Hi Everyone, I met with a client 2 nights ago to go over a finished basement (2500 sq ft) its big and I dont want to lose it. I am a caninet shop but have done basements for years and the shop supports all the millwork in the field. (kind of a one stop shop deal). This a very good customer, We built a house for them T&M 4 years ago down in Longport NJ and everything went very well. We sat down to go over ballparks with the time and labor. They were a little suprised at the possible cost. They thought it was about 30% percent higher then they thought. I went high on the ballparks so there were no suprises later. I was honest. They said there 90% sure just have to move monies around. I met with them on a tuesday night. I like to close a deal before the weekend.Over the 20 plus years in the business I have learned that people overthink things if they have the weekend to ponder(ie talk to friends who dont have a clue who could have a opinion) Then the deals off. They said they would let me know early in the week. Its like waiting for an old girlfriend to call you back. Any advice on keeping this job on the playing field. My cabinet work pays the bills but these basements are the gravey. I hate to lose it esspecially in a slowing economy.
Any advice would be great,
LOU C
I’m thinking I should not have gone higher on the ballparks. They are the type that likes to feel there way thru a job, so its tough to nail a final number
Replies
loucarabasi
30% over their mental budget puts you in a tough spot.. Chances are they aren't going to go and simply mull over the question. Instead they will go active seeking out prices closer to their budget.. If they find someone chances are you've lost a customer. Loyalty and money never were very good bedfellows.. <grin>
This is sales technique and needs to be practiced before you can do this well so try it in the shower and on the wall before you practice on your wife..
The phrase is,,
If I can will you? If I can meet your budget numbers will you accept a less expensive material, Pay for the materials in advance, or a less expensive finish etc
.. Something to justify your lowering your prices. Because if you lower your prices without justification they will feel that you didn't give them your best price up front.. That's a bad place to be in!
Second.. always be closing.. You can do this in a gentle way without being pushy.
One technique that works well is Should I pencil you in for that job on your time schedule? I can see I have an opening then right now and if I pencil you in I won't give that time slot away without talking to you first..
The wonderful thing about that closing technique is you are doing them a favor without a full comittment from them. Pencil in doesn't sound commited but you'll be surprised how few will shop after that point.
It gives them a sense that you are being reasonable and not pressuring them unduely but you are trying to be businesslike which they can apprciate especially since you are only "penciling them in"
The wonderful thing is when you said, Without talking to you first, they gave you permission to call them at some future time to get the deal finalized.. You even have your opening conversation. Hi this is so&so I've got you pencilledin for a project and was trying to firm up my schedule. That job we spoke about, can you tell me what the status is on it?
If I can will you? .. Something to justify your lowering your prices.
Should I pencil you in for that Those are great things to say I always have a hard time negotiating with customers, mostly 'cause I'm not good at it.
Thank you for that!Brad.The most beautiful thing about a tree is what you do with it after you cut it down. -Rush L.-
onemore,
Brad I'm glad to in some way repay all those who have helped me here.. I've been a professional salesman all of my life (near 60 years) and I simply love doing the deal. Please ask and I'll walk you though more than enough to help you close more deals at a fair profit..
Thanks! I'll be the first to admit I'm no salesman, I'd rather just do the work I love what I do (remodeling mostly). I'm also a one man show but grab my son to give me a hand when need be. It's getting to the point of rather just work for someone and take the cut in pay. Around here(upstate NY) it's just no one pays enough to even consider it. Maybe someday I'll come across one that will, til then I just keep plugging alongThe most beautiful thing about a tree is what you do with it after you cut it down. -Rush L.-
Onemore
Be glad you aren't a saleman.. It's a really tough career. Less than 1 in a thousand remains in the field 5 years later. You have to learn how to deal with constant rejection without getting bitter.. Surprisingly high rates of divorce and addictions. In 40 years in sales I've seen exactly one person retire as a salesman.
I work on my home as a pleasant diverson from the stress and rejection of selling..
Just learn enough to not be taken advantage of by those better able to negoiate than you are.. and enough so that when the customers are giving you buy signals you can read them and let them buy from you.
There's a great book out there called Shut Up and Sell.. It destroys the myth that you have to be a fast talker to sell things.. and teaches you to get out of the way of the deal. Short little book that's an easy read but very effective. Probably find it at better office supply stores or maybe a local book store will order it for you..
frenchy
I loked up Shut up and Sell on amazon. Skimpy info there and no reviews. Can you do a summary? Why do you like it? What did it help you with?
Strange that a book from 2003 has no reviews. Maybe it just got on Amazon?
Thanks
Scrapr
I'm not sure it's the same book.. I read my copy back in the 80's . small little book not a lot of pages?
In summary the book tells you to look for buying clues and how to position yourself to be ready to say yes when they are ready to buy..
Warns of the tendancy of salesmen to talk their way out of deals they could have had.
Edited 2/24/2008 12:25 pm ET by frenchy
Frenchy, Your advice is appreciated and good. They called today and said they want to move forward with the job and that they want to add a Bar with all the bells and whistles (glycol beer taps and all) Yum Yum. 4 months worth of work. I'm so happy today. I thought for sure this one was going south. I think I'll do a thread on this one.
Thanks again its good to know your out there watching are backs. God bless pal, Lou Carabasi
loucarabasi
Congradulations! Well done and good luck.
Frenchy, The jobs on the fence now. I got the ok sunday (happy). She called monday with a problem. (not happy)The township is doing this reasessment tax thing. They have been talking this for years. Ive lived in the town 40 years. (all my life). They have postponed till aug 2009 Due to market value dropping or what they say" they are waiting for the market to stabilize" There taxes are 35K and he's affaid of them going up anymore. I called my contacts to see how much there taxes would go up after the basement finish. They told me about 1000 bucks.( not bad). He was like lets just not get permits. I kinda blew the comment off and did not answer in any way. The market is slowing down and its like we have to fight now for all these jobs. I should have prepaired the deposit contract sunday and picked up the check in the morning. I'm so stupid, you think after 20 years I would learn by now. Dumb, dumb, dumb!!! Now how do I pull this back together? I have no idead where we are at right now. On top of this- I postponed another job to make room for this one. I am a cabinet maker and these finished basement jobs are the gravy. I can work in the shop in the evening whens kids are in bed and still work next day on site. plus it keeps my guys busy too.. Help frenchy Help!!!!!!!
LMC
loucarabasi,
You need a semi legitimate reason to call them. I think you have it.. You asked around and others informed you that taxes might go up $1000 for a finished basement.
You should share that with the home owners, (but give them a few days to calm back down).. Timing is important.. have you noted when they call you? I mean what time of day it is? and what day of the week? If so, that is when you should make your call.
How you present this is critical. In sales you never present anything which can result in a No!
For example would you like.... (the answer could be yes or it could be no.. if the answer is no you've got nothing further to discuss..) any attempt from that point on smacks of despiration and is not likely to result in a favorable outcome..
Something along the lines of hello Mr. (or Mrs.) XXXXX it's important to speak to the person who is the decision maker. First names are important to use but do not use them unless that is the way you normally address them. Wait untill they give you permission. A technique to force the use of first names which implies a friendship and a connection is to use the tittle Mr (or Mrs XXXX) every place a pronoun is normally used and to interject the tittle at every possible oppertunity. If more than 5 minutes go buy without them granting you permission to use their first name resume normal speech using pronouns etc. {you're in trouble} I digress
Every family has a decison maker and your previous contact should tell you who that would be. While families discuss things the decison maker is the one you need to convince and the one you need to be speaking to..
Anyway, Hello Mr. XXXX I've been asking around with my connections and While I was careful not to mention you, it seems that the typical tax increase is around $1000 a year for a finished basement your size..
Now stop talking..wait for their reaction to your news. If it's negative your response could be something along the lines of,... however that usually isn't impossed untill the job is completed. IF that's too high we could do a portion of the job and leave the remaining unfinished. OR we could build the time consuming cabinets etc. and have those in place ready to finish when this whole tax issue gets resolved..
See you are meeting their needs and their concerns while generating income for yourself.. They cannot be offended and will be greatfull you've taken those steps on their behalf.
Their answer might also be oh that's not so bad! we can afford that! I thought it would be worse.. This time do head over there right away to collect the deposit! <grin>
You aren't a professional so if you try this and stumble you'll feel awkward and that's not what you want to convey. Practice this on your mirror untill you feel smooth then on your wife.. Then role play with your wife having her throw up objections.. Anything she can think of.. just so you don't get flustered trying to think on your feet doing something you have little or no training for..
wishing you all the luck & starting out saying something is quite a bit more than they thought then adding expensive appointments then retrenching considering tax implications
I'm betting on you - if they do it ( they will ) you are the manBUT do they pay $35 grand / year property taxes???they do not have financial worries / just small concerns
Yes there taxes are 35 grand. Whats another grand!!!! They said with are luck It'll be more. How do you convince that type of personality?
-Lou
Hey Frenchy? Why is it soo much easier to sell a job when you have a ton of work. I allways feel like I am lucky. Yesturday I went and looked at a job for Okidata (huge office complex). Its like 2 years worth of Laminate work (which I hate) But the moneys good. I have a good repore with one of the head honchos. He had a flat on the road 8 years ago, Long story short: I helped him, he asked me what I did, I did work for him, He like it and we lived happily ever after!!!
I have meet with some big wig budget guys, little nervous. (any advice on meeting with the big guys?)
-Lou
Lou,
i think it's always easier to sell work when you don't need it---exactly BECAUSE you don't need it.-- you have a different attitude then-----you project more confidence, you feel free to suggest options to the customer regaurdless of the impact on your bottom line and generally you are just a more desireable commodity. I read once a sales book that mentioned "riding your winning streaks"-- essentially-- if you close one sale---immediately try to go on another sales call---even if it means re-scheduling an appointment.
I don't know about that--- but I do know--my sales seem to come in batches--------I hit a period where EVERYTHING sells- and it seems i can sell anybody anything---then ya hit a dry spell and nothing sells
the closest I think i have come to figuring it out----is to make a real effort to go on sales calls when I am rested enough to concentrate--rested enough to be happy to be there. I notice if I am exhausted and cranky and irritable and production work didn't go well that day---my sales efforts are wasted.Best wishes to you,
stephen
loucarabasi
That sounds like a life preserver.. Grab it!
If the economy comes back sooner you can still expand into it and if not at least the wolves won't get in the door..
Frenchy, I pulled the job off. I used my contacts to answer all there doubts honestly. Contracts were signed and I was issued a check today!!! (Nice!!!!!!!!). I really thought this one was gonna fall through the cracks. Now were getting hit with a bunch of work. Not complaining but go figure.
Thanks again for the great advice.
-Lou C
Well done!
Everything will be okay in the end. If it's not okay, it's not the end.
"(any advice on meeting with the big guys?)"Act like you don't need them. Bob's next test date: 12/10/07
"I postponed another job to make room for this one."Never postpone without the check and signed contract. Thats your only leverage. Bob's next test date: 12/10/07
Frenchy, We been on our way with the basement job!!! This is a big sucker!! We'll be 3 weeks framin, tons of soffit/tray ceiling elevations. The firestopping is killing us. They are real strict around here with that. Thanks for the sales help, O- great one!!!!
-Lou C
Well, now. How about you start a sales training course. Could be your new dream job. Worked for Lou.
Firestopping a basement can be 1/3 to 1/2 the framing sometimes! I learned to re-think the way I framed and concentrate on making the firestopping as easy as possible first, rather than framing it first, then adding the firestopping. After I revamped my thinking it got much easier. Bob's next test date: 12/10/07
Jim, I go with the 2x4 first on the ceiling joist then rock on top right back to the block wall. The 2x4 brings it down past the mudsill and wires. Works well but takes some time. My helper stays just ahead of me.
-Lou
Yes, that's the order of installation that I look to do too. As you know, every situation is different and the best policy is to analyze every wall and ceiling intersection carefully, then design a process to make life as easy as possible.It's the old story of "The Tortoise and The Hare" Bob's next test date: 12/10/07
Edited 3/11/2008 11:31 am by Jim_Allen
Re Shut Up and Sell; there's 30 available used on http://www.abebooks.com
Thanks
Price was right. With shippimg $5.00
great advice
I think you did the right thing. If you come in under the estimate, that would be a good thing, go over, not so good.
MarkH
We'd all like to be hero's and come in under estimate but that's not so good if you don't get the job..
Lou has a figure that he needs to get, he told the home owners what he thought it was. He did the right thing. Maybe he could have sold them somethng else that would be closer to their price point, but maybe there weren't many places to cut the price. The problem is the customer has no real idea how much stuff costs and how many hours are involved to do the job.
MarkH
Oh I understand his position completely.. I deal with that sort of thing all of the time..
The trouble is he needs to educate them in a way they can accept.. just telling them that things cost more than they figured won't do.. They will go looking for a cheaper source and trust me they are out there..
While they may not get exactly what they want (and maybe or maybe not know it) they will get a lower figure.. If price is your only criteria then anybody can meet that price if they want to..
You need to let the people decide what is more important to them.. the number they have in mind or the quality/service/reliability theythey recieved in the past.. .
For example can he cut costs by using cheaper materials? or get the money up front etc.. If he presents those options it's a win-win they get the person they trusted before and he can make the profit he needs..
If they go elsewhere looking for a price they will find that price but maybe not the quality or whatever..
The easiest way to present that is the old, IF I can, will you? Just leaving it to .....Luck? time? the hands of GOD? and with todays competition you will lose..
Yes , you definitely do have to sell the job.
I use ballpark pricing to qualify customers before wasting alot of time quoting the job. If I walk into a basement and tell them my ballpark is 60 grand and their ballpark was 40 grand (30% off)...not only are we playing in different ballparks we are playing in different cities and wasting everyones time.
If they are serious, now they know the ballpark, ask them for a design and estimate fee, if they sign, the fee comes off the contract price. Give them an exact price, very few people are comfortable with ballpark numbers.
Agree with Frenchy. If I could, would you?
Just read an article in JLC that reminded me of another option for closing....financing.
Small fry like me could take credit card via Paypal and customer could get whatever spiff the card offers. Sometimes it's just a little creative incentive to move client off center.
Easy enough to call them Monday and say, "I've been thinking about your situation, and thought of a way that you will benefit."
PJ
Everything will be okay in the end. If it's not okay, it's not the end.
PeterJ
That's an excellant idea, I hadn't given it any real thought since normally such things are done with home equity loans and such. But with banks in the trouble they are in it's about time to figure out some creative financing arrangements.. even if they don't take it,, it seperates you from others..
We've been offering that paypal option PeterJ. It's an elegant, simple, inexpensive solution. Bob's next test date: 12/10/07
We've been offering that paypal option PeterJ. It's an elegant, simple, inexpensive solution
Do you get many takers? How do you propose it? I've never offered it, most work I do is as a sub, but nice to have the option.
Everything will be okay in the end. If it's not okay, it's not the end.
I dont' think we've had one taker yet. It's new to us and we've got a new salesperson, err, design consultant and I'm sure she'll need it at some point in time. She'll also be offering full service mortgage options too. Bob's next test date: 12/10/07
Jim, do they nick you for 3% on everything?
Joe H
I don't know. I'll check. Bob's next test date: 12/10/07
You are in the same boat as an architect friend of mine. He is conservative and gives out up front guestimates that are quite high, knowing he will come in under that price once everything is added up, but clients have been going with another guy who breaks down his fees so the up front costs are lower, but actually charges more in the end.
I'd call them up and ask to go over and talk about an idea you have to save them money over your original costs. Instead of pricing out a guestimate of the whole works such as you've done break it down into more manageable sections with an immediate start date.
I'd break down the later stages into manageable options based on how much money is left in the pot after the necessary rough construction is finished. That way they know the project will be finished within their budget, it just depends on how many details and options are involved. As you get closer to the end both sides will know exactly how much money is left and how far to take it.
Otherwise you are in a budget battle with other contractors and knowing the clients are shopping, if asked, I'd not compete directly with you but break it down as stated and have a low number much lower than yours, and a high number that's pretty modest with modest finish materials to sound more competitive even if it goes up later with additions. Heck, my costs may be higher than yours, but it won't matter if I can just get them hooked and get started quickly.
Knowing that chances are our costs can't compete with someone else I have also been known to suggest that instead of estimating the who job, that we quickly demo and frame the space to eliminate the most uncertain stage, since that has to be done regardless of other options, then the client can get competitive estimates for the finish stage. It eliminates some of the unknowns for others to bid and will probably save the client money if they farm out the finish work. However, we've just got them to use us for part of the job and chances are they will keep us for the rest of it.
Along the same lines if they don't want to start construction I'll push for letting us demo the space to see what's really behind the existing construction. Once a client likes you they will keep you.
If they don't want us to demo the space I'd suggest they hire me to review other contractors proposals and evaluate their past work before the clients hire them (if another contractor is chosen over me). There are a number of ways my experience and good judgement can be helpful to the client and save them money or headaches down the road. Of course if they trust your judgment they will hire you to build it as well, but any of these sets the stage for separating your service from Joe Shmoe.
If you don't feel comfortable with any of the above you can always call them and let them know you're ready to start right away, if you are are aren't, and that enthuseasm will often get you in the door. Be excited about the project and the clients will get excited for you to start.
Best of luck and let us know what you did and how it turned out.
Beer was created so carpenters wouldn't rule the world.
"Knowing that chances are our costs can't compete with someone else I have also been known to suggest that instead of estimating the who job, that we quickly demo and frame the space to eliminate the most uncertain stage, since that has to be done regardless of other options, then the client can get competitive estimates for the finish stage"Excellent option Don! Bob's next test date: 12/10/07
Sometimes before i start i ask them how much do YOU think this will cost, Then i might say well an average Kitchen goes for so much A window can average so much etc.
If you're looking for a good book/process for selling, check out "Solution Selling: Creating Buyers in Difficult Selling Markets" by Mike Bosworth. Around $20 on Amazon. This has been a standard in the technology industry for years (multi-day classes, etc.), but the techniques will work anywhere.
BTW, The budget big wigs will likely only care about 2 things: If you will go over/under budget, and by how much? For middle managers/execs in many companies, being under budget is as bad as being over budget since their allocation of the expense pie will be reduced next year if they don't spend all the money they got this year. This is one reason why capital spending spikes in the 4th quarter in many industries.
Be prepared to fixed-bid the job as that's what they'll want in order to lock down the number on their capital expense forecast. The actual amount is only relevant to the extent they can authorize the expense.