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Multiple quotes on each bid?

DanT | Posted in Business on March 9, 2004 12:57pm

Hardly a good title.  I remodel a lot of bathrooms.  Maybe 2 to 4 a month.  Not always a full gut remodel as many are what we refer to as face lifts.  New vanity, new floor covering, new surround, new paint, toilet etc. 

One problem I run into frequently is a client will call and want a quote.  I go over and meet with them.  They give me the list of thing they want done.  Kind of goes like this.

Ok, I would like a new tub, new faucet, tile surround, new vanity, ceramic floor tile, new lighting, paint the walls, new toilet and paint the ceiling.  I ask, do you have a budget in mind?  Bathrooms can be go from reasonable to wild you know.  The answer, no we think we will spend what we need to to get the job done. I go home an figure it out and lets say the price is $6800.

Do the quote thing, meet with them. Ask if there are any questions or concerns, no everything is just like we asked!  (Big Smile)  We would like to talk it over though.  We’ll call you in a few days.   No call.  I call.  We decided to get a few other prices. 

Now I have no problem if they think my price is to high.  But I find out later they bid the thing with no ceramic tile.  So the guy who gets it came in under 5k.  Turns out they tell him later that was their budget. 

Let me say they didn’t tell him the budget either up front.  And we both asked.  They just took out the ceramic. 

Ok, well here is my question.  Since I see this happening more than once I was talking it over with the manager of my local plumbing supply house.  I told him the worst part of it is I can often tell who it is because of the questions asked and the way they act but can’t for the life of me get them to talk money up front.  Like its pride thing or something. 

He suggested that I consider giving 3 prices with every quote.  Higher end than the asked for, what they asked for and a streamlined version of what they asked for.  He claims that he knows another contractor that does this and they guy claims 50% go for what they asked for, and 25% on either end.  What do you think?  DanT

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  1. WayneL5 | Mar 09, 2004 01:31am | #1

    How about quoting what they ask for, then also proposing alternates, like "vinyl instead of tile, deduct $xxx", and make sure they really understand that prices can vary a lot with material selection.

    Also, somehow you have to get them to understand your quality service, that it's worth paying for.  So, return phone calls ASAP, maybe have a portfolio of past jobs, have references handy for when asked, look professional, etc.  People don't trust contractors, so if you can present yourself as more professional than average (which shouldn't be too hard to do) you'll have an edge.

    1. DanT | Mar 09, 2004 02:19am | #3

      Waynel5,

      I do the proffesional look deal, shower before I go, portfolio, and references.  Keep in mind this is not the majority of my sales calls, just the ones that really bug me.  So I am just fishing for a creative solution for a frustrating situation. 

      I suppose I should say also that we are busy, and with business that is profitable.  We also have numerous repeat customers and are complimented frequently on the way we work and our level of professionalism. 

      So what I am saying is I want it all!!!!  Really I just find this situation frustrating and think if I could find a solution I could get more business.  Simple as that. 

      I think the alternates is similar to what I am proposing,  and maybe a good idea.  I give alternates when asked or when I have a budget to work with so the customer can spend their money wisely.  DanT

      1. BobKovacs | Mar 09, 2004 03:50am | #6

        Dan-

        If you're turning a lot of bath projects, I'd assume you've got some pretty good cost data from past projects.  If so, I'd prepare some project data sheets for your presentation book.  On each shet, show before and after pictures, give the details of the project in a standard format, and show the price for that job.  The clients can then look at past projects, understand what went into each one, and see what various different project scopes cost.

        You can then look at the sheets once the clients have expressed their desires, and find some that are similar in scope.  The conversation would be something like:

        You- "Here's a project with new fixtures, a new tile floor and new tile tub surround and wainscot.  It was $8700.  Does that fit within your budget?"

        Client- "Well, that's a bit more that we were looking to spend"

        You- "OK- here's another project with the tiled tub surround, no tile wainscot, and vinyl flooring- it was $6400. Are we getting closer to your budget?"

        Client- "That's more in line with what we're looking to spend.  But we'd like to get a few other quotes as well."

        You- "That's fine.  When you get your other quotes, please call me so we can make sure you're getting apples to apples bids.  If you decide you'd like me to do the work, we can get together again and finalize all of the details- tile selections, fixtures, etc., and firm up a price for exactly what you want."

        At least now you haven't spent a few hours pricing up "their" job until they're ready to commit to you.  They've also seen that you can put a project together for them at a variety of price points- one of which should meet their budget.  And, what other contractor is going to have that great presentation book to show them, right?

        I've got a column coming out in the April issue of JLC (I think) that uses the same approach for ballpark SF estimating.  The example in the article is a comparison of kitchen projects, but the concept is the same.

        Bob

        1. DanT | Mar 09, 2004 05:19am | #7

          Bob,

          Great approach.  Think I'll give it a shot.  I don't have that many pictures as the bathrooms are difficult to shoot but my past customers would give me the oppurtunity to photo the work so I can work it out.  Thanks so much for the input.

          Mike,

          I understand where you are coming from.  Most of the folks I am talking about in this situation are middle class income folks at best.  I am sure I could get a fee out of a few but my percentage of that would be about the same as my closing rate now.  Most of the people I am talking about don't have to worry about having 2 baths remodeled as they only have one.  I am lucky if they have a half bath somewhere. 

           I am not so distressed as to the time working up the quote as to not being given the shot at refiguring my price due to changes.  Most of these bathrooms can be figured in 30 minutes or less as they are off the rack material and the labor is pretty standard.  Thanks for the input. 

          Jeff,

          Again as I said to Mike, these are not my upper income folks.  One problem you have living in a small area is there are not enough upper income folks to go around so if I weeded out all the lower income people I would be broke soon. 

          I am not talking tire kickers here, these people have the work done.  They just modify the "specs" to get to their price and I am not included in the lowering process. 

          You are correct on one point they are from advertisements not referalls.  Everyone I have had do this is from my TV ad.    But I get a lot of business from that add and it only costs me $35 a week for 260 30 second commercials so I don't think I will give it up.  Thanks again.  DanT

          1. xMikeSmith | Mar 09, 2004 05:31am | #8

            well, dan... then i would work on closing the sale before you leave the job.. since you already know the price... have the Proposal form there .. go thru it with them .. filling it out ...put in your prices and have them give you a deposit  before you leave...

            what do you want to bet, the guys who are eating your lunch are doing just that ?

            if i knew my prices as well as you.. that is what i'd do..

             me ... i gotta ruminate on it.. and bring my plumber in..... make it complicated....

            you've got to develop a "close"Mike Smith   Rhode Island : Design / Build / Repair / Restore

          2. davidmeiland | Mar 09, 2004 06:41pm | #13

            "I don't have that many pictures as the bathrooms are difficult to shoot but my past customers would give me the oppurtunity to photo the work so I can work it out."

            When I started doing cabinets on my own I ran into a pro photographer who needed his kitchen done. He had put up a card at the lumber yard looking for a trade. We struck a deal and he shot several jobs for me using a 4x5 camera and a wide angle lens that was able to get those bathrooms in the frame (although it does stretch them). Bottom line is I have quite a few good shots from the era that are still very helpful today--and he has custom cabinets in his kitchen. Do whatever it takes to get photos... whether that means shooting yourself or getting a pro.

  2. maverick | Mar 09, 2004 01:45am | #2

    When ajourning that first meeting say to your client "If I am within a couple of dollars of another quote let me know. Nothing is written in stone."

    Lets them think you are flexable enough to meet their budget demands. You may get a few more calls.

  3. xMikeSmith | Mar 09, 2004 02:42am | #4

    had two calls today.. one for two baths remodeled... went to the job... listened and discussed..

     told them i would be glad to draw up what we talked about for a fee.. they said ok.. i took some pictures and some measurements...

    2d call.. old customer called.... finally had his prints ready from the architect.. for a 2d floor remodel and two baths... wanted a quote...

    told him i only give quotes for a fee.... named the fee... then i backtracked... look , i've done work for you before.. i'll reduce my fee....

     "fine.. see you Saturday"

    .... in both cases.. i will receive a $500 fee for figuring each job.. and i have a better than even chance of getting the jobs...

    what you offer the customer is a valuable service.. if they don't want to pay for your expertise...or if you value your expertise at  zero.... then it's harder to differentiate yourself from the competition...

    better you find out up front wether they want you or they just want a price...

    Mike Smith   Rhode Island : Design / Build / Repair / Restore

  4. User avater
    JeffBuck | Mar 09, 2004 02:56am | #5

    Do you find that "after the fact" ... you had a feeling they were tire kickers?

    Sounds like you need to do a better job of prequalifing them.

    I've been pretty lucky with tire kickers ... and almost each time I've known that weren't gonna call as I was driving away.

    I've told people that I need to know the working budget before I spend any time working up numbers. Basic Bath remodel ... oh ... we're talking 8 to 15K ... depending on the level of finish.

    One big thing to get in your head .... you really don't want those people for customers anyway. Even if thry do shout out ... OK....OK... we have 11K to spend!

    Why ... they're holding back from the get go. No trust is a bad thing.

    They forget .... we gotta trust them to actually have the $11K!

    How are they getting your name and number?

    If it's more from advertisting and less from direct customer referal ...

    I'd be real tempted to give Mike's idea a try ....

    I'm even tempted to do it anyways ...

    as it makes perfect sense.

    Why not close them right then and there ... and work out the details later.

    Someone hands ya a check for a coupla hundred bucks .. they're committed.

    I'd say even $100 would seperate the men from the boys and the tire kickers from the committed.

    Jeff

    Buck Construction   Pittsburgh,PA

         Artistry in Carpentry                

  5. MarkMc | Mar 09, 2004 07:10am | #9

    Great advice from all............esp. Bob, Jeff, and bite-me-mikey. (how ya doing pal? Still chasing Helen?)

    Bottom line.......get to the bottom line. Like Mike said, figure out a way to close it on that first meeting. If your doing 2-4 baths a month, I figure you don't have time to work up a quote later. Bob's "illistrated ladder of costs" is a great closer. Also, ask what it's gonna take to have them choose you over the other guys. Just coming out and telling folks that you intend to leave with a signed contract AND a deposit will cut through the dance.........

    Jeff's right about prequalifing folks...........over the phone, sitting in your office, relaxed and losing only a bit a of time. There is a wealth of info for doing the "interveiw" over the phone.  With your experience, you'll refine a method.

    Also, that thing about "bids". The only way to eliminate bids is to stop giving them. For a small job, a firm price, on the spot and walk to the next job.

    BTW, some of the most successful Contractors are the ones who's market is the middle-class and the average job is less than $10k. 

    1. xMikeSmith | Mar 09, 2004 07:20am | #10

      mark... good to see your smiling face... right on about the small jobs and working class customers..

       the biggest contractor in Rhode Island is StormTite... $15    -- $20 million a  year  replacement windows , storm doors...

       guess who they're selling to  ?..... and you bet they close on the first visit..Mike Smith   Rhode Island : Design / Build / Repair / Restore

  6. Frankie | Mar 09, 2004 08:57am | #11

    Doing the high, middle and low design budget offerings at the first meeting is a great idea - especialy if this is done with photos. Prospective Clients will have an easier time visualizing their own baths this way and therefore have greater confidence in you. If they can visualize their finished product from your photos, they will also be visualizing your doing the work.

    However, I beleive your stumbling block is that they need to kick some tires to feel as though they are making an educated/ informed decision. They need to "research." They beleive that if they don't pay the least or lowest rate, they are over-paying or worse - being taken advantage of.

    One way to get around this might be to offer a few referances - Clients they can call to coroborate your sales pitch. I have never done this on $10K - $15K because I feel it is an imposition on my previous clients and the reciprocation favors become too costly. On $100K jobs and up, it's a different story.

    As an alternative, think about earning their trust and proving interest in giving them value for their dollar. Get them to understand that the best price (it's the only element in the process they can understand) is only the first factor in the decision process. The relationship and mutual respect they will have for and receive from the Contractor needs to be concidered also as a close second. You don't state this. You demonstrate it.

    If they are only tire kickers, it means they have already determined who they want and are just confirming their decision. Leave your card and after a strong handshake (with all parties involved) walk away and don't give it another thought.

    If your closing percentage is 50%, in the competitive bidding, you're doing better than most and your prices may be a bit low. Nothing wrong with low if: a) your customers get what they pay for AND b) you are able to do volume.

    One final point. In your meetings, how are you with eye contact? Most contractors who are good but don't get the closing ratio their work merits, fail to make strong eye contact during the "go-see."

    F.

    1. DanT | Mar 09, 2004 02:33pm | #12

      A year ago or so I started to put together a package of info allowing my to do just what Mike suggests.  Guess I need to look at that again.  Mike, you are right for most of these types of jobs I ought to be to price it on the spot and close then.  I will start working on that tommorow. 

      I also need time to mull it over if it is an unusual job or  a large job.  But these style of bathrooms have become somewhat of my bread and butter and something we are doing 40-50% of the time so being more successful with them is important.

      Also, as with all of us, my sales time is limited by the fact I work daily too so I need to be as efficient with my time and my approach.  And these suggestions will be a great help. Thanks to all for the direction and up front answers.  I really love this forum for just this reason.  DanT

  7. bobharte | Mar 10, 2004 05:37am | #14

    Dan,

    Could it be that part of the challenge that you face is that some people just want to get bids from 2-4 contractors before making a decision?  (i.e. It doesn't matter how good or cheap the 1st contractor is, they're just going to get 2-4 bids no matter what.)  If you're the first person to bid for them, your chances of winning the bid go way down.  You're educating them so that they know what questions to ask contractors #2 and #3, one of whom  then gets the job.

    Could you find out how many quotes they plan on getting and then tactifully tell them that you won't meet them until they've met with one or two other contractors?  Then try to close them on the spot.  (This might not be necessary on strong referrals.)

    It's been awhile since I read his book, but I think Michael Stone recommends and spells out this technique in his book "Markup and Profit".  I know I read about this somewhere, and I'm pretty sure it was his book.

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