No Service Magic

Mike Finley

This shows how people in our industry don't actually really know what they are selling


Both of these quotes show that they both believe price is the main issue and the reason to celebrate your 'victories' is to celebrate being a poor salesman.

This is the mindset in this industry that keeps it at the level it is, keeps the wages low and is the hamster on the perpectual wheel running in a cage.

Somebody applauds the ability to go into a homeowners house and bend over and drop your pants! WOW! Awesome, that's really something to be proud of and hearld as an acomplishment.

What accomplishment is it? What merit is it to be the low price? Your greatest accomplishment is working out of a lower priced building? A garage? Your basement?

Please. Open your eyes and see the light.

If you want to have something to hearld as an accomplishment go out of your basement or garage with your smaller overhead and sell that same customer at a higher price then who you are following.

Now at that point you've accomplished something.

Until then you still haven't 'gotten' it yet. You haven't understood that victory isn't upon making a sale, its declared on making the right sale, not any sale.

DavidC

Everything else he said is gravy and garnish, good to have and completes the meal. But the real meat is in the last sentence.

Well said as usual Mike.

Good Luck
Dave

__________________
www.CookContractingLLC.com

Jmfocus

Disagree

If a guy/gal knows their expenses and beats another contractor on price because he/she can do it cheaper because of less overhead, then who is really the fool. Business is not about the trade you are in its about making money. To make money you need customers. To get customers, you must do a great job at a fair price. Some will do this better than others. Some have massive debt because they "had" to have that building or big truck or loader.... etc. Can you say overhead??? In this current economy, if you are not watching every penny and cutting expenses to maintain a profit margin, you are up a creek.

I am rarely the lowest price and I know how to sell myself. But I can compete because I can get close enough to make the difference with the customer because I know my numbers. If a real lowballer comes along, I walk.

But "price" is the difference in this economy most of the time. Anyone who says otherwise better be paying "top dollar" for everything.

You can't have it both ways.

CTDiesel

Good youtube vid here that reveals the lies about screening....
http://www.youtube.com/watch?v=MBpsb...eature=related

Another that further shows the lies about screening, I feel sorry for this
lady. Her deck is nothing more than firewood.
http://www.youtube.com/watch?v=p2SvyJH6jaM&feature=fvw

That's pretty much how they did me. I can't remember if I contacted them by phone or went through their website, but it wasn't long that I was contacted by a rep. She explained it all to me and it sounded alright and all. At the time I wasn't hurting for work so I didn't worry much about it. This chick called a lot though, at least 2 maybe 3 times a week for about a month, then some other bonehead called. I felt bombarded and although the rate of the calls decreased, it wasn't until nearly 8 or 9 months later that the last call came from some old sounding fella. By then I had read all I needed to read to know I'll never give that company a cent of my money at all. Even if they corrected everything wrong, as a penalty for all they've practically stolen from my fellow contractors I'll still stay away.

Mike Finley

How do you disagree when you agree with everything I said right up until the last 2 paragraphs?

We are in total agreement right up to the end.

Price is not the difference in this economy at this time. There are still plenty of good customers who are no different today then they were a year ago. The difference in this economy is those good customers are doing 1 of 2 things. They are staying out of the market, putting off spending their money until they feel safer, or they are feeling safer and are in the market no different then they were at any other time.

What you are seeing that is skewing the perceptions is there are a ton of those so/so customers that are in the market only because they think they can get a deal. Those customers are more plentiful right now and you have to weed them out.

(can you say don't do free estimates?) Those types run for the hills while the good customers who still exist are still willing to pay for your time.

Don't fall for this mindset that no good customers exist in this economy.

We are backlogged 90-120 days and have been since April. In this economy the difference is not that customers don't exist, the difference of success and failure is bringing in more leads and weeding out the bad ones and spending your time with the good ones.

This isn't any different then anybody should have done before, but the difference now is it's more important now then ever before because of the huge quantity of bad customers in the market right now, you may have to weed through 6 bad ones to find 1 good one. But if your marketing is only bringing in 5 you'll never get to the good one.

handyhands

I think you may have misunderstood me, Mike.

Not once did I say we're out there "low-balling" in order to get sales. We never drop our pants to get the sale, as we have much more of an overhead than most companies that run on a low budget. We have a showroom directly off of a major well-traveled road, 2 lettered company trucks, 2 lettered company trailers.

We work in 3 states, and have a decent advertising budget.

We do all of our own work and do not rely on subs.

We are licensed, insured and carry comp. on all of our employees.

There are 6 full time employees and 3 commission only sales reps.

Last years sales were above $2 million.

We have a superior quality window (composite) as well as offer several different lines of windows, depending on what the homeowner is looking to accomplish.

All I had said to warrant your tangeant was that I love assisting a homeowner in the cancellation process when faxing the appropiate paperwork to companies like Newpro or Renewal by anderson. These guys have a massive overhead, thus needing to sell their windows for anywhere's bewteen $1000-$1400 per unit. Understandable.

Back to the low-balling--when we go into a house and the customer says--"We got a price from Joe & Bros. Contracting for $279.00 a window. Do we still try to sell? Of course. At that point, we not only have the time invested but money invested as well. Worse case scenario? Our reps are able to polish their skills.

The reality is this. If you're dealing with a homeowner who is concerned about price and price only,-If you can't be competitive, you're screwed. I dont care what kind of salesman you are or how many rabbits you can pull out of a hat,....That's reality.

If you're dealing with a homeowner who is more concerend with quality, performance and energy efficiency? Perfect. We know what we need to sell for and where our profit margins need to be. If the customer says "Newpro was at $1199.99"....Are we going to be that much of an idiot and say--"Well, Mr. Jones--Our window is better, and out window is $1198.98?" No. We're not going to bend Mrs. Jones over, no matter how cute she is. We make a good living selling a great product and by offering a great service.

--Smiliar scenario:

If Mike Finley were in the same house as PC Plumber....Both there to quote "Mrs. Jones" how much it's going to be to dislodge something stuck in the toilet. Are you, Mike going to tell me after PC quotes the lady $49.95 just to bust out his plundger and go to town, that you're going to get Mrs. Jones to pay you $249.95 just because your plundger happens to have pretty colors on it? Come on, now.

DJM

Just kidding, but on a serious note, this thread felt a little more productive before all the squabbling.

...but it is an open forum so.....err.....forget I said anything.

Mike Finley

This shows how there is a disconnection from the real issue.

PC plumber would be in that customers house, we wouldn't be.

We would never get in front of that customer because that type of customer doesn't fit our criteria and would be a waste of our time.

While PC was in front of 5 of those customers and beating off the other lowballers one after another we would instead spend our time in front of 2 customers who are willing and able to pay $249.00.

A customer who is looking for a $49 solution won't hire somebody with a better $249 one.

A customer who is willing and able to pay for a superior $249 solution won't hire someone offering a $49.00 one.

That's the secret that is missed in contracting. Some of us think the only smart business model is to offer a $39.00 solution since everyone else is offering a $49 one.

Silly, silly, silly.

Mike Finley

Does everybody know that you can buy a steak in the supermarket for $4.95 a pound on sale and cook it yourself?

You can buy a steak at a McDonalds served on a bun for about $6.95 and get it served to you over the counter in a paper bag.

You can buy a steak at a Ponderosa or Sizzler rest, by walking down a cafeteria like line and have it served to on a metal plate by a teenager, and you get to sit at a table and eat it with silver wear, for about $12.95

You can buy a steak at an Out back restaurant, in a nicer setting for about $19.95

You can buy a steak at a local steak house type restaurant for about $29.95.

You can buy a steak at a well know national steak house such as Ruth Chris for $49.95


All of these places are offering a steak. All of them are selling them at different prices.

Think about it. Is the difference in cost mainly distiguished by the steak itself or not really, the big difference is the marketing, or in other words the experience that comes with that steak depending upon where you are eating it?

Think about it.

Scribbles

Great points. The most valuable thing I have learned from this site is learn who you want to work for and build you business accordingly. I know a lot of blow and go guys that make more than I do. But that is not who I am. Who do you want to be?

__________________
http://sacramentomillworks.com

MZ-HANDYMAN

The only experience i had with them in a work environment was with a buddy of mine who used them breifly. We did get a few door and window replacement from them and I guess he was doing well since he charged a lady $1100.00 to replace a kicked in door. And I (Working by the hour) made about $40 replacing the buted door & installing another door.

Wait, I take it back I made $200 on the side selling and installing the old door on the side. Boss said I could keep it! Just had to replace one jamb and I had my customer buy it.

I did contact Service Magic on my own but it just turned into a constant contact by phone and e-mail... They Spam the hell out of you!

Oh yeah the ENGRAVE-A-CRETE people are even worse... Do Not Order Their "Free" Brochure!!!!

MZ-HANDYMAN
Had to work for Momma today!
Converted 8 drawers in a hallway to a 3 shelf cabinet and took out old particle board sliding closet doors with two 36" six panel hollow core doors. Came out pretty good!

Handymanservice

Damn, now I want a steak.

Isn't that basically, sell the sizzle, not the steak?

I know for a fact we all make decisions like this everyday, one way or another. We choose name brand over generic or vice versa.

It comes down to, not everyone is your customer. Figure out who you want to work for and go after that demographic. If you use SM, good for you, if not, good for you. It is funny how you can tell someone your experience and that will dictate how they "feel" about something.

It is the same with pricing. My prices will not sustain Mike's company, his may very well sustain mine, but I would probably not ever charge the same amount (at my current size/overhead/needs). I base my pricing on my family's (is it family's or families?) expenses, goals, wants, needs and desires, my companies overhead, how many hours I want to work a year, etc.

It is not too difficult to come up with a number to charge per hour, the problem is charging that much per hour, and ending up working less hours. You have to be able to adjust on the fly, if you are not hitting your goal. Try SM, try anything you have to, just don't bitch about it if it doesn't work, chalk it up to experience, share it if you like and move on.

In the end, you are held responsible for your decisions, no one here has to explain to your kids why there is no food. Do what you gotta do.

__________________
"You can shear a sheep every year, but you can only skin him once!" Remember that when dealing with your customers and pricing.

http://www.yourhandymansite.com

Mike Finley

Thats right.

Now the other side that most of us don't understand -- take all those different places that you can buy a steak. Does the one charging $49 just charge a higher price and pockets the difference between the lowest price option? Is it all just gravy between the two prices? Or is there an overhead difference?

Of course their is, the overhead changes with most of them. Consider just one facet - the lowest price rest for instance the sizzler - will have staffing that just barely covers what they do. They might keep a staff to guest ratio of 1 to 20. On the other end the high end steak house might keep a staff to guest ratio of 1 to 5.

That's an example of the higher cost of doing business with higher end customers.

Keep on taking this further and now consider the product the customer is gettng.

That 1 : 20 ratio is less overhead but it is also a different service level. Drop your fork and you probably will either wait 10 minutes to see a live person to help you and you'll have to beg them for that help, now drop your fork in the 1 : 5 ratio high end restaurant. Before the fork stops bouncing no the carpet someone will be presenting you with enother on a felt lined platter.

This is the corrallary to construction, it's the same thing in every aspect.

Now does anyone see how foolish it is when somebody says "I love going behind company X and selling my product at 50% less and closing the sale?"

Think about it.

J F

now I'm hungry

THEHANDYMAN

All in all this has been a pretty good topic, we all just need to agree to disagree with each other. We all have different views and needs, myself working out of the garage works just fine and is what I want to do and choose to do. HANDYHANDS seems to work for a rather nice company and thats great. I just don't want the headaches, I want to take a day off when I want one without worrying about someone else.

After two years with SM I am now getting a good customer base with several referal jobs, or repeat customers, not enough to keep me going though. If it wasn't for that SM check I get every week for being a plant I couldn't survive, now that I have been uncovered that will stop and I will have to work OH WHOA is me!

handyhands

...

handyhands

Take a turd....Sprinkle confectionary sugar on it.

Take another turd....Cover it in chocolate jimmies.

My guess? Either way, it still tastes like *****.

J F

now I'm not so hungry

Mike Finley

and what's your point? That nobody but the low bidder puts out a good product?

handyhands

Not once have I ever said anything like that. One of the points I was trying to make is rather quite simple. Around here, unless you have an "exclusivity" with lets say, a particualr window that ONLY YOU HAVE, than it is very likely that when going to a window estimate. And being one of SEVERAL contractors that may be trying to sell the homeowner an alside excalibur window (as many out this way do), are you seriously thinking you can sell the same window that "pick-up Pete" is offering for $279 for $479 because you pull up in a 2008 Silverado as opposed to 1998 King Cab? Or because you might have a couple extra words in your vocabulary, or wear a Ralph Lauren shirt as opposed to the guy that's wearing the walmart special?

If you truley are able to educate the customer, unless they're absolutely clueless, yes-you're in a bidding process if you want that job. I perfectly understand that you wouldn't ever find yourself in a position like that, nor do we place ourselves in situations like that. I was simply trying to make a point.

I truley beleive that we have a superior product that warrants the price we sell it for. We aren't low-ballers,---quite simply, we can't afford to be.

I would consider yourself fortunate in having the luxury of placing yourselves soley in the eyes of people ready to break out the checkbook for your services. We give it our best, and win some, and lose some.