DavidC

We are quoting an addition and freestanding garage. Ours was the 6th and last quote, and the highest. Our estimate is 120k, the lowest is 50k. When asked what the difference is, our salesman asked to sit down and see if it's apples to apples.

Of the 4 lowest proposals there was one on a letterhead with the rest scratched on notepaper. None of those seemed to consider the requested specifications or didn't bother offering any details. Those were quickly wadded and tossed by the HO. He felt they either weren't interested or didn't care enough to get the job.

The next estimate is from a reputable builder in our area and seems to have his ducks in a row for 109k. His was a verbal delivered over the phone and the next step is for the HO to call back with a decision.

Ours was delivered verbally in person. We were the only ones to have already checked with code enforcement on a couple of key issues and had answers for those points. (the other guy had the same answers but didn't check with CE) Our next step is a non refundable fee to take some site measurements so we can make our quote as accurate as we can. The fee will be appied as a payment to the contract if we are hired. After that we will supply a detailed written proposal to be delivered with the contract.

HO has already seen a sample propsal and has a blank contract from us, none from the others. His next step is to check the references on both of us and would like to see some of our past work. Other guy provided a few addresses, our sales guy offered a guided tour. (HO is from out of state, this is his camp)

To date I am pleased with our guys efforts and strategy. But this may be our first real competition in awhile, normally it's more like the first 4 that got trashed.

So the question is this, 2 reputable companies about 10% apart and you the higher one. What would your strategy be? Reverse auction is not acceptable. Thanks in advance.

Good Luck
Dave

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OK, rant if you must. For the love of Pete, use paragraphs and spell check.

Alwaysconfusd11

Why are you higher? Is it your overhead, or are you going above and beyond the other guy in materials, options and quality of service? Is the other company's work at the same level as yours? Exploit the difference that make your company better, and that make your end stand out more than the other guy.

Ayan Gonzalez

In the past I use to bid work. I have gotten to the point now that I don't have to compete for work anymore.

When I did bid work, one of the things that I used to do that was very successfull for me and was part of my company's mission statment was to educate the customer.

Give the custumer the information they need to make an informed disition.

Tell them where they can go to verify that everyone is licenced and insured.

Give them a copy of your license, insurance.

Go over your contract in detail with them.

Explain to them the importance of workers comp.

Explain how to best work with the draw scedule, how to set it up so that they are protected.

Explain to them the lein laws and how they apply to their project.

Explain to them the draw schedule, what they can expect.

Anything that you can do to educate the customer will eliminate the compation.

The client will appriciate the information and at least in my case more often then not will give you the job.

You will find that if you don't get the project after these efferts, more likely then not you will get a call sometime later asking for help in dealing with the other contractor.

Remember when dealing with the client to speek from your heart.

Contractor's often don't give clients the credit they should.

DavidC

Good ideas so far. Most of this stuff we already cover on the first visit. For ex., they already have our references and copies of our insurance certs. Licenses are not required here. On the first visit our guy was told that the others had big shoes to fill following him. He was on time, had a professional presention, asked pertainent questions, etc.

I'm far from the panic button on this one. The only other contender has made his play and now sits back and waits for an answer while we are still active in the process. And we will be taking him on a tour of some of our work while the other guy just gave a few addresses.

As I said, Mr. Customer is from out of state and doesn't know the area. How crazy would it be to offer to drive him to some of the other guys addresses?

We have 2 weeks before he comes up again. I'm fairly confident, but the sales have been easier lately. We haven't had much problem being the higher price normally. It's just that this time the other guy looks good.

Ayan,

How would you present the lein process in a positive and helpful manner to help close the sale?

Thanks again.

Good Luck
Dave

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OK, rant if you must. For the love of Pete, use paragraphs and spell check.

Carport King

Dave this must be exciting for you and your salesperson. I believe all you need to do is add value. Extend your warranty out 2-5 years. This shows the value of your work plus your client does not stay there full time.

Your lien law should be on your contract. Never hide the lien law have it printed and explain to your client it protects them as the homeowner and you the contractor.

The other big one is the draw schedule. Make sure your money is not ahead of your work. Do the work and get a draw, do the work get a draw this gives your client a comfort zone because most of the time it is the other way around.

Do not lower your price just pile on value. Get to know your client when they arrive and tell your company story and why you are the best contractor for there job.I would not show the other contractors work.

Because your client is out of town I would set up on your website where he can see progress pictures of his project.

One more thing you can do is to hire an outside inspection service to give reports to your client so they feel more comfortable and have no problem sending progress payments.

Putting the client in total relax mode and a warm and fuzzy feeling dealing with you and your company. Good luck let us know how it goes my money is on you!

Ayan Gonzalez

Mr. client,

One of the most important things you need to consider when selecting your contractor is how well he documents the job and verifies to you the payment process.

I am sure you have heard many horror stories about contractors hurting owners. I am here to tell you that most of them are true. This is because there was a lack of communication between the parties and too much trust on the Owner’s part.

We believe strongly in something said by one of our greatest presidents, Ronald Regan, “trust but verify”

We at Empire Construction, Inc., are willing to do whatever it takes not only to say what we are going to do, but do what we promise and earn your trust.

The first thing we will do is show you our numbers. Once you have signed a contract with use we will open our books to you should you like. We will show you what we have budgeted in our estimate for the different trades such as electrical, plumbing, roofing, ext. and we will also reveal to you what our fee is.

We will then give you the opportunity to agree with our selection of subcontractors or give you the opportunity to save any monies you think you can. If for example you should decide you would like to buy and install the carpet yourself, just let us know and we would be happy to reduce the amount budgeted in our estimate for carpeting less our fee.

Our fee will be the same for the entire project. It will only be changed if you decide to add something to the scope. If something is added to the scope, we will charge a modest fee to cover our expenses associated with the additional scope.

If for example you have a family member or friend that you would like to do part of the work, let’s say you have a friend that does cabinets for example, we will verify that persons credentials and ability. If we feel they meet our standards and we can work with them and prove to use that they have the proper licensing and insurances, we would be more than happy to help your friend out.

No one will be allowed on the project without having the proper insurances and license. If we do not agree with your selection of sub replacement, but they do have the proper licensing and insurance, we will ask you to sign a hold harmless letter relinquishing us of any respectability should the sub fail to produce or delay the project.

We have an open book policy with our clients once we sign the contract and receive the initial deposit.

Because you will be out of town, we have included in our estimate, that ability for you to see the progress on the site. We will do this in several ways.

Our supervisor carries with him a digital camera at all times. He will be documenting the construction process for our records on a weekly basis. Every Monday, he will be turning in to our office his daily reports and pictures.

Every Wednesday, our secretary in the office will mail, email or post on our web site, a copy of the prior week’s daily reports and some of the pictures so you can stay informed as to the progress of the job.

You will also have our supervisor’s cell number to communicate with him anything you like.

When the job begins you will from time to time, be receiving what are called notices to Owner. I have for you here one from another one of our jobs so you can see what they look like.

This is a notification that by law, the venders or subcontractors on the project can send you to inform you that they are working on your project.

By law, if you pay your contractor and do not receive from your contractor prior to paying them proof via a subcontractor’s release, here is a copy for you of what a release looks like, then the subcontractor if he is not paid by the contractor, has the right to file a lean on your property and force a foreclosure to collect his payment.

Even if you have paid the contractor in full.

We will provide you with not only a copy of the releases from our suppliers and venders, but also their contact information so you can verify payment. We are also willing to work with you and let you pay them directly should you like.

We will do whatever it takes to earn your trust and confidence.

DavidC

Ayan and Carport, thank you both for the insights. I should reiterate that we are not considering lowering our price at this point. I'm still confident that this dog will come home, but I am looking ahead and trying to cover possiblities. Be prepared as the scouts taught us.

Many of the points mentioned are covered. We have been told that we are the only ones to offer daily updates with photos via email, that we are the only ones to provide a reference list/insurance(copies)/contract & change order forms, etc..

The HO's next step is to check our references. Our guy was told that our highest price did not eliminate us because he will only do this once and will be careful about his selection. So many times our references have sold the job for us in the past.

As to why we are higher, I can't say. We are remodelers and the other guy a builder. It could be that simple. It could also be we are paying a commission and the cost of that. (works out remakably close) I only know that we figure it the way we see it and that is what we sell.

I've posted the exact same question on another forum and the best advice from there so far is to lower the price only as a last resort, and carefully if at all. Otherwise, identify the type of customer he is and sell to that style based on service and reputation.

I agree with that. There is no reason to assume that the highest price is not the best value.

As an aside, this is an exciting time for our whole team. Going from never using a sales rep to having someone whose sole focus is sales has increased our business measurably without increasing our lead costs. We have had to hire another carpenter and will be adding a helper shortly.

Thanks to all.

Good Luck
Dave

__________________
OK, rant if you must. For the love of Pete, use paragraphs and spell check.

Double-A

The only other thing I can add here is to be sure you are addressing all of your client's concerns and especially his fears. Do you know why, exactly, he is building this project? What are his expectations. Specifications will tell you what type of car or boat will fit in there, but says nothing about how important that car or boat is to the client.

By knowing why he is buying as well as what he is buying, you're sure to address his concerns and possibly, as one poster said above, add value by way of saying you can guarantee this project will meet with or exceed his dream expectations.

Most of the time we, as contractors are asked to give a client something built to some spec, but don't care what the real use for that project is, or what it really means. A bathroom remodel might need to have some features incorporated into, because a good friend of the family might use a wheelchair, or Aunt Mary might have just had hip replacement surgery and need some extra room to swing the junk in the trunk.

Meet those needs and guarantee that those needs are met and you will close the sale. Pretend they don't exist and you can bet your client is going to buy on price. There is nothing else for him to consider.

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"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

AskForTheSale

Quit dancing with him and
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Ask For The Sale so you will know what objections you need to overcome “if” there are any.

If there are none, he will give it to you.

Ask For The Sale and zip up the mouth.

MALCO.New.York

No need to "oversell". More jobs are lost due to this "Diarrhea of the Mouth" syndrome!

You have presented it. You have impressed.

__________________
Something to One may be Nothing to another!

Ultimate Wisdom---------
http://www.youtube.com/watch?v=_k1Ug...ture=rec-HM-r2

DavidC

Thanks to all who posted their valued opinion.

Our prospect had decided to go with us even though we were higher. Unfortunately before he called to notify us the other guy called him and offered an additional 10k off for signing right away and could start the next week. This put him at somewhere near 22k less and the HO couldn't resist.

I hope all goes well for the client, this is one game we won't play. As they say, one door closes and another opens. Our sales guy is working on other avenues and doesn't have time to worry much about it.

Good Luck
Dave

__________________
OK, rant if you must. For the love of Pete, use paragraphs and spell check.

Murphy Stout

That's a shame, but as I read this thread, I think you can be proud of how you handled the situation.
Good luck next time!