Well That Was Fun!

J-Peffer

I'm out doing my estimates today, had a few calls as the spring weather just started.

The first estimate was a referral, I did the neighbors roof in April of 2008.

They explained, you did the *****'s roof, they said you did a great job, were done in 2 days and the clean up was perfect.

These are the type of referrals I like, normally I'm not even competing with anyone else on the bid.

So I figure the estimate, just as normal. I propose the method, products we use, and price to the customer and they were shocked it cost 1,600 more than their neighbors roof. 4300 vs. 5900.

I explained to them about the increase in prices for materials, and that I'm even charging LESS labor to do the job.

I asked them to call some shingle distributors and ask about what the prices have done over the last year.

So getting home, I paid $33 a square for the shingles in April of 2008 from Lowes. Normally they would be 45 then, but they gave me a really good price because they keep trying to get me to buy there.

I'm paying $92 a square today for Landmarks. The price has close to tripled.

I made sure they knew, with the new stimulus packages being pushed through, calling for a lot of road construction, that the price of asphalt is only going to go up.

I'm hoping I get the job, but It's frustrating because this is a job I would normally walk out with a down payment and a contract in 15 minutes. Now it's going to take some work to close.

buildpinnacle

You mentioned spring weather. If its an insurance claim, then the carriers are running pretty close with market right now. The ones who aren't can easily be swayed when shown the 2" thick stack of letters from all the majors every month for the past year announcing more price increases. Why do they care what your bid is (if insurance monies) They only get what they spend up to the approved amount, unless they commit insurance fraud.

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J-Peffer

It's not insurance work, just a 19 year old roof with 2 layers of shingles on it.

They asked if it "NEEDED" to be replaced. I told them, it might make it through the summer, but it comes down to risk management. They would run the risk of having to pay for a repair, if a company could not replace when it starts to leak.

I also said with the price of current roofing, the demand for asphalt, and the current stimulus packages calling for a lot of road construction, prices will only go up so the sooner they have the work done, the cheaper it can be done.

I gave them a 10% discount to book the work with in the next 2 weeks to avoid it tangling with the left over bookings from last year.

I suggested getting other bids, I'm comfortable with my price. I hate to walk away from a job like that, but when they realize you can't roof a house in april of 2009 for the prices you could in 2008, I'm hoping to hear back from them.

Will follow up with them Monday morning.

outlaw

[quote=J

I suggested getting other bids, I'm comfortable with my price. I hate to walk away from a job like that, but when they realize you can't roof a house in april of 2009 for the prices you could in 2008, I'm hoping to hear back from them.

Will follow up with them Monday morning.[/quote]


I would never suggest that they get other bids. If they want to than that is their choice. I just wouldn't suggest it.

jcalvin

I like it when I have to compete for a job. I like it more when I win them. I look at it like exercise. I try to get some feedback from the owners if I win or loose. It is always interesting to see how your price stacks up against the competition. The only bad thing that can come out of the feedback is when the HO looks at you and says, "I hired you because you were 20% lower than the closest bid"

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Cal


You hired WHO

buildpinnacle

I put on a roof system out here that there is absolutely no comparison to with my competition. I also offer a 10 year warranty with the system so I have to do all the 'extra' stuff so I know it won't leak. Most of you guys especially in the NE and FL etc are doing the 5 part systems as standard practice. In Texas, most contractors tear off the shingles, leave the felt, add some 15#, 3 tabs, auto caulk boots and re-use all turbines, etc. We put ice/water in all valleys, abuttments, eaves, rakes, penetrations, valley metal over the ice/water, do a full ventilation assesment, use only synthetic felts, replace all appurtenences, re-flash all chimenys and walls, etc, etc. etc. All the stuff you should do and most of you probably have to do to meet code in your areas. Texas is notorious for 'slap it on' roofing.

That being said, storm or not, I am usually well at the top of the price range. I simply ask them to white out the competitors name and price and sit down with me so we can go over the apples and the oranges. Being 20-30% higher is an easy obstacle to overcome when you show them what they are getting and why the other roof systems don't compare. Sell your company, expertise, product, workmanship, reputation.....everything except for price. You can use a term we call 'shaming' them into feeling ashamed that they would even consider a cheap lessor roof on their most expensive asset. It doesn't make sense.

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J-Peffer

My price is not always the highest, I normally fall right in the middle. I'm not trying to get rich from one job, but looking to stay in business, make a living and establish my company more.

I agree with everything you say too. I make sure my customer knows what products we use, not only that, I make sure to get that product in their hand....and the product other company's use.

I bring pictures of similar roofs, before and afters. I go over flashing techniques and show them what their roof will look like when it's done.

I try not to take up too much time, but I make sure they know the process from start to finish.

Most of the contractors and company's I compete against in the area, simply sub the work out to subs. This allows my prices to often beat theirs as I'm not trying to make my cut...and them make theirs too.

outlaw

Most of the companies that I compete against use subs too. This allows them to be much cheaper than me.

When you are paying legitimate employees by the hour with all the labor burden and overhead that comes with it, it costs alot more than just paying a sub X amount of dollars per sq.

I am almost always 30% higher than the other bids. Average roof job for me is 10k-12K. They already have gotten prices for 5-8k.

Most of the guys around here are just like Pinnacle's competition. No ice&water, no new felt, re-use the flashing. Some home owners care, alot don't.

buildpinnacle

Whether it's a burnout, hail damage, tree on house, or just plain upgrades, the second I feel the owner is shopping based COMPLETELY on price, I blow up the deal. These types of customers bring on worse headaches later down the road. There are companies who would like to make $500 per copy on 7 jobs for $3500. They acutally think this is a business strategy. Personally, I'd rather do 1 for that same money and spend the rest of my time finding one more. If I'm going to be broke, I'm going to be rested.

Sales guru's will drive closing percentages into our heads that we should be closing 4 of 10, or 6 of 10. We need to spend the majority of our time making certain we are selling adequate amounts of work to meet our budget requirements at our designated margins. The only number that matters is how much you have in the bank at the end of each year. By owning your own business, you should personally be making a very comfortable living...or more, and your business should be making money as well. Otherwise, you can go to work for another roofing company as a straight commission salesman, make more money with no headaches.

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J-Peffer

I could make more working for another company, strait percentage of the sale.

I love what I do though, I have always done really good in sales. I've went through a lot of training, and it was all obvious.

I met with the vice president of sales from CertainTeed a few years back and he explained to me, a sales man that has to be trained, is trained to mimic the traits of a person who loves what they do, appreciates what they sell, feels good about what they sell and the price.

Everything comes into play with the physiology of it, your smile, your appearance, your body language, the repor with the customer. It's all stuff a lot of us have, simply because we love our work, want to do a great job, and want to treat our customers fair.

Sales men, are trying to close, to make that percent, they have to think about all this, and pitch the sale, to us....it's just natural.

buildpinnacle

Very well said, JPeffer

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marc

How many sq. does $5900 pay for?

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Marc

Walason

I agree 100% with Buildprin... Quality is the route I have taken, and it has paid off very well. I do 90 % commercial coatings, but for years installed shingles full time. If a prospective customer got too far off the quality issues, I lost interest. Right from the get go, before I even inspect a roof they get several written references from my company along with an intro letter, which sets me way apart from our competition. I used the yellow pages once, and will NEVER again. If someone calls and says something like "so and so roofing will do it for x-amount, can u beat that ?", I call them back and politely decline giving some reason we can't help them, along with a follow up thank you form letter.

Talking right from he get go about quality, our experience, no subs, our relationship with our suppliers (the owner of our main supplier is on speed dial), and I tell potential customers, "we are not always the least expensive, but here's what we do for our customers...", or "this is what you can expect from us" (and how we are different and more professional than our competition.) In my community, we have one contractor who has three locations, who makes us money by slapping shingles on and when customers don't get call backs when the roof leaks, we do. And sometimes, we get more work than he did, because it's a third layer so it becomes a tear off if it can't be repaired.

Also, if you solicit or move your business prospecting towards "higher end" customers; the ones that want or insist on quality, those customers don't mind paying more (and almost always have more money than the "cost/price" customers.) More work both upfront, and through the installation, but higher profit margin thereby allowing you the installer/company to not have to rush the job. It 's a circle.

Hope this helps. kirkloc@gamil.com

outlaw

J-Peffer. Help me understand. You can make more money selling for someone else?

Then why don't you?

I don't mean to offend. I am just fustrated because I have a very hard time getting a fair price for my work in this area.

PA woodbutcher

When working up a price on a shingled roof, I give them 3 prices. 1 that would probably qualify for your "slap it on" roofing that meets all local codes. 1 for a roof with all the bells and whistles including aluminum over the I&W in the valley, I&W and starters up the rakes and a 40 year roof. I have yet to sell a cheap roof. Most go for the upgrade with a few opting for the 40 year.

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'The trouble with our liberal friends is not that they're ignorant; it's just that they know so much that isn't so.' - Ronald Reagan

J-Peffer

If I was working for someone else, I may not be so enthusiastic about what I'm selling.

They may not use the same methods I use, the same materails, and if they are hiring me....just to make sales....they are probably running a business in a way that the dollar means more than the work/business.

Could I fake it and make a good living? Could I go out and canvas area's and get a few solid leads a day? I certainly feel I could. But I would go home hanging my head.

As it is now, I'm excited to answer the phone. I'm excited to drive over to meet the person inquiring upon the work in the next hour, and I'll have a thank you card in the mail box on the way out of the door. This is not work to me, I love what I do.

If I did this for someone else, I would probably not feel the same way. For me, it does not come down to just money. But when I drive around, you would all be annoyed driving with me....I did that roof, we repaired that roof, "So and So" messed up the flashing there....we fixed it, See those windows? Wonder who put those in!?

outlaw

J=Peffer, You take pride in what you do and I can appreciate that.

However, when you say things like "I could make more money working for some one else" and things like my price is usaully in the middle, it makes me wonder if you are getting the full value of your hard work and dedication.

If you are one of the best in your market, than should you charge accordingly?