Rockstar Contractor Mindset

I love the term Rock-star for multiple reasons.

1. I grew up in the 80's watching Aerosmith, Def Leopard, and some other Rock bands of that time. I believe this was some of the best music ever produced. I didn't agree with their lifestyles but, when they took the stage it was magical. The term Rock-star means performer.

In our businesses today we perform. Some of us Rock-stars and some wannabe's waiting to crack the code to being Rock-stars.

The first real piece of advice for being a Rock-star Contractor is knowing your audience. We call this target market. I want to make sure my performance is specific to who wants to hear me. 

Who listens to me now and pays me? This is the best starting point. Your existing customers know you and will be glad to spend more money with you or better yet tell you why they buy from you. Armed with this information you can now start to target your audience.

Let me ask you this, if Kenny G were to come and perform during an Aerosmith concert do you think the fans would listen or boo him off the stage?

Don't be Kenny G.

No need for comments, just pass this on to your fellow Contractor.

Can You Estimate This Small Project For Me?

"Hey Justin, were loving the new kitchen and bathroom and wanted to know if you can help with an exterior door and some trim?"

I got this call yesterday from a great client. In 2012 I did a very large remodel to their house and now they have an exterior door and some finish work they want done. The scope is no more than $1200 and doesn't fall in line with my everyday work.

I know others have been in this dilemma..Do I install or refer out?

I figured I had some options:

A. Suck it up. Its my client, install the door and quite crying about not making money.
B. Call my Finish Carpenters and hand them over scope and client referral.
C. Man, Mrs. Smith great hearing from you but, I cant help right now...Maybe in 45 days I can get to it.

Do you have other options?

Customer Experience...Survey Says

The Survey Says....

Growing up I watched the game show Family Feud every week. The host, the late Ray Combs was a stand up comedian who did a great job saying SURVVVEY SAYS making the dramatic point and then revealing the final answer for the contestants, who found their fate. In business today your going to get 1 of 3 on your survey, and find your fate.

1. You will have a raving fan.

     You were a Rock Star from beginning to end. What you sold, got delivered on time and within                      budget. You communicated everything and followed up like a champ. We all want these raving fans,              but overall experience says this doesn't happen as often as possible. Over the next week I will be                  focusing on making raving fans and what raving fans look like.

    2.   You will be UH...OK.

   You were a rock star in the beginning and ended OK. The customers expectation wasn't met 100%.            Your a good person but, OK Contractor. You wont get referrals, but you got paid. The mediocre                customers experience will end as the wet ink touches the check.

   3.   Disappointing

  You started out a rock star and went down in flames. The customer is upset and telling everyone about         you on Facebook. The old saying of upset customers telling 10 people died with the digital age. Now,           if someone is upset 100's if not 1000's find out.

The best advice that I could give would be to start surveying in your business. I know when my customers aren't extremely happy and I can feel the tension in the air. I have been blessed with a gift to sense tension and can eliminate whatever is making them feel that way. I prefer to use digital surveys through survey monkey but, every once in while I will go old fashion and meet with the customer with pen and paper to find out whats going on.

How does your survey look?

A Challenging Customer Transformation.

I recently had this great experience with a good High End customer. I am in the middle of Constructing her house and she has been a real challenge. Cant make up her mind, then when she makes up her mind it changes. So much of  a challenge that everybody is talking about her.

I cut a thin piece of concrete off some garbage being tossed out on her job. I then added a personal note to this piece of concrete, " To Mrs. Goldman, I really appreciate our relationship and I am glad your starting on a solid foundation." I gave this to her yesterday and she broke down in tears. The WOW was there, speechless. After gathering herself she started to explain her personal situation of getting everything perfect.

This was a groundbreaking experience that I wish I could share with all my customers. Getting to know my client on a deeper level got me thinking. Watching this transformation before my eyes was an awesome experience.

Something so small that I normally toss in the trash had this huge impact and deepened our relationship.

Do you think she will refer me to everyone? You bet.
Will she hold onto that memory forever? You bet.

I will start making this more of a tradition in my business. Taking materials from the job-site that would be considered trash and personalizing for my customers. I don't expect tears from everyone, but personalizing and creating that WOW is good enough for me.

Do you have anymore ideas?

The #1 Indicator To Measuring Your Marketing.

How do you measure your marketing?

I ask this question to a group of contractors and the responses are all over the place.

Some feel the number of leads that come in, divided by the marketing budget gives an accurate measurement. Most, keep track of calls on a spreadsheet. Some of the recent directories have started tracking this information for contractors. This is great information and gets you closer to measuring but doesn't give you the real picture.

Others feel closed business divided by your marketing expense.
Example, if I get 100 Calls and close 25, I keep track of the 25 only? Is that how to measure? Lets look below.

The 25 shows your conversion rate. Taking the number of leads that come in and dividing by closed prospects equals your conversion rate. This number is the indicator for measuring your marketing efforts. 

The best part about knowing your conversion rate is knowing your customer cost per closed business. Typically speaking in our industry the cost to acquire a new customer is between $250-$1200 and depends on your local market. My local market the cost is closer $250.00, If my business was located in NY City the cost would be much higher.

Keeping track of this number alone is key to measuring your marketing efforts.
Do you have any suggestions for tracking or tips to simplify?

ReNegotiating After The Sale..

Have you ever had to renegotiate after a signed contract?

My usual experience with Re-Negotiating is Lose/Win. In business we go for the Win-Win, everybody gets what they want and everybody is happy.

Recent Experience: An existing customers of mine wanted a better deal after we signed a contract for several thousand and finished the same day. There justification was "Wait, I am paying you like $300/HR. That isn't right."

I know if you have been in business for any amount of time you have come across this.

This is my 4th or 5th experience with renegotiating and every time the customer wants to revise the contract nobody wins.

My latest experience ended in Win/Lose. I did not negotiate after the job was complete and the customer was upset. My justification, "I have been doing this same scope of work for 7 years and I know exactly how to complete all tasks efficiently. If I didn't know what I was doing and spent longer figuring out what to do on your house would that make you feel better served and justify the contract?"

Tell me your experience and solution outcomes?

Selling With Heart Still Requires Profit

I recently sat down at a coffee shop to have a serious conversation with a residential contractor. This contractor was struggling financially. He had plenty of work going and his sales funnel was packed. After a little bit of conversation I realized that his sales formula was incorrect. He enjoyed the art of selling but never took into account markup is different than profit. 

He would take his cost to handle the job and add 10%. The 10% he figured was for him. After taking some time over coffee and explaining to him you  must include your money in the job, along with your profit, then mark everything up.

The light bulb that went off that day was priceless.

Further, he was not job costing. Didn't have a handle on receivables. A hot mess he was.

I asked him if he ever read the book by Michael stone, Mark Up and  Profit? Michael did a great job in the book explaining profit and markup.  I gave him some quick pointers on how to get out of the situation and start estimating accurately:

1. Don't accept another job without at profit at a minimum. Customers will give you work all day long and     not care one bit if you're making money.

2. You will raise your prices. Don't sell yourself short.

3. You will have to start tracking your jobs to make sure your marking up appropriately. Simple formula        for contractors:

           Sales-(Overhead + Profit) = Job Cost

           Sales/Job Costs=Markup

Before he sold anything after that point I got a couple calls to make sure for estimating accuracy. 

Do you have similar situation where you hadn't a clue you were estimating incorrectly? The jobs were there but, no money once done?

Give me your comments below. 

5 Tips When Selling Outside Your Sweet Spot

We have all been there when the phone rings and your talking to a prospect and everything is going great, the scope is ideal, Start date is perfect, and location is outside the sweet spot. The thoughts run through your head....UH....I...DONT KNOW.

How do you handle this?

I have both good and not so good experience working out of the sweet spot.

I weigh the options really good before submitting proposal:

1. Who will I be working for? Existing customers referrals might get me there, new customer non referral questionable.
2. Will this interrupt any other jobs? How many additional resources will be needed to make project deadlines? In addition, will this effect other jobs in progress and on calendar?
3. Do you have connections outside your sweet spot? Supply houses, Tradesman, and Equipment are the biggest obstacles that I came across when working out of area.
4. Supervision. This is what I failed to account for. My usual route did not include the long distance ride. When on site questions needed to be answered I had to rush, leaving other local jobs to answer the questions.
5. Completion Schedule. How much more time do I need to allot for? I missed some deadlines and over extended my team and resources to complete in a timely manner. I barely salvaged the job and my referral partner was not excited about my performance.

In the end you will need to decide if this project is worth the price you might have to pay. The referral partner relationship that will be tested if you don't execute.

The above picture shows my sweet spot and two jobs that came up yesterday. Both profitable and got me thinking. 

The first thing I did was start making calls to see if I had connections in the area-Answer NO. 

Second was Google suppliers and equipment in the area-Answer YES

I had a talk with my senior team members and went over scopes. I personally did not accept either project once I weighed the top 5 questions. 

Give me your thoughts on how you handle these sales situations?

Can You Give Me A Rough Estimate?

I get several calls a day from potential prospects wanting me to give prices over the phone. On this particular job the prospect wanted the above bathroom fixed. They asked if I could price this over the phone. Instead of giving what kind of ball park typical response "Wrigley or Fenway Park".  

I go through my qualifying questions to build a little rapport:

Me: When did the bathroom tile fall of the wall?

Prospect: We started to notice the issue a little over a year ago.

Me: When would you like me to complete the repairs/replacement?

Prospect: Were gathering estimates at this point. Once we decide who we like, we want completed asap.

Me: Do you own the home?

Prospect: We dont own the home. We are getting estimates for the Landlord who lives out of town.

Me: When is owner available for an appointment if necessary?

Prospect: He asked us to handle.

Me: Can you send me a picture with info so I can get an idea of what needs to be done?

I got the above response. Pictures and contact info. What is your next step? Leave your response below?

10 Must Have Marketing Pieces for Contractors

I had the pleasure yesterday to listen to one of my friends Sandi Burnside talk to a group of Contractors about the "10 Must Have Marketing Pieces for Contractors"

My personal takeaways from yesterdays event:

1. Perception is Reality

• Use Quality materials in your marketing materials.
• Use an Email address that matches your domain name. 

2. Be Consistent

• Your website, marketing and promotional materials should all integrate
• Same Color
• Logo Placement
• Look and Feel
• Remember the 7 touches of marketing.

3. Show your customer you are professional. License number and Insured.

• If your information needs to be updated. Dont wait until the next print cycle for cards or flyers. Update now.

4. Make sure your contact info is easy to find.

These were my personal takeaways and I would like to have Sandi on Hangouts go through the top 10. If you would like to hear the top 10 leave a comment below. Enough comments and I should be able to get her on...

Justin

Selling Results To Increase Profits

I recently had the pleasure of meeting with a customer to about remodeling their pool. I typically don't tackle pool remodeling but, decided because of the referral to look at the project.

I met with the customer who explained they wanted the above picture in their backyard.

My first response, "This isn't your typical pool remodel" Here is what I can help you with on this project:

1. Establish the plan of action that will be needed to get you the pool and spa of your dreams.
2. Coordinate the designer and pool remodeler.
3. Maintain contact with trades.
4. Coordinate with the building department.
5. Weekly meetings with you to discuss changes and projected dates of completion.

I sat in their kitchen and discussed how the process works from start to finish and I would be subcontracting everything out.

The owners response was priceless. "Justin, your transparency and being able to recognize what you can handle and cant is the reason your in business today. The reason we also want to move forward with having you handle our remodel for your FEE."

I have never had that response from a prospect. But, I realized after seeing the project and they had no clue how to get started. The value I offered was helping them get focused and started.

Think about this for a second.

• No testimonials for pool renovations
• No pictures of completed pools
• No pretty pamphlets on pool remodeling. 
• Nothing. 

Take Away: By focusing on the results the customer was looking for and not over extending my capabilities the customer recognized the value. 

I gave my professional opinion and outlined what they will need to do and how I can help. Concentrating on what you can do to get the customer results far out weighs what you cant do.

Give me your experience on this below in comments please?
Justin 

Open Season, Now Go Sell Something

We're through the holidays now and working back into our daily routines. Today is January 12th, two weeks into the new year have you sold anything?

If you have congratulations.

If you haven't, why not.

1. No more excuses, ALL THE EXCUSES ended January 1st. Prospect are back into routine and ready to buy.

2. Mindset, It's time to call, make appointments, and follow back up on end year prospects from 2013.

3. Follow up, Looking through last quarter is there any prospects that could use a "hey" email or note?

I wish you all the best this year. Take action now, the season is back open again.

Justin Jones
Contrapreneur