How Many Sales Are You Throwing Away?

pcplumber

I believe the average contractor is throwing up to 50% of his leads away, is costing himself to lose up to 50% of his gross sales, and he does not even know he is doing this.

I would appreciate your input, only if you agree, of course, because I am writing about this in my manual.

CONTRACTORS LOSE 70% OF THEIR LEADS

Every request, for any type of service, is a potential sale.

For every 100 leads, a contractors gets, he throws away 70 leads, he did not even think were leads. This is just an educated guess:

Contractors lose up to 50% of their annual gross sales.

Every request for service is a potential sale. Every customer who calls, every time your phone rings, and regardless of what a customer asks for, is a potential sale. Do not tell customers you do not provide a specific service, regardless of the service requested, even when you know you do not provide the service, requested.

A customer calls, and asks if we install roofs. I hate installing roofs, but, instead of turning customer away, say:

"Yes, I know some really great roofers. But, first, before I recommend, one of my roofers, I would like to see what you want to do."

Rather than giving your customer a referral number, make the initial visit, to the customer's home, and see what you can sell, for yourself, first.

I believe the average contractor is throwing up to 50% of his leads away, is costing himself to lose up to 50% of his gross sales, and he does not even know he is doing this.

This is only a tiny version of how contractors throw away business, every day. This is a two-part problem. The first part is; we are judgmental.

The second part is; we blow off every customer, who asks for a service, we don't provide.

Customer: Do you replace faucets washers.

Other Plumber: No. (Plumber is thinking there is not a great profit for tinkering with a faucet, he doesn't have the time for something this trivial, or a hundred other reasons.).

Bestline: Yes, we will come and look at your faucet. (We know we are not going to make any profit, but we know there is a possibility that we can call something really big).



Customer: Do you repair electric wires.

Bestline: Yes, we know some really great electricians, but first we will be glad to come see exactly what you need, and we will recommend the best man for your job.

Again, this gets us in the door, and we find many opportunities to sell something really big.

Customer: Do you know anybody who installs concrete driveways?

Bestline: Yes, we know several concrete men, but, first, we would be glad to go to your home, to see exactly what you want to do, so we know which of our guys to refer.

Of course, when we arrive, we find the customer is installing a new driveway over a 70 year-old clay sewer pipe and galvanized water main, and maybe they even need new copper pipes in the home, and new drain pipes.

When many of your customers call, they are on a spending-spree, they ask you if you perform a service, and this is not the time to say, 'no'. You don't want give them another contractor's phone number, and lose all the additional sales.

Take every call and go to every customer's home, for everything. Unless you have crystal balls you will never know what can sell. We have customers we thought we sold everything to, and we still sell them more, or we sell something to their friends, neighbors, or relatives.

Just showing your face for a friendly visit is the best PR work you can do. Visiting a customer, when you are not trying to sell something makes you unique and a person your customer can rely on for future advice and service.

Being judgmental causes the greatest loss of sales. It is possible to write no less than 1,000 reasons why being judgmental causes us to lose sales, and these are only a few reasons.

The customer told me he had no money, so I figure, why I waste my time? Many customers lie, and tell you they don't have money, so you will be kind to them. In fact, customers who have a lot of money are the customers who tell you they don't.

I used to clean drains for $10. A customer called, told me she had no money, and was happy to see we charge only $10. I knew this customer was not telling the truth. So, I went to her home, found her home flooded underneath with waste water, quoted a price for $6,000, she immediately accepted my proposal, and she paid me with green cash. Had I been judgmental, I would have lost a $6,000 sale.

The customer sounds cheap. You did work for a specific race (Pakistani, Korean, etc) and had a bad experience. So, you don't deal with these races any more. Different races have some strange cultural differences, but many of them are loaded. They just take a lot more patience, and when you get in good with one, they will refer you to their whole tribe. We do a lot of business with the strange races because we are kind, patient, understanding, and because many other contractors won't. Perhaps, this makes these races more prone to continue doing business with us.

When a customer calls, for anything and everything, don't give an excuse why you won't go. Look for excuses to go to the customer's home. I am a plumbing contractor and will go to a customer's home to screw in a light bulb. When the customer needs something big, who are they going to call? You may not make big money the first time, but the customer remembers and you will be the first contractor they call.

Many customers put on a false front, or face, to make you think they are educated and tough. I do this to everyone I meet, during a business deal, and when hiring employees. Rather than making believe I am easy (and I am) I make believe I am cheap and tough, to get you on your toes. So, you either perform well, or hit the road, without a cue. This is what many customers do, but many contractors don't understand, or fear the customer, so they blow the customer off and blow up a great sale. As a customer, we do this because we have been scarred by many bad deals with every type of business transaction.

The customer is rude when he called for service. This is often a false front. Regardless, you are not willing to chance losing several thousand dollars because you don't like the way the customer talked to you on the phone. You must go to every customer's job to find out if they are really rude, or not.

Your customer calls tells you he wants an estimate, he is only shopping, he has no money, he is not going to do the work, and he only wants opinions and ideas. He may even tell you he is not the owner of the home. This customer may be putting on a false front about everything, or he may be telling the truth. So, you have the opportunity to make two poor judgments. Maybe the customer is not telling the truth, and as the greatest salesman, in the world, you could go to this job and convince the customer he has the money, and the urgency to do the job, immediately. You take my advice and sell a job for $30,000.

GOOD COP - BAD COP This is not done on purpose, but it happens. A customer calls, and you get into an argument, on the phone. The argument gets to the point that you say things you should have said. The customer slams down the phone and is furious. You have another employee call the customer and apologize. Your employee pays a visit to the customer's home and the customer is yapping about the rude encounter with your company. At the same time, the customer is bonding with the good cop, and a sale you would have lost is simple to close, for another $30,000.

Your New Years resolution could be to figure out how much money you are blowing up by turning away calls you could turn into huge sales. Your resolution can be to have a positive and optimistic attitude for every customer who calls, regardless of the type of service your customer requests.

dougchips

If you consider a lead; a phone call or e-mail request for services---I throw out 70% (rough figures)

If you consider a lead: a phone call or e-mail request for services that I actually provide---I throw out a much smaller percentage

I get a bunch of calls for glass repair (IGU's) that I am not set up to run. Hopefully I can build a two-way relationship with a glass repair shop. We also get a good amount of DIY people looking for cheaper windows than the home centers, I'm not interested in those headaches regardless of profit.

__________________
To get the best replacement windows, or sun rooms contact the replacement windows experts at FHI Vinyl Window Company.

pcplumber

Do you limit yourself to only windows and are there enough jobs? Almost 100% of our plumbing jobs were copper repipes from 1973 until 1989. Eventually, the repipes dried up. Fortunately, we had several more services to offer. Will your window business dry up? Replacing windows does not have the same urgency as plumbing, roofing, and electric when the economy is bad. Did you ever consider any of these trades?

dougchips

I've been debating about shaking the dust off of the Company name that I have not used much since we began focusing on Windows a few years ago. Originally I went by Faust Home Improvements and cut it down to FHI Windows.

We use to do a bunch of tiling, bathrooms, general home repairs, termite damage---all sorts of stuff. I was thinking after the holidays of sending out letters & calling our past clients with "did you know we also offer"..... I'm also in the process of networking with other companies that offer services that I don't offer so we can exchange leads. So far I pretty much have all the trades covered with trades people that I've known for years.

Last year I started selling my out of area window leads. This year I want to be able to sell or trade every lead that comes my way. Even if I end up giving a plumber 10 leads for every one that he gives me--maybe the roofer will give me 10 leads for every one that I give him.

__________________
To get the best replacement windows, or sun rooms contact the replacement windows experts at FHI Vinyl Window Company.

RizzoMaryland

Sounds to me like you are encouraging everyone, who may or may not be qualified or experienced, to act as a general contractor. Oversee and sub out while trying to find something to make a buck on yourself. This is what most good business people do, however not everyone has the managing qualities to do so.

__________________
"An idea is salvation by imagination"
Frank LLoyd Wright

fez-head

We are evolving into a one stop shop for ALL smaller projects - be it electrical, plumbing, HVAC, janitorial cleaning, roofing, welding and fabrication etc. etc. etc.

For a small percentage of the total job we hire and supervise reputable contractors that fit our mold and make sure the work is done well and at a fair price. Our motto is "Making Your Life a Lot Less Complicated" and that is exactly what we do.

pcplumber

That was not my intention. I would never bid a job for another contractor The only thing, I mention, in the first post, is when you receive a call, for a service, you do not perform, at least, go and look at the job, to see if you can assist the customer, with a referral, and see if there is a service you can sell, for your company.

Sell something, or not, we leave the customer with two thick plastic business cards, four 5 x 7 magnet calendars, and a dozen ink pens. We put the customer on our mailing list, and send the customer a credit card, approved for $2500, that can be used at our company.

The reason for this thread is because I wanted to see if contractors think they are turning away about 50% of their annual sales. Perhaps, a person who does only windows is not, because they don't have a variety of services, to offer. But, I think many contractors are throwing away more than 50%, and I believe my company has thrown away more than that. I think every contractor should really ask this question, before being so anxious, to hang up the phone, and to blow up sales.

mdshunk

I've always approached every lead with the mindset, "they've already bought something from me, they just don't know it yet".

fez-head

Please tell me more about this credit card. Are you using a finance company or doing the financing in house. Who prints the credit cards for you if you are doing it in house and how are you keeping track?

People (I) will usually pay more to a company that will bill them later......this is how Dell got me by the balls.......they gave me $10,000 in business credit. I only used $1,000 worth but it was enough that I used them instead of having a computer built for less money locally. The buy now pay later mentality - Good or Bad it does work.

Thanks,
Jesse

pcplumber

That is the perfect attitude when your customer requests a service you perform. What do you tell people on the phone, for the services they request, and you do not perform. Do you try to turn every telephone call into a lead, even if you don't provide the service the customer requests, and do you take leads for tiny jobs, hoping you can sell something big that is not related to the initial request.

What else could I be doing on New Year's eve.

Happy New Years!!!

pcplumber

http://bestlineplumbing.com/BusinessManual.htm

We give credit to about 30% of our customers, and we get enough money down, so we still make a profit, on 99% of the jobs. The cash flowing in, every day of the month is terrific. Its like owning your own slot machine. I put our financing information in this manual on page 40.

Thank you for asking.

fez-head

Good stuff - thank you. Are you using an actual plastic credit card and if so who is printing it for you?


Thanks

pcplumber

We purchased a machine that prints the credit cards and it cost about $5,000. At first, I wanted to buy a machine that prints the raised numbers like a Visa card, but the machine cost $20,000, so I settled for the flat card. I am happy that we use the flat card because I think it looks beautiful.

The printer does very high quality full-color printing on both sides of the card. I think you can get a company to print the cards for you, for about $1, without having to buy the machine. We pay about 25 cents for each card, and I think the ribbon, to print each card, costs about 25 cents. Then, you have the cost for the letter, attached, envelope, etc. The Customer List Database was designed to manage the Credit Card Advertising Campaign. The Customer list will export your list to the credit card machine, or outside source, and it prints letters personalized with the customer's name and address.

I can't remember if I mentioned this in the manual. We use the customer's property assessor identification number for their credit card number. In California, this a 10 digit number. By using this number, our Customer List Database does not allow us to send a duplicate cards to the same address.

You do not need a credit cards to offer your customers credit. Just put the words 'INSTANT CREDIT - NO INTEREST' on your advertising. Every customer knows they have to make a down payment, and ask for up to 70% down.

We only send credit cards only to our previous customers. The purpose for the credit card is to make your customers feel important and I can't think of the right words, but it is like belonging to your company, or they are a part of your company. It is like, 'yes, I'm so important, as a customer, Bestline even sent ME a credit card." I don't know how yo describe it, but I can feel them sticking their chest out when they call for service.

Go to page 40 and page 60 for information about the credit cards, the machine, and printing plastic business cards.

http://bestlineplumbing.com/BusinessManual.htm

Aways hit your Refresh Button after opening this link, or you will get the old manual links with an error message, inside this web page.

MarkNoV

Deleted.

Mark

fez-head

I understand completely. We have had the same reaction from clients turning in the gift cards we sent out in the Christmass cards. http://www.contractortalk.com/f12/lo...t-cards-48470/ We sent out 807 gift cards total about 2 weeks ago and so far we got 3 thank you notes and 2 project requests in.

One lady yesterday found a gift card on the floor at her office and called in to try and return it to its rightful owner. Those are working out much better than any other coupon or special offer so far.

mdshunk

Plainly put, no. Why? It's a matter of not enough time. I stay as busy as I need to be just from the people who want stuff I do. If I wasn't as busy as I needed to be, I sure would. "You want chocolate or vanilla? Vanilla; well, I only do chocolate, but I think I can get you a vanilla."

Ivinni

I'll give you an anecdote on what it is worth to keep an open mind when a customer needs a service you don't perform "at the time":

We did well starting out in residential insulation and quickly moved into hotels and apartment complexes.

I "fell" into a meeting with a potential customer who drywalled about 35 complexes a year, all over the country. He was a very busy guy and hard to contact and we had been introduced by a mutual supplier.

At a lunch meeting one day, while talking over the possibility of subbing his insulation in these jobs (the GC's wanted him to handle firestop, insulation, drywall and paint for ease of contracts and to limit the number of people they had to deal with), he asked us if we knew what firestopping was and could be handle the work load.

In my infinite 26 year old wisdom, I stated respectfully that we didn't do that kind of work.

I didn't get the insulation or the firestopping then.

The I figured out that a three hundred unit unit complex was worth about $75K with a GREAT margine (35% range)

75K for the firestop,

150K for the insulation,

multiplied by 35 complexes,


over $7M.

Yeah, I was really smart.

"I don't do that" hasn't been in my vocabulary since

__________________
its not going to get better with straps, or new footings or even aroma therapy.

Dale S.

Regarding giving credit to some customers, have you changed this practice based on the current economic situation? Are you seeing more instances of bad repayment timeframes? I mean are people hanging you out to dry more by not repaying?

I have thought of doing this, but frankly don't have the nerve.

dale

pcplumber

I would like to say thank you for the input. This is a really great forum for learning and sharing ideas. Even though, it may appear that I talk too much, I also read almost every post, article, and I learned a lot. I am implementing many ideas I got from this forum.

Let's break some records in 2009, starting tomorrow! Then, let's retire while we're young enough.

Thank you very much.

Grumpy

According to my 2008 data, 65% of the people who contacted us for an estimate (estimate requests) never got one. There are many reasons for this, but that's bad. Also according to my data our company closing ratio is 32% of the estimates written.

Your job is alittle different from a roofer. Everyone wants a price first, where as most MEP contractors charge for estimtes... so why should this be any different?

"Yes Mrs. Customer, we can fix that faucet we will do it for time and material at a rate of $80 per man hour, with a minimum charge of $225. When should I schedule one of my technicians to come over to your property?"


If they say no, so be it. If they say yes, I think $225 to repalce some washers is a good profit for an hour worth of work.