I currently am bidding on a few projects, and losing a few too. A couple are to “shell” only and a few are full turn-key. Average dostance from home is about 6-7hours one way..(though that is the norm for me). LOVE the final product.
What I have been running into these last few months is ‘price shopping’ from the customer. I don’t have any problems with that, as I can see it from their shoes as well. BUT, I know the quality of work that we do and the ‘extras’ that are built into the home without thinking twice. Little things that I know the other guys aren’t using/doing. (HD galv. and S.S nails and fasteners; free powdercoating of exposed hangers; cabinet, handrail, and towel bar blocking, etc. etc. THe differences in price is about 10-15% higher that the other guys.
WHat I was thinking..since I know that the customer is sitting in front of the kitchen table with three estimates/costbreakdowns….all look the same, and I know they just flip to the last page and look at price……Is to create a proposal ‘Package”..Like a report. Maybe a picture of their site and cover letter explaining the company, then the crews, (like a bio), then a few reference letters, what we include in our price, then a detailed cost breakdown and available options step-by-step though the construction process, presented in a report style document folder. Even for just a frame job to shell. (Exc., mud. frame. windows, side, roof.) Maybe I am just worrying about it too much, but thought I’d ask if that is too involved. I even send a thank you card and picture of their site review to them even if we didn’t get the contract thanking them for the opportunity to bid and evaluate the site.
What do you think or do????
THanks!!!!
Replies
Well, being on the buy side of such a transaction as I am, it would certainly help sell me on the proposal and put you in a favorable light. If you are really only about 10-15% above the other guys, and they just dashed something together I would probably tend go for your proposal if you had the reference work to back it up.
I think folks are willing to pay extra for quality, but they need more than a simple "trust me" from the contractor. I would think it would pay to do a bit of a sell job on this. Reduction of cognitive dissonance, as it were.
Certainly in my field, consulting proposals are backed up with such material.
DonH
Don, that's not a bad idea. Put in a few letters of Ref./testamonials from past customers. I know this all sounds like "duh", but after putting in time and effort in bidding the 'house' and not a sq. ft. price (like everyone says to do), it just seems like all the customer is concerned with is the bottom line $$$$. And justifiably so. I don't worry too much about this, but since almost all of these homes are either their "dream" home or vacation home, I feel as though they would want the best possible quality job for a competitive price. I know we can deliver a #1 job, but it does come a price tag.
There is a quote out there..."It is unwise to pay too much, but worse to pay too little. When you pay too much, you lose a little money. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot. It cannot be done. There is hardly anything in the world that someone can't make a little worse and sell a little cheaper....And those that consider price alone are This Man's Lawful Prey." J Ruskin 1819-1900.
I just got back from Office Dpot/Max/whatever. Think I'll try to put together a proposal 'package' with photos, letters, copys, etc. and see what it will do.
I guess I was just wondering if some other guys do or have tried this before and what were the results? I can see this will take alot more time than just faxing off a bid, (wife's gonna love this ;) ) Thanks for the insight Don from your side of the fence.
My jobs are much, much smaller but what I have finally learned is to sell value not price. Try telling the potential customers that you will not, under any circumstances, be the cheapest, but that you will deliver a far better quality product for a fair price and at a great value. The building will almost always outlast the payments, and you will only be happy if you know that they will love the new home. The danger is you must then back it up and exceed some pretty high expectations. Also you had better be carefull about shell projects, if the customer does a lousy finish job, or doesn't finish at all, you don't want your reputation dragged down. Just a thought.
Dan
Yes sir...I've watched a few of my friends get a bad 'rap' for a job they didn't do. If someone walked into the house during shell, They go da#m nice job. But come back 6 months later, and whoa! There is a reason there are people that specialize in the fields that they do. But nothing out there can cover up the terrible finish job, and the shell contr. kind of gets the rap. (easyto shift the responsibility if your not there to defend yerself.)
I do agree with quality. I think we ALL that post here do a job that goes beyond assuring fire, life safety, and structural integrity are met. I was relating to a couple last night that a ferrari is a hand built piece of work, with the attention to detail AND overall performance. The Yugo/Hyundai/whatever is also a piece of machinery that get to point A to point B, but is massed produced., and will definitely not be the same. You would have no problem with the Ferrarri builder to make you a Hyundai, but would you have the Hyundai guy build you a Ferrarri?!?! They understood and are going to go with us, but like you said, I know that we need to deliver. That's the fun part, since we love these things and will build them like our own! I think the hardest part is geting the customer over that "contractor " image. A few (or more)bad apples seem to have really hurt the industry, and we are out to run cover for those folks just to put food on our table. But thats a thread that has been going on for a long time.
As a customer, I can only tell you what I look for in an estimate. The reasons that I have rejected contractors or subcontractors in the past, in order of importance:
1) No local references - I want to see your work and know that you won't screw up my house.
2) Estimate too low - I want you to make money so you don't screw up my house.
3) Late, doesn't return a call to answer a question or otherwise non-responsive.
4) Lack of detail in the estimate. I need to know what I am paying for, and possibly make alterations to the job to accomodate my budget. I'd rather eliminate something from the project and get high quality than to hire somebody else in the budget that screws up my house.
5) Estimate way too high. This is a reason to reject, mainly if number 4 accompanies it.
6) You just rub me the wrong way when we meet or otherwise give me a bad feeling.
Are you sure that customers are just 'price shopping'? The estimate process is a way to interact with contractors and help determine whether you are a good 'fit'. Just because you look good on paper, and even if you worked really well with my neighbors, doesn't mean that you will work well with ME. So, I get multiple bids. I look at the bottom line. I also look at the rest of it and see if I can see why a bid falls where it does. I think back to our meeting and see if the estimate is where I thought it would be based on what was said. This is important - do I understand what you are saying when you are saying it? The estimate is a way to guage that. This is our first time to work together on something and if it doesn't go well then there's no point going forward.
So, long note longer, I think ANY detail you can provide up front, cover letter, references, etc. will help when I am trying to hire for my project.
Thanks for the insight and prioritizing your expectations. It is advice well taken.
The short answer to your question, and I think frenchy and sonny would both back me up on this, is SELL, SELL, SELL!
You may be able to get thirty percent more than your competition if you develope the right arua and are able to sell confidently. I sued to get ten or fifteen percent less than my competition. Now I get twenty to thirty percent more.
Your handicap is that you are trying to do that selling from a distance via mailed presentation literature. That stuff will get your foot in the door but will it SELL? Oreck vacumns, Vita mix blenders, little garden tillers, etc all do it that way in volumn - selling a product for a higher price by creating an aura of high quality. I don't know if it will work for high dollar items and services like we sell. They do a lot of follow up mailings too. Do you give it a one shot proposal or follow up the mailing with a phone call? I do a lot of distance managing customers but the sales part is always face to face. e-mail works great for progress reports and sending photos with invoices.
I like to get the face to face selling because I want to know my customers. I can't satisfy them if I can't anticipate what they need and want from me. I am interviewing them for a position as a customer as much as they interviewing me for a position as their remodeler. Sometimes, I can see that these are not customers that I want to deal with. Some one above mentioned that 'rub me the wrong way' effect.
So maybe you need to be making an appointment to make a presentation when you have finished investing time in preparing the estimate. You can drive home with a deposite check in your pockeet instead of waiting and wondering...Excellence is its own reward!
SOUNDS GOOD, BUT KEEP IT SIMPLE. WHILE YOU WANT TO SELL YOUR JOB AND THE QUALITY THAT YOU OFFER, YOU DONT WANT TO MAKE IT TOO MUCH, IT WILL JUST COME OFF AS JUST ANOTHER SALES PITCH THAT THE CUSTOMER HAS JUST ENCOUNTERED ALOT DUE THE AMOUNT OF MONEY THEY ARE ABOUT TO SPEND.