Pricing Against Low Ballers

red_cedar

What method do you guys use to try to get projects when you have to compete against lowballers who sub out there work.

I just found out from a lead/potential customer that so and so is coming out to give them an estimate. At our earliest convinence could we come out as well.

The so and so subs out labor work cheaply and supplies hit and miss work. Possibly to the trained person the work isnt realy all that good.

I am just tired of low ballers. What do you guys do.

POOLMANinCT

i priced a inground renovation yesterday, i came highly recommended...

HO is also getting a bid from an outfit in the area, i know they will be about 30percent below me for the same products...

i said "they are low, i dont understand how they can operate like that... We will supply the exact specs we promise & my men & i will do the job correctly"

im confident i will bring this one in, it is not an easy job water table is about 6ft down, sand bottom, i know its not going to be a cake walk..
i conveyed this also

slickshift

Don't try and compete on price
People that only shop by price aren't the best customers anyway
In fact, they are the worst kind of customer, and will drop you like a hot potato top save $50
And there will always be someone hungrier, more addicted, more broke, more illegal, and cheaper than you...always

Easier said than done I know, but that's the best way
Don't even consider the low-ballers your competition

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Originally Posted by ModernStyle I have never used this crap before and I pray to the paint gods that I never have to use it again, I would rather use Behr

AtlanticWBConst

Everything you wrote is dead on....

Experience last month:

Lady's father dies. Mother has Alzhiemer's. She needs to move into the home's basement to take care of mother. Basment is water damaged. Insurance check is less than $18K.
She gets a price to re-do her basement $40,000.00 - I know the guy, he is expensive. She says that she only has a limited amount of money from insurance...
We sit down with her and give her a 'cost effective' price and show her that she can save money by doing somethings herself (painting, insulation, etc)
We give her a super low-ball price, not to compete with anyone, but to help her out in her situation. Around $12K (Local wiring inspector agrees to help out and do work for CHEAP, Tile guy-entire floor install for $1.5K Labor)

A few days later:
She calls me and says sorry, that her brother has a 'guy' to do all the electrical, tile floors, dropped ceilings, heating, new windows, etc...etc...for $8K with materials....

She says that he will work for like $100/day...



Not even worth my time...I just thought to myself....you stupid, stupid GREEDY person...
I said to her: You know...you get what you pay for.... (Good luck...)

(I wasn't mad at all, just felt bad that she would be so brainless as to not realize what she was actually going to get. Right away, I knew it was all about the money....)

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POOLMANinCT

so she is going to get her basement & make 10Gs,,,,

does she really believe thats possible...

i just bought a 2005 ford ecoline, why didnt i buy an 81 dodge scooby do mystery machine??? w/ her logic i would have

YourWayPainting

I don't even worry about the low ballers. They will work themselves out of business eventually.
I do quality work for a fair price, and if they want a low baller ... well, like AtlanticWBConst said ... you get what you pay for.

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A good paint job isn't cheap. A cheap paint job isn't good.

troubleseeker

It doesn't make sense for someone who produces high quality work, and knows that they are fairly priced, to worry about competing with the bottom feeders. All of our work is through referrerals, so this only rarely comes up, but when it does the response is that we simply cannot do the quality of work we produce for that amount of money, and we appreciate the chance to look at the job. Do not attack the other biddder. Most of the time, this leads to more discussion about the numbers in our quote and why they are justified; out of the ordinary conditions such as a complicated roof tie in, all new plumbing and drain lines tied all the way to the mains instead of just added onto 40 year old marginal existing plumbing, etc.. I estimate that we end up with 75% of these projects in the end, once the HO is helped to see apples to apples. If they are still only interested in dollars with no respect to quality, I gladly walk away. I do not want to build a customer base of referrerals among low price shoppers.

tinner666

"It doesn't make sense for someone who produces high quality work, and knows that they are fairly priced, to worry about competing with the bottom feeders. All of our work is through referrerals, so this only rarely comes up, but when it does the response is that we simply cannot do the quality of work we produce for that amount of money, and we appreciate the chance to look at the job."
How true. First words out of my mouth after the introductions are "Can you afford me? Do you want to PAY for me to do the work? If not, I'll name some lowballers for you so you can base your decision on price only."

It cuts to the chase in a hurry. Results in much fewer estimates given. About 4 to 8 a month. Results in a higher PERECENTAGE of signed contracts out of estimates given. Around 70-80%.

Why bid apples when somebody wants grapes?

dirt diggler

you can't compete with them

you'll go broke!!!


smart consumers know this too, evidently


there's not as many lowball landscapers and painters running on the roads right now ...

things are slow ...

they're getting squeezed out

Tscarborough

We don't compete with low-ballers; only quality, service oriented competition.

red_cedar

I think I will look at this job along with some other jobs that day. That way the travel time 1.25 hrs one way isnt that big of a deal.

I am pretty sure I am aware of how the other so and so operates, so I can work ( manipulate) to my advantage. Maybe, we will see.

AtlanticWBConst

Absolutely. When you are starting out in the biz, they are the ones you come up against alot.

When you have been at it a little while, do good work, and have the same reputation - and are getting repeat busienss thru word of mouth referrals.....


You no longer need to beg....

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AtlanticWBConst

Agree completely...

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AtlanticWBConst

We also don't want to do 'cheap' work.

We are in the business to make a living.....but also to do 'top quality 'work...

Work that can challenge our skills.....and that we can be proud of...

.... delivering quality ...... that is what brings job satisfaction.....


at least to me it does.....

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Bone Saw

Heres some correspondence from another pushy HO that thinks by virtue of my being in business that I owe him something this guy apparently does not like the way I do business, yet He keeps contacting me???


----- Original Message -----
From:
To:
Sent: Friday, March 23, 2007 1:46 PM
Subject: Decks.com Template Site - Request Custom Quote




I would like a custom quote.

NAME: Greg
COMPANY:
PHONE:
EVENING PHONE:
CELL PHONE:
FAX:

EMAIL:

ADDRESS:

CITY:

STATE: PA

ZIP: 19380

SERVICES: Decks, Carpentry

APPROX AREA: 300 to 500

TIMEFRAME: Just Inquiring

HEARD ABOUT THROUGH: Trex

Thank you.
You can contact me at *** or REPLY to this email.






Hi 03-24-07
Feel free to fax or email your dimensioned plan, elevation and section design renderings and material specifications (noting township) to me and I will send an estimate promptly; Or let me know when you would like to set up an appointment to have me come out with sample material, survey the location, and work out the design. I charge a $60 fee to do this, which is credited back on final invoice if I'm hired. All design work is proprietary information until hired. Attached are references, insurance declarations and state business registrations for you to view at your convenience. Feel free to contact me anytime.
Sincerely,
Chris Kadyszewski
484-467-0458 - phone
www.customdecksandcarpentry.com






Chris Kadyszewski c/o Custom Decks & Carpentry
Malvern, PA 19355


GREG


April 3, 2007



Chris:
Per my e-mail inquiry, I'm inviting Custom Decks & Carpentry to bid on a deck replacement and roof construction job at my home in the Ryerss Hunt development. I did receive your response, but I will not agree to pay any consultation or design fee for this job. The high-level specs for the job are outlined below:
PHASE 1: DECK REMOVAL & INST ALLA TION
1. Destruction and removal of existing upper decking (20' x 12').
2. Inspection of existing footings and lower decking.
3. Additional footings for outward expansion and to support a roof.
4. Construction of21' x 18' composite deck with the following specs: - Composite railing system with lighting
- 8' wide steps with handrail facing west
- 8' wide steps with handrail facing south
- 30" x 42" table attached to deck railing (specific spot next to grill).
PHASE 2: ROOF CONSTRUCTION
1. Design and construction of permanent roofing to cover new deck.
2. Water drainage via gutter system with leaf protection.
3. Painting and siding installation.
4. Optional ceiling fan installation.
Please contact me to set up an appointment to discuss the following:
1. Estimate for Deck Removal & Installation, including any discount for using the existing deck
infrastructure (footings, joists, ledger board, etc.). - Your pricing model ($/square foot, etc.)
- Issues related to expanding the width of the deck and using the existing infrastructure
-. Your recommendation of which composite decking product to use (ChoiceDek, TimberTech,
Trex, Veranda, other)
2. Estimate for Roof Construction. - Preliminary design ideas.
- Number of footings required to support the roof.
3. Ability to perform the work in 2 separate phases & any impact to cost or usability.
4. Earliest date you are available to start the job.
I have enclosed a copy of a basic design and a picture of the existing deck to help you visualize the job. Please only respond if you can manage the entire job (phases 1 & 2) as specified above, working with a fixed price contract. I can be reached at 610-669-1795 during normal business hours Monday thru Friday, or at 610-431-8712 evenings and weekends. I look forward to discussing the job with you. Thank you.
- Greg



Deck & Roof Letter - Kadyszewski.doc


Page 1






Hi Greg
I received your letter today and it contained no dimensioned plan, elevation or section design renderings. I am assuming the job is located in West Whiteland Twp. In phase 1 you specify composite railings with lighting and in phase 2 you specify siding and paint installation, I am confused. Assuming that the siding installation pertains to framed walls for the roof, are you proposing installing lighted railing only to tear it down for the latter roofing project? or are the walls and roof to be inset from the decks perimeter so as to have a walkway around the "outdoor room"? Are there doors, windows, screen, insulation, skylights, electric, etc? What are the interior specifications for the walls and ceiling? Based on my interpretations and assumptions on the information provided as it pertains to phases 1 & 2, you could be in the "ballpark" of $40,000 +/- several thousand dollar variables??? Feel free to fax or email your dimensioned plan, elevation and section design renderings and material specifications to me and I will send an estimate promptly; Or let me know when you would like to set up an appointment to have me come out with sample material, survey the location, and work out the design. I charge a $60 fee to do this, which is credited back on final invoice if I'm hired. All design work is proprietary information until hired. Feel free to contact me anytime.
Sincerely,
Chris Kadyszewski
484-467-0458 - phone
www.customdecksandcarpentry.com






Open air roof. No screens, windows, walls or insulation. Siding and/or paint are for the sides of the roof. Imagine seeing a triangle looking at the roof from the side. You are one of 6 in contention for the job . None of the others are asking for any up front design fee. Please let me know if you still want to meet to discuss the job on my terms. THank you for your response.

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Chester County Custom Decks
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mikesewell

Several methods. Here are just a few:

1. A small percentage of customers demand high quality that the other contractors can't produce.

2. A small percentage of customers have very profitable projects that are so difficult that the other contractors don't even have a clue on how to do the job.

3. A small percentage of customers have very profitable jobs that can only be done with equipment that the other contractors don't have.

4. A small percentage of customers agree to pay your (fair) quoted price, and don't even bother to get any other estimates.

5. A small percentage of customers know more about contracting than most contractors (they may even be contractors, architects or engineers themselves), so they ask technical questions that the other contractors can't answer. The first time a prospective contractor stumbles on an answer, he's gone.

6. A small percentage of customers are highly educated white collar workers but are not mechanically inclined, so they have no way to judge a Contractor's abilities except by his grammar, poise, and appearance.

7. A small percentage of customers will hire you because they like you.

If you think about it rationally, you will come up with many more methods of your own. The methods that will work for you depend on your own abilities and how hard you have worked to prepare yourself to be a successful contractor. They all require some effort on your part. When you add them all up, they will net you lots of work.

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Commercial construction

Sewell Construction

AtlanticWBConst

Yes Mike, I have definitely seen all of these points at one time or another in the business....and with contracts that we have been able to retain ...


...Thanks for bringing these out...

Like you mentioned, It's not just about the work you do....it's also about how you 'carry' yourself, how you 'carry and present' your business...how you go about what you do...how you think, observe and interact with your client base....etc, etc...

Alot more can be said (in agreement) about the points you make...

(Basically, it's about bringing your business, your work, your customer service, your quality to a higher level - in every aspect - professionally......) the equation = higher paying contracts and better clients, who appreciate quality and are more than willing to pay for it...

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mikesewell

Well said.

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Commercial construction

Sewell Construction

AtlanticWBConst

One more thing....

'Bringing your personal and professional ethics to a higher level...'

....if, in fact, they are not there already...

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mikesewell

There is no other option.

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Commercial construction

Sewell Construction