Bid To Close Rate?

InterlockPavers

Hi everybody:

I am a new member to this forum and new pretty much to the contractor world like 2 years exp.


Just curious to other members percent on bidding and closing the sale on average.

Thanks

bigchaz

Im in deck staining now and its usually sign three jobs for every 4 that I estimate on. Some people would say I need to raise prices, but Ill worry about that if i start getting too many jobs.

With pavers, I imagine you get a lot more price shoppers so youll be a lot lower

ProWallGuy

I'm at 25% right now for the year. Lot of shoppers, not many buyers.
Most of the time I come in at around 35%-40%.

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Wallpaper Hanger St. Louis
Digital Murals Installation

paintr56

Traditionally I like to close about one out of three. My closing rate gets much higher and I feel I am leaving money on the table much lower and I start to worry.

Jim Bunton

Grumpy

Showing up on time and sober should land you 1 out of 3. Having skills will increase that ratio.

Mike Finley

National averages for home improvement sales is 1 out of 4.

Your location, your abilities, your competition, your profession will skew that number up or down. Cold calling, selling to leads, selling to referrals will all have different ratios.

dougchips

I found that by asking several qualifing questions on the phone prior to setting an in home apt I can weed out some tire kickers and get around 40-50%. This process kills about 1/2 of my leads, but saves the time of selling to internet/e-bay shoppers.

20% or 1/2 of those fall into Grumpy's (on-time and sober), the type of customers who have their checkbooks on the table. The other 20% is luck or hopefully skill.

Grumpy

Doug do you ever worry that perhaps you are over qualifying and weeding out those who just might be buyers, or do you have more leads than you can handle so you over qualify on prupose?

dougchips

Grumpy, you are correct. I will pre-screen more when we are busy than when we are slow. When we are busy 9-10 months out of the year, I am picky--but always polite when I turn away a lead. When we are slow I will generally see lower quality leads or send one of my guys out so I am not there with a attitude that they will not buy. With a number rating system, I can generally connect the lead potential score to a closing rate. I hate to pre-judge a lead but I see results with this system. I am sending one of my project managers to sales training classes so we can take on more leads.

One of my examples of a low scoring lead that you can relate to is a lead from a lead generating service:

me, "How many quotes are you looking to get on this_______project?"

them, "we went to 5 websites and signed up to have contractors come over and look at our_____project, so about 15 quotes and we want the lowest price" This one realy happened and I went so I could train one of my guys on selling windows. The guy had 3 different window companies showing him windows every night for over 2 weeks! We went and tried to sell value. Every open ended question would get a one word answer. His only question.....whats the price.

I never will turn away someone because they are poor, they just need to be educated about their roi on using quality merchandise and a professional installation.

joasis

I don't actually track quotes to sales, but I guess it is 25%. For the time being, that is ok....if I actually see jobs go south, I try to find out why. In a small town, there will always be the buddy system, the dislike factor, and who you are married to. I have noticed that as my little company has grown, our radius of jobs increased to 40 miles or so, and we build homes also, the calls increased in my home town.

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Sonny Lykos

When I did remodeling, my closing rate was about 90%. My son's closing rate since '99 has been about 90% also.

The other guys are right, though. The national rate is closer to about 1 in 3.

Grumpy

Sonny when I hear guys bragging that they are getting over 50%. I know they are cherry picking and in my opinion over qualifying. Your cost per sale is probably a lot higher than mine because you probably burn through more leads because your qualifying is super strict. I bet I could close 90% also if I only ran referrals.

I've come to learn that closing ration doesn't mean squat anymore... what matters is earnings at the end of the year.

Sonny Lykos

Why is it that when I make a simple, yet true statement, that it's called bragging. If I came cross as bragging, I'm sorry.

I have branded myself. It's that simple. I do not try to obtain "leads" my leads are previous customers of which I have many repeats and referrals. And they call me. I don't solicit work from anyone.

I have not advertised since June of 1991. I moved here in Jan, 1991 and started advertising when I got my license in March of 1991. So I advertised for 3 months. I sold the business to my two sons in 1999 and son Tom will do several millions (about 7-8) this year, and he still does not advertise. His jobs are between about $300K to $1.3M and has done new condo penthouse build-outs for WCI.

The above are simple facts - not bragging.

Here's an email I received from the owner of a property management company of which I gave a price (via email) of between $1300 and $1500 for a small job for a condo association for which I've been doing their common element repair work for about 4 years:

"Thanks Sonny. You should schedule the repairs and I will let you know how to bill it after my meeting today. Don't forget my proposal to replace the insulation in the attics in bldg 5."

That insulation she's talking about is what blew out from Wilma along with many feet of their alum. soffit. They have 13 two storey condos with 8 units per bldg. Building 5 is the one the Pres. of the Board lives in and will be the 1st one to get new insulation in those missing areas. There are ten more bldgs. with missing insulation.

However, the concept of "branding" one's self has escaped the vast majority of our industry. And that's fine too.

I'm sorry I've bothered you and a few others here with my apparent arrogance. But not wanting to irritate anyone any more, I'll keep my mouth shut so you can continue with "leads"! I never did like "leads."

Grumpy

Well Yes Sonny it is bragging, and I am not challenging it. If I closed 90% I would be bragging also. I am in no way calling you a liar, because I know it is indeed possible under the right circumstances.

I was just making an opiniated statement that I "feel" those who close over 50% over qualify. I also said if I worked only referrals I could also close at about the same ratio as well. In my business I don't think it's possible to work ONLY referrals though. Maybe it is possible, I just don't see a way.

You can't tell me that you started without at least one lead before your gravy train of referrals came flooding in. Infact you admittied you had to advertise to get started. While I do know in some business structures, primarily those contractors who are on jobs a longer period of time and require less sales, due to larger tickets per sale... I know it could never pull it off with my current business setup, because each job we did, that person would at least have to referr us to one person, and we'd have to close at 100%. That just doesn't happen.

So that's the problem. You do build outs and are on a job for weeks/months, where as I NEED leads because I am on a job for a few days max, but usually only 1 day. You are talking from your perspective and I from mine.

I too have a few customers who just send me prints and ask when I can start, they no longer even ask for prices, though I always ask them to sign a proposal before I start work just to cover my own ass. That just comes with doing a good job and earning someones trust, and most importantly with time. Hell If I had 40 customers like that I could stop advertising and fire all my salesmen.

Mike Finley

You just have to qualify your answers is all Sonny. When the discussion is talking about advertising generated leads and your throw in an answer that is related to repeat & referal leads everybody still assumes you are talking about advertising generated leads and crys bullsh!t.

Everybody knows repeats close astronomically high. 90% would be about right. Referrals close high too but no where near repeats. Jobs from repeats are basically yours to lose, there is little closing even to consider.