic-- they have all sorts of questions about the structure- can I help them out and answer the questions so the other contractor can proceed with the work? Next year or so- my Dad dies---and the funeral takes place under somebody elses roof i walk my dogs past the church all the time----- there are shingles sliding off all over the place-- let parishoner "B" climb up there and fix 'em.
My wife and I gave 'em well into 5 figures to the building fund to construct the church--and practically a freebee on the roof itself----
that's a fine slap in the face, ain't it?
stephen
3 days later-- MY roof is torn off--and Parishoner "A" calls me in a panic-- they have all sorts of questions about the structure- can I help them out and answer the questions so the other contractor can proceed with the work?
You could have said, "Uh, the roof seems to be structurally sound - there does seem however to be some dry rot in the rafter...in your eye!" hahaha. Just kidding. Gets frustrating sometimes.View Image my website
I just had that happen to me today when a guy I had been working with decided to call someone else for his large project and still wants me to do the small crappy stuff. Ahhhhh....No!
Stephen, I'm pretty sure you made every penny that your marketing plan called for on the repairs so you really don't have anything to feel used about. I know I'm not telling you anything that you already don't know. But, it is worthwhile to delve into the "whys" of why they didn't call you to offer a bid on the roof. My guess is that they simply couldn't, or wouldn't, afford your services and simply shopped till they found the lower price. An alternative guess might be that they thought the repairs were costly and thought that you were overcharging them and taking advantage of them when they were in need. I just wonder if a systematic approach in follow up would have landed them. Or, maybe they needed you to finance them.
how do you overcharge someone---THREE years in a row?
stephen
Steve, that kind of nonsense happens all the time; I keep telling myself not to take it personally, but it ain't easy.
Arrrggghhhh.
Now you got me thinking about the ritch 'murrican lady who wheedled me into doing all her little jobs for years while holding out the hope of a big--$120k+--kitchen remod and wrap-around gallery add-on 'next year.'
Next year finally came about 6 years later...when the chambermaid I'd been supplying her phoned me to ask what to do because a delivery truck had just showed up and unloaded a huge SubZero fridge, Hobart DW, Jennair cooktop, etc., etc.
She'd Hired the neighbour's BIL's buddy's GF as decorator, and her ex to do the carpentry. Never even called me for a bid.
Arrrggghhhh.
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
I'm finishing a new garage/guesthouse that had been mowed down by a four foot diameter doug fir say 1983 PacNW windstorm
included about 72 square wholehouse cedar shingle 14 / 12 roof that a helper and i did by ourselves - handnailed and 3" batterypack makita disc saws our tools of destruction webbing #4 copperwire every 8 courses or so hinder moss growth the equivalent of three stories in the sky ( practically ground level for Sphere )neighbor friend comes to book club & she likes work & I have done projects for other friends and they have projects that i have done & she likes - all right up my alleyI meet w/ her husband about a big rambler type house reroofing a little closer to the lake - all goes well & he likes my ideas better than an architect he had spoken w/ about chimney chase & cricketnot accustomed to much roofing but always ( then ) like being around cedar and just cuz they were considering red cedar i was in their camp
left a bidsix weeks later never having heard from them i get a call from her about 6 minutes after 7am - she's in bed breathless crying john your helpers are cutting in the skylights in the wrong spot
"Linda this is the first I've heard from you guys since I left the job proposal" - i heard her cuss & yell her husband's name & the phone went deadthree months later in a starbucks line ( for a future addicted client ) run into her husband & he said oh i wish we had had you do it
That's a great story John. I can hear the phone call now. I'll bet he didn't get any of that item that Piffin was concerned about for a while.Also John
That is great!!!
People are funny creatures. I can't answer that question...I was just brainstorming.
I think that is brilliant strategy. Your short term goal is to help them. Your long term goal is to get the next roof. Roofs are great for that strategy. In sales jargon, that would be called an alternative closing. Shame on you for using such high pressure tactics LOL.
For instance, if they were looking for someone like you, they might come out with that objection then. We would then have to overcome that before we get to price cuts to win business.
Sorry, bro, but if they were looking for someone like me, your salesman could offer to pay them to do the roof and he still wouldn't get the contract.
You sell to price shoppers and Yellow-pages users. I never give discounts, work almost exclusively by referral, do almost zero advertising, and don't even have a listed business phone number.
You work on quotes per job or per square; I work by T&M. Your salesman shows up in a fancy car wearing a snappy suit and carrying a briefcase; I show up in my work truck, wearing clean jeans and a plaid shirt, and carrying a metal clip-book. Sometimes I even have sawdust in my hair if I'm on the way home from another job when I make the call.
Your salesman leaves a phone number that rings to his voice mail; I give the client my home phone number, and the client knows they can call me anytime they need to.
Some people just have to feel like they've gotten the bettetr of a salesman, so they'll love that approach of yours and brag about it to all their friends. Others are afraid of buying something as 'mysterious' as house repairs, so they are easily impressed by your prosperous-looking salesman and all the trappings of a big corporation.
I don't have a chance of selling to people like that, and after years of trying, I finally figured it out. Duh.
But clients who want 'someone like me' are looking for something diametrically opposed to all that. They want a one-to-one relationship with someone they trust who will actually be the person physically doing the work. They do not want to deal with a 'contractor' and even less with a salesman. With some reason, salesmen as a class have a historical reputation almost as ripe as do politicians.
Don't get me wrong; I respect an honest professional salesman as someone who can do a miserable, almost thankless job that I can't. But there are damned few of them.
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
You have nothing to be sorry about bro....except that you are painting a picture of another company LOL.
No suits in our firm. Yes, we'll sell to price shoppers and those that don't price shop. We're not in the yellow book yet...we will be in the next one though and yes we have sold referrals already too. It's all good. And, we show up in roofing trucks for the estimate.
Come to think of it, we don't even have any salespeople. We do have an estimator though.
We leave them lots of ways to contact us, including cell phones and office phones. Yes, I take calls at 7am or 9pm...at home.
You are right, each customer has their preference as to what they want in a contractor. Some will want the bigger firms. That is our target market. Others will want the one man bands. They envision a cheaper price...but, the beauty of the roofing business is that I've never met one that wants one guy stripping and laying the shingles on their 40 square roof alone.
And, don't sell yourself short. You'd probably be a good salesperson if you had a good company to sell, good products, lots of leads and a decent paycheck for delivering the signed contracts. For me, I find it significantly easier selling roofing services for our company right now than I ever did selling carpentry labor. The reason is simple: I believe in our roofing company more than I ever did in my carpentry labor crews. Because, for the most part, the carpentry labor crews were always wishy washy...sometimes I'd have good guys, other times I couldn't even find one loser laborer. In roofing, I have a consistency that I can count on.
I was confusing generating leads with closing sales. I am miserable at the first--I just plain hate it; my skin ain't that thick--but if I believe in a product or service, I am able to transmit that to the prospect.
And I believe I do better work for what I charge than anyone else around here.
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
"Have they every taken the names and numbers and then later called you back and awarded the job?"
Yeah, I've had that happen a few times. Goes something like this -
I give them the price, tell them to take as much time as they need to make a decision.
They call and say something like - "we really like your proposal, but man, we sure didn't expect it to cost like that"
Me - "Yeah, I know. It surprised me how expensive it turned out, too."
I wait for a response. But at some point, if they don't commit, I say "...listen, let me give you the name of a cabinet shop I deal with all the time. I'm not sure how busy he is, but he does really nice work, and he may be able to build this for you cheaper, or sooner, or differently (cheaper) than I can. Talk to ______, he's a great guy and first class craftsman, worked with him off and on for 25 years now."
If they show interest I give them the number.
More than once a few weeks later the potential customer has called back and said something like - "Jim, are you still willing to build that whateveritwas for us? And by the way, we DID talk to ______, and we were impressed, but we really want you to do the work. How can we make that happen?"
But I agree with Dinosaur. Everyone is different and what works for one person (or business) won't necessarilly work for someone else. If what you do works for you, great. Keep on keepin' on. I was just trying to answer the original question and I think it's really valuable to exchange ideas about building, selling, business practices...whatever. There's no right or wrong way - just what works for different people/businesses.
Customers are all different and contractors are all different. It's all in the delivery. Two contractors can sit and say the exact same thing, exact same words. One will get a smile and one will get escorted to the door.
Bids vary greatly in construction and the factors influencing them are just as diverse,
With my company, I can usually give three types of bids.
1. I'm busy and could care less if I get the job. (High)
2. I'm busy for the time being, but want to get the new project I'm bidding. (Normal)
3. I'm sitting in my office for the fourth day in a row trying to figure out who I can call who maybe might have any type of work for me to do. (Painfully low)
Other factors include if I'll be working for a GC, homeowner, man or woman, wealthy or working-class, somebody I'd like to work for more in the future, etc.
So if I bid a job like the first case where we're so busy I can afford to turn down work, and then suddenly I lose my next job for any reason, now my bid becomes negotiable. So it might look like I was "padding" my bid, but I see it as it is what it is. It might have been expensive to the customer, but the customer usually doesn't comprehend that they are in no position to be telling the contractor what his costs of business are.
I don't walk into a Ferarri dealership and tell the salesman his cars are too expensive because for one, I'm not in the car building business and two, if I can't afford it I shouldn't be whining about it -- I shouldn't be there in the first place wasting the salesman's time.
Case in point, we just did a bid to fix a leaking ceiling on a customer's house we framed 5 years ago. The roofer didn't seal a rubber roof properly and we think the water is coming in under one the lap joints. The house was bought for $1.4 million and it's a summer house on the ocean. So my bid was higher than it would be for a $200k 2 bedroom ranch. I'm also much more likely to throw in free work for a working family with 3 kids than an older wealthy couple trying to fix up their seventh rental property.
Another thing most (if not all) customers don't realize is that some construction materials can be expensive if I include them in my bid. I never feel the need to justify my bids to the customer. They can certainly get other bids if they want. They can get 800 bids for all I care, but that's also the type of customer you probably don't want to work for anyway.
The house was bought for $1.4 million and it's a summer house on the ocean. So my bid was higher than it would be for a $200k 2 bedroom ranch.
Why? Because you believe they can afford it or you need to work to a higher standard and it's harder to work on?
I don't price based on the value of the home, but I will charge more for basically the same work if the home/homeowner tells me that I need to achieve a higher level of perfection.
It's partially because they can afford it, yes. They are also more than welcome to solicit more bids if they feel mine is unfairly high.
What I've learned in working for the wealthy is: they don't care much about the price as much as they care about wanting it done immediately. When they call me for a bid, I make it on the high side and usually tell them I can start right away.
I like your approach. You would have to walk a fine line in making that delivery, but I agree, its not impossible. And I could see where you could get the callback. The key to your delivery is sincerity.
Jim ,
You crack me up dude !
I've restored , installed and repaired roofs in my area for over 30 years and you started selling them 6 months ago !!!
I'm very well known here and most all work is referral . In the 5 or 6 times I've used that line - they all have said they wanted me to do the work , just wanted a little price break . I've always refused that option , but have done the job most times for my initial quote .
Even though I thought Observer was dead on the money calling you out , I didn't pile on you .
You're a piece of work . You must need a wheelbarrow to haul your ba**s around
I'm with you, slateman. (I'm nowhere near in your league, can't even see your league from here), but I will also give out a couple of names when people mention other estimates. Or, I'll ask who they had in mind, and give feedback.
I can often discuss the pros and cons of different companies, tell a few stories I've heard about each, etc. I can always find a good company or two to refer, but I can always point up differences in the way the job will go, too. Sort of compare the good/cheap/fast triangulation of each.
In a way, by openly discussing other companies, I can further sell the things I do best. Plus, I work in a small, highly networked city. Being confident and non-pushy comes back to you in a hurry here.
I'm not knocking Blue's method either, if it works for him, but it seems like that method might be hard to sustain if you wanted to be in business in one tight-knit place for a long time.
k
I sold and installed my first roof back in 1982. Sorry if my offerings offend you.
"I sold and installed my first roof back in 1982. "I gave up my virginity back in 1970, but that doesn't mean I've been getting it every night since then
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
"I gave up my virginity back in 1970, but that doesn't mean I've been getting it every night since then"
Hey, Piffin...me neither!!!!! Maybe we spend too much time here and not enough with the Missus? Oh wait, she is the one that told me last night....I think I hear the FHB guys calling you...go play on the computer and let me sleep".
You shoulda married a ho.
"You must need a wheelbarrow to haul your ba**s around"I don't think he is licensed for that kind of overload - even on the Texas highways
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
That depends on where you are and what tone of voice you deliver the offer in.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
mike,
It doesn't matter to me if it a $500 job or a $25,ooo job.
when they say they want to get a 2nd estimate-- I say"- ABSOLUTELY-- you are very wise and I completely understand. If you decide you want us to do the project, let me know and we will put you on the schedule"-and then i leave.
Period
Maybe they will call-maybe they won't--- but they can ALWAYS get a lower price---so don't invest any further time in it.--- just move on to the next one.
stephen
<they say they want to get a second estimate?>
"That's fine. There are other good builders in this area. I hope your project goes well whether you choose me or one of them."
Sometimes they call back. Other times not.
j
Great thread everyone. It's very timely because in about an hour I'm going in to defend a bill that I gave a customer for a t&m. It's for a substantial amount of money which he can easily afford and I fully intend to stand my ground. By the way, he is ranked in the top 100 litigators in America. Should be interesting.Anyhow, with all these answers, you have to keep in mind that you are playing a people game. Everyone is different. Blue's approach is the classic Carnegie, or Sandler training and for anyone in sales is recognizable. When I hear that rehearsed lingo coming, I back off because I know it's a tactic even if it's a bit different with each customer. With some it works fine and I say all the power to you and I have a lot of admiration for someone who brings in the jobs. For me as the customer though, I need space to think.I just went through this with a customer...and they happen to be friends. I gave a bid which I allowed room in, they gasped at the cost and said (very nicely), "We want to work with you, but it's a huge number and we have to get a few other quotes." I said absolutely and in fact that they are smart to do that just to have a good feeling about going ahead with the job.
The doubter in me thought that I had lost the job. I almost called them up to let them know I could cut it down by a bit...but I didn't, and I do need the work. Yesterday I came home to a phone message saying "You're our man...when can we start?"I'm glad I stuck to my price, but after reading this thread (and I know this), I could have done more to sell the job. I think what sold it was my experience & expertise in what the job entailed. There is a lot of unseen troubleshooting involved.Anyhow, good stuff here. This is what BT should be about. Let's not blow it and get it yanked.
Jeffy- i think your approach is the smartest( it's pretty much mine as well, LOL) I have read dozens of similar threads here on Breaktime- over the years- and I am often amused when people describe the throw away lines they uses-as they are headed out the door Like:" give me a call when you decide to have it done right"
or" when the other guy screws it up--call me to fix it"---etc. when a customer says" I am getting other estimates"- they are usually REALLY saying " no thanks"-- because they ALREADY have a lower price- or they have already decided we aren't suitable----and- I understand the old EGO takes a beating in that case but a funny little put down on the way out the door---- only confirms to the prospect that they made the right decision in declining to hire us the up side to your approach and my approach?-- well I can remember a couple of specific instances where I gave a price to replace a roof----- prospect turned me down--and the next year I ended up doing the neighbors roof because the guy that turned me down was unhappy with the co. he DID accept--and so INSISTED that his neighbor use me the following year. I do NOT help the prospect find another contractor, however. If they don't want me to handle the project I can respect that--- but I am not going to help them find somebody else!
stephen
As you said, there's no sense in a backhand jab at the customer on the way out the door. Imagine if you went in to look at a new saw, decided to hold off, and then heard the sales guy call you a tightwad on your way out the door. Last time I'd show my face in that business. I think that, although there are a few uncurable lowballers out there who should just be avoided altogether, many homeowners legitimately have no clear idea what a project might cost. The second opinion can confirm that both contractors are in the same price ballpark so the choice comes down to gut level compatibility preferences.When it comes down to it though, I really just hate to haggle. Some guys enjoy the give and take of working out an agreeable cost but I don't. I have cut my estimates in the past but usually cut too much and then resented it later which puts a bad taste on the job. Also, the OP was about a job under $1K in total. For something that small it seems to me that by the time you've sat down to go over your numbers again you're halfway through the total margin for the job anyway and it's not really worth it. Finally, I'm fortunate to be booked about as far into the future as I want to be. It's easier to be kind to the competition when there's lots to go around ;). It may not last forever but I'll appreciate it while it's here. j
Heres the thing about those 1000 dollar jobs. We dont' actually bid anything like that but if we did, I'm sure I'd have a 100% markup. So, I'd have 500 cost and a selling price of 1000. If I discount 10%, I'd be selling at 900.
I'll do that deal every day.
So, you don't do small work and if you did you'd be marking up 100%. In an attempt to price yourself out of that kind of job or for some other reason?
j
Possibly he's attempting to run and sustain a profitable company? I realize that seems to go against the local logic here.
j.... you are really misreading this board... we are all about learning how to run profitable businessesMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
No, I'm serious. To me 100% markup over actual costs (or estimated costs) is high. Maybe it's not unreasonably high, though, and if so I'd be interested to know how that all falls out. j
No, we are not trying to price ourselves out of those jobs. We also do not want to be seen as a company that overprices and is too expensive....but.... the realities of small jobs are that the ratio of mobilization effort, office labor and exposure (risk) is too great to price it at the normal 1.66 ratio. Our goal is 8k jobs. We've had a flurry of 5k jobs and we are looking for ways to change that.
That's interesting and good motivation for me to take a look at my own numbers. 100% seems high to me but I should probably take some time to figure it out from scratch. Are you maintaining an office that's open and staffed regular business hours for customers/leads to come through? j
We just moved into an office. We were looking for a shop/office and never quite found what we wanted. So, we finally decided that we better get organized and leased 1000 sf of office. Its not going to generate any walkin leads though. We can conference with a client in here but they wouldn't find it unless they already knew about us. We do staff it during regular business hours. It's possible that we all might be out of the office...but you can come on in and wait LOL.I'm still here now and it's almost 11pm. That should be late enough for one day. As for pricing: I don't have any problem doubling the costs to do a job. For instance, I will be pricing a small job for a customer that has already received a roof. He wants a couple hundred feet of gutters and I'll have to add some high vents to balance his attic ventilation. For sure I'll double the vents and labor to install it and I'll probably double the gutters too. I'm getting the gutters supplied and installed for 2.50. I'll charge 5. That does not seem excessive at all. If I used the Exactimate prices, they would tell me to charge 4.09 or 4.39 depending on the data date. I prefer to round up LOL. I really don't want to do a $1100 job because it takes just as much time to process the paper on that job as it will for the 21k job coming up next week. In fact, the $1100 job might take me longer, as a project manager because I might have to meet the gutter installer and go over some details. And, think about it from the salesman's perspective. If my numbers are correct, he'll make about $135 for writing that order. He'll make about $2100 for writing the 21k job. No, doubling your costs on small jobs is not "excessive". It's probably low.
This thread has had me thinking - and I have too much time for thinking these days - and I think there are two sides to this issue.
The first is the CUSStomer, who will never be happy, likes playing games, etc. No point wasting your time there.
The other is the ordinary person, who is (first) afraid, because this is the first time they've spent money without going to the Mall, and (second) has had their heads filled with all manner of nonsense and fear by various 'consumer' groups.
What we need is a PR department - and not just the usual state-sponsored 'always use a licensed contractor' pap. Heck, I think that sort of ad is the source of half the fear in the first place.
We need to accent the positive: our skills, our experience, etc. We need to make this 'buying' experience of the customer as pleasant as possible.
Keep in mind that they've probably been told, even in school, to 'always get three bids.' We need to counter that in advance, perhaps by showcasing our equipment, past (similar) jobs, and highlighting the little 'extras' that we do. Those extras may be something as simple as having the carpet cleaned professionally after the job - or having a trailer with a porta-potty on it.
ren,
Yeah unfortunately construction will always be viewed as the bottom layer of things to pay for. Folks will pay to get their car fixed at a dealer as they think they are getting top of the line treatment but with their houses, most (not all) just want it cheap.
You usually don't see folks get three quotes to fix their blown head gasket and that could easily run over $1,000.!
I guess the one thing this thread makes me think about is the aspect of charging for estimates and not spending too much effort on small jobs.
The other is the ordinary person, who is (first) afraid, because this is the first time they've spent money without going to the Mall,
that there is just plain funny, dude!
and (second) has had their heads filled with all manner of nonsense and fear by various 'consumer' groups.
There's that. And don't forget, there are plenty of "contractor" terroristas filling the general public with fear and trembling in the aftermath of their uncraftsmanlike behavior and just plain wicked ways!
View Image my website
Mike,
I just wanted to say thanks for all the many good questions you bring forth to this part of the forum.
If you are learning from all these, you are going to be one heck of a great businessman when we pull out of this slump.
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where ...
Excellence is its own reward!
Thanks Piffin!
I definitely "take" more than I give sometimes. But after having been here for almost 10 years, I really enjoy tossing something out there and seeing what everyone has to say.
I don't have any "friends" in the business locally so you guys are my "colleagues".
Mike
I would bid 100% of the job specifications and would invariably get under bid by someone making a living off change orders.
That is the primary reason I am not in the business any longer!!
UPDATE:
So out of the blue these folks call me back and ask if I can come out and look at their project again to review the repair?
Its a $900. job. ($600 in materials, $300 in profit, one full days worth of work)
I know what I am going to do but just curious as to what you would do?
I am going to tell them the cost "is what it is". If you like we can get started next week. If I have to come back out and discuss it again before we get started, there is a fee.
This goes back to my other thread where everyone was talking about service trades that are "necessary". An AC guy or plumber wouldn't be stuck in this position....he would have already made "something" just to go out there.
It's up to you. You know the client, the job, how far and how much you bumped it.
600 material-300 profit?
did you mean the 300 for labor?
best of luck.
edit: What would I do? If the 600 inclueded labor and I bumped it 300 as profit and the job wasn't more than a half hour away and they were nice/she was good looking and there might be more work in the future or I had done work for them in the past.................shoot yeah, I'd go back.
If I thought it was a waste of time-I'd let them know that unless they changed the REPAIR, the repair would be the same as would the price. If they want to demo-NO, if they want to paint-Sure, might be less.
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Remodeling Contractor just outside the Glass City.
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Edited 11/28/2009 12:16 pm ET by calvin
One good thing is to get a fee out of them on the first visit, which kind of concentrates the client's mind when they want you to stop back for the fun of it. Of course upfront money might not be easy to come by in today's environment, but it doesn't need to be a lot - $50 or $100 would be workable for a small repair. Also of course, it's a good idea to avoid trying to read the client's mind so just go ahead and ask them over the phone what their concern is. Might be something you can deal with from your place, and if they would just like to reduce the price by 30% you might as well save the trip.
If you have to go back over there, the profit is no longer $300, it's down to maybe $200 because you (the employer) had to pay your project manager (the employee, also you) to go to another meeting with them, which will take a couple of hours, plus mileage expense, etc. I would tell them on the phone that you need a signed contract and a deposit check by mail or else you're out and they need to find someone else. I would deprive them of any other options, sort of like when a defensive lineman grabs the quarterback and sacks him 5 yards back.
It helps me to mentally wear both hats in situations like this--my employer hat and my employee hat.
The guy wearing the employee hat is going to write down hours on his timesheet if he has to get in the truck to go to a meeting. He's going to write down miles in his mileage log. It is NOT free to go to a meeting. When I am your employee you are taking me away from my family life and my kid when I go out to work for you. Not free.
The guy wearing the employer hat has to instantly compute the extra cost that it will take to comply with the prospect's work-generating request. Just doing it to be a nice guy is not a sustainable business model.
You need many many thousands of dollars of profit per year to operate. Getting it $300 at a time from people who want another meeting is questionable at best, unless you're set up to do water heater replacement or some other wham-bam specialty with several jobs per day and no talking!
Definitely don't move on the price; they would not have called back if they coulda found someone else to do it in the price-range/time-frame they require. And if they're gonna get it done before winter, they don't have any more time to screw around.
If the job were sold on T&M, you could try to get back the time they cost you making you say the same thing twice. Harder to do that when you gave 'em a fixed quote.
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
I think I would be inclined to tell them if I come out there again its only to bring my tools and do the job.
if they want to talk about it some more they can do it as you are getting started.
I dont mind having mutiple meetings on a 10K plus job. not for a couple of c-notes.
Thanks for the replies guys.
I agree as if I am building a whole house for someone, I will meet everyday for a year to assure they are happy but when its a less than $1k repair job with no real choices or decisions to be made, there just isn't enough money in it to cover alot of "discussion time".
So...what did you say to them? Heres what I would have said: I'd love to come out and DO THE JOB. Are you ready to go? If they say, "no, we want to talk some things over." I'd say: "okay, lets talk...I'm already familiar with the job and I don't have enough budgeted in it for another trip charge." "Can I answer the questions over the phone?"Put the ball in their hands and don't be afraid to say "NO". Act like you been there. Be a reluctant supplier. Do the takeaway!The takeaway is a powerful motivator. The fear of loss is quite a strong emotion. They obviously have found the money or decided that they don't want to open their house to the other guy and you are their choice. When you play the "takeaway" card, you gain a huge amount of control in the negotiations. http://thewoodshedtavern.com. = no peer mods!
If it's possible for the scope of the work to increase, then it would be an easy decision for me. The second trip is treated the same as the first trip.
If it's possible for the scope to be reduced, then I would want to know that before I re-visited because I would probably tell them I'm not interested.
If it's the same job and you already know how to handle it, then a second trip to "review" is not necessary and I would tell the client that.
The one thing I wouldn't do is tell them that I'm willing to review it again, but it's going to cost them for my additional time. I don't think anyone would go for that and it would probably just tick them off.
Mike,
I do a lot of work in the $1000 price range-so this type of call happens all the timealmost certainley-when they call back at this point and want you to come back out-what is REALLY happening is- that you HAVE the job-but they are nervous nellies that want to look at you again before signing or giving you any money-but you almost CERTAINLY have the Job several things come to mind
1)you are thinking it's only $300 -sure to YOU- but to THEM- it's $900-that's almost one THOUSAND bucks-which is a lot of money to some people-especially for a repair
2) I can't think of any situations where I am going to have $600 in materials-and only $300 in labor for a full days work-so the fault is yours- you priced things poorly
3) let's say your price had been $1200- you would be clearing $600 for the same project-$1200 is STILL in the realm of one THOUSAND-and if you had given them a price originally of $1200- there are really only 2 possibilities
a)- they would be calling you right now the same way-only you would be earning $600 instead of $300-OR- they would have found somebody else cheaperand they wouldn't be bothering you with this second callit's WIN/WIN for you,either way-but as the situation is now- you boned yourself with charging $300 for a full days work
4)- you have to remember the PITA factor on these smaller jobs- it's hard to find someone to do a smaller job-so if you are WILLING to do smaller jobs you can just about charge whatever YOU want5)- when you get some more experience with smaller jobs- you are going to learn how to do pretty much what blue suggested call them up-and over the phone ask them what they wanted to discuss. If they are looking to reduce the cost and reduce the scope of work- simply tell them that you have already designed/specified the project in a way you feel that you can stand behind your workmanship-and that you simply can't reduce it any further- but almost certainley what happened is- that they can't find anybody else to do the job---OR they did get other bids- that were much higher than yours-and now they are wondering why your price is suspiciously LOW ( because you boned yourself with the $300 for a full days labor)6) ultimately- things even out over time- i have sold $12,000 roofs over the phone having never laid eyes on the customer---and some times- like this past week i have a customer that requires excessive hand holding over a $260 vinyl siding repair-it all evens out in the end.stephen
Good posting Stephen. I'd like to see his numbers to figure out why he gave out a $900 price on $600 costs. I'd like to see the breakdown in his costs and see if he's missing something there. I like the idea of doing 1200 repairs and I think I might seek out a vendor for that idea.http://thewoodshedtavern.com. = no peer mods!
Guys,
My sub told me $600...I added my $300 to his number. So realistically I don't feel I underbid the job...just not interested in riding out there again to talk about it further unless I am given the job.
I guess I just figure either they want it done or they don't. After the first visit they thought my price was too high. Why they want me to come out again just feels like they want it cheaper and couldn't find anyone else they liked.
I'll call them Monday and see what they say.
Mike
Edited 11/29/2009 10:38 am ET by Oak River Mike
Blue,
you have been quiet about how you guys are marketing,since you went into the roofing business but- i bet whatever marketing you guys do- generates requests for repair work-which you currently find unprofitable to sub out to your crew of 8 mexicans
BUT- if you find the right "one man band" to sub to- you can effectively add a "Repair & Service" division to your company.
stephen
Haz...repairs is actually a thorn in my side. I finished a house for a guy and he was paying me and he wanted me to do a small repair on his personal residence. A couple shingles were sliding out from beneath his chimney apron flashing. I was stuck! I didn't want to do it and I don't want to send anyone from the crew to do it. Yet, this is a great customer. And his house is in the neighborhood we want to service. I'll find a one man band service guy that knows his stuff and is fully rigged. It shouldn't be hard as long as I'm willing to pay a decent wage. The hardest part will be to make sure his trucks aren't signed...but given the fact that many tradesmen feel like advertising is a sin, I have a good chance at finding someone.http://thewoodshedtavern.com. = no peer mods!
I have always had trouble talking money and saying "no" to clients so I fall back on the one thing I can do. And that is complete honesty. Your plan to hire a sub to do "your" repairs is OK as far as I'm concerned, and I think it would be OK for your client. What I would consul you to not do is hire someone with an unsigned truck to pose as your employee. There are too many opportunities for this subterfuge to be undone. Then you'll end up with egg on your face.
I wouldn't ask anyone to "pose as my employee". The thing I don't want is Joe's Roofing and his phone number in a yard competing with my name and sign. My sales presentation would not discuss the legal relationship that I have with my "Service and Repair Specialist". If they ask, I would have no problem explaining that I use this vendor, on a contract basis, for all my service and repairs.http://thewoodshedtavern.com. = no peer mods!
Saying no is probably a very good thing to learn. I had a very hard time saying no too until I was in my 30's. My life smoothed out after that.I learned to say no to booze, women, remodeling jobs, jerks, idiots...the list goes on. I'm still learning to say no to different things today. Learn it, it will pay dividends.http://thewoodshedtavern.com. = no peer mods!
And ????
Called, left a message...haven't heard back yet.