What Do You Say To This...

We have all had this question before. It can be phrased several different ways, “Ball Park Pricing” or “Approximately” are the most common examples. I personally get this from several different kinds of buyers weekly. My first buyer is just looking for pricing for whatever reason. They might be closing on a house and looking for costs or budgeting for income tax refund day. In my case this past week, I visited an investor who just bought a 2 bedroom house and wanted to make it a 3 bedroom house and add a bathroom.

Read More...http://www.contractortalk.com/articles/2014/08/what-do-you-say-to-this-what-do-you-think-this-will-cost/

Justin

Can You Get A Crew Together?

I love getting the calls every week from prospects looking for me to get a crew together. Typical conversations dont start with "Can you get a crew together?". This past week I decided to have some fun with the person on the other line. Here is the conversations:

ME: "Hello, this is Justin how can I help you"

Bill: " Hey Justin, my name is Bill and I got several properties were looking to rehab and I wanted to know if you have a crew or can put a crew together?"

ME: "WOW, Bill where did you get my information?" "I would love to help you, tell me more"

Bill: Goes on and on about investors, and addresses, and working with tight budgets, etcccc...(Minimum 7.5 minute explanation)

ME: "So, who referred me to you?"

Bill: "I got your info online and I like the name of your company, are you interested in these project?"

If you have been in business for decent amount of time you have come across this type call. They have no clue what you do and really have no interest in knowing about you or the value you bring to the deal. I am not interested in going through the hiring process for someone I dont know. Testing strangers out on customers I have never worked with before. Supervising multiple jobs and being pulled away from existing customers. What do people really think about what I do? Do they devalue my trade so much that they think I wave a magic get er done wond and the project comes together..

I usually let them off with I am too busy or I am just not interested. I decided to see how far Bill wanted to go with this. I meet him today and will follow up with everyone next week.

How do you handle this, tell me your story?

Comments welcome.

Does 10 Estimates Keep You Honest..Follow Up Video.

Wow this blog post has gone viral through the Contractor Community.

I had the opportunity to interview the 10 estimates customer. He got to breakdown his thoughts and hiring process. Check the video out and leave some comments below..

Here is the original Post:
http://sellingandmarketingforcontractors.blogspot.com/2014/03/does-10-estimates-really-keep-everyone.html

The Contractor Secret Weapon Weekly Podcast is growing. Here is the latest episode to help with Unique Selling Proposition. Hope you enjoy.

http://contractorssecretweapon.com/8-usp-in-your-marketing-what-makes-you-unique/

Does 10 Estimates Really Keep Everyone Honest?

Good Morning.

I attended a networking event this past Tuesday morning. One of the guys in the room told me how he just finished his roof and it was AWESOME.

He started telling me the features and warranties.

I stopped him and asked, "I thought you replaced your roof months ago?"

Response, "I got 10 estimates and couldn't decide."

As the scramble eggs projected out of my mouth..... 10 ESTIMATES..What do you need 10 for?

Response, "I wanted to keep everyone honest."

I was beside myself. He wasted everyone's time including his own. He didnt choose the lowest bidder. He didnt choose the highest. He made his decision based off What?

Does anyone else get this?

Please do me a favor for my sanity and leave a comment..

Click Here for most recent Podcast-Just Added Interview With Contractor Marketing Expert Pete Mitchell

Justin

How You Avoid Being a Commodity Contractor.

This is a follow up to last weeks, commodity contractor blog post.

I had the pleasure of having coffee with a very wealthy client that turned into a very expensive lunch and great conversation. Luckily, he paid.

Somehow our conversation between two men took a drastic turn when the topic of Nordstroms started. We have a local Nordstrom in Tampa that his wife was shopping at while we had coffee.

The only thing I knew about Nordstrom is they sold higher end clothing/shoes and to keep my wife away.

I asked, "Why does your wife like Nordstroms"
His answer was priceless, "My wife can spend hours in that store, they have a personal stylists that assists her every step of the way. She likes the layout of the store, very open and welcoming. She earns points on her Nordstrom Card toward future purchases. She goes to the other stores Neiman Marcus, and Saks but, really goes back to Nordstrom for the personal touch. Lastly, the stylist will call or email when they have new arrivals that fits her style."

I would typically space out while another man talked about a department store. I found myself asking more questions. I was curios to see buying habits of higher end customers. Customers that could choose to shop wherever they wanted but, found themselves spending thousands of dollars in one store.

My findings and how they pertain to Contractors:

Nordstroms has 5 competitors in the market place. They have carved a great niche with high end and personal services. The wide open store layout invites customers to freely walk through the store and take in everything Nordstroms has to offer. Lastly, the return policy is 100% Guarantee.

Enough about Nordstroms.

Ways not be a commodity and more like Nordstroms:

1. Position yourself as the expert. If you are the best at what you do, you dont need to talk about being the best. Show your expertise with articles, and answering questions on community dashboards. Highlight your projects through social media and be open to answer questions and let prospects freely look around.
2. When customers arent asking for your bid or price, but when they can get on your schedule. Welcome to the Nordstroms experience. You are the contractor they want and will wait until your avialable.
3. Your 100% satisfaction Guarantee. Offer that longer warranty, your business uses better materials and trades. Extend the guarantee and warranty.
4. BONUS. Stay in touch with your customer. Thank you card or pictures taken during their project with personal note from you. Bottle of wine with your label. Anything that keeps you top of mind.

Creating a higher end niche keeps you out of price wars. Spending more time on higher end will garnish higher profits and better referrals. How do you want to spend your time price wars or profits?

Want to know more about selling to higher end? Call me or send an email.

Justin 727-644-0160 or Justin@ContractorsNetworking.com

Is Price Per SQFT Coming Back?

I drove by this sign last week while riding from Pinellas to Hillsborough. The big debate was going through my head.."Do I call this company and tell them to up their prices..or...Do I call them and remind them price per sqft ended in the 80's"

I figured I would just write to everyone and get some opinions.

For those of you who don't know price per square foot, I will give you a little back story.

During the good old Reagan years when interest rates were 18+% builders had several different home models, these models came with limited choices and could be figured out by the sqft price instead of calculating in all the different trades and selections. This was great for buyers that would pick A,B, or C.

In today's world with all the different choices, price per sqft doesn't work. Prospects will still try to ask about the sqft price and good contractors quickly explain.."It doesn't quite work that way..."

My local market, Tampa Bay Area you cant build for $90/sqft and make a living. Not possible, if I had to figure out per sqft on my last couple of deals, the median would be around $144.

Please tell me what I should do in this situation? I dont want these guy bringing this back to my market..

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?

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?