All The Pre-qualifying In The World Doesnt Mean Squat!

cdac

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Tom R

NEXT!!

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RobertCDF

I had a guy last year that was really excited about his plan for his deck and talking about the refi he was going to do to do all the work around the house. I thought he was good to go! SWEET BIG JOB. 1,200 SQ FT Composite, Stucco coulumns, Glass balusters, Dry below, Angles, Stairs, and tear out and dispose of 500 SQ Ft of decking. Took a long time putting bid together... somewere around $40,000 called the guy and started talking to him and asked what the number was before we would get together just so he could know... I told him his response... I was thinking around $11,000 I asked well what is the most important thing to you and I will see what I can do. He says: size, composite, stucco, angles, stairs. The only thing he dropped was the glass balusters. I am like there is nothing I can do like that for that price range. I was so mad I wanted to send him a bill for such a complex estiamte. I thought I would get that one for sure. He was so excited saw some pics of my work and LOVED it loved the composite everything. People make me so mad sometimes.

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Robert Shaw
Colorado Springs Custom Decks
Colorado Custom Decks
Custom Composite Decks

Tom R

Sounds like you guys ought to be throwing out some 'ball-park' square footage numbers and catchin' their reaction before spending any real time. Some of these people are just nuts!!

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Spectatorz

I know the story very well.

There are alot of people that expect these types of work to get done for around $5.00 - $10.00 an hour for labor, with no concept of material costs.
Where do they get these ideas ??? I hate when that happens.

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Greg Di

You guys are NUTS for spending any sort of time on an estimate for a project that elaborate...especially a deck, where every HO thinks they are easy projects. I looked at at a 1700 square foot wraparound deck last season. The topography went from 9 feet to 6 inches off grade. Everything was diagonal. Site access was terrible. The existing 1700 sf deck had to be demoed and removed too. I told the guy AT LEAST $30k without pulling out a tape. He thought I was crazy and that there was no way it could cost more than $8000 "and that's being generous".

Most HOs have NO CONCEPT of what composite decking materials (or the railings) cost, let alone a PT 2x4.

I tell them right off the bat that a composite deck is DOUBLE the cost of a wood deck. Because it is. If that's news to them, then my appointment is over. My favorite is when they call me and say right away that they want Trex. I ask if they've been to a lumberyard to check out a variety of composite products other than Trex, and they usually say no. I have samples of nearly everything worth installing so I really don't care, but it tells me right away that they have NO idea about composite decking and I'm going to have to educate them. That's good and bad, but when they don't even have a rough idea of what the project will cost, I know I'm wasting a trip.

It is relatively easy to calculate two things before you even leave for an appointment:

1) cost per linear foot of composite rail (per brand)
2) cost per square foot of composite decking (per brand)

Knowing this, you can shoot an accurate ballpark figure out quickly. Most people do not consider building a deck to be a major project. They want one, but want it for as little as possible.

I can't compete with some hack that's buying veranda boards at HD and nailing the whole thing down. I don't want to.

cdac

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cdac

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Mike Finley

I don't understand why do you guys burn customers? I just don't get it. Is he going to be able to have the deck he talked to you about built for $10,000? We all know the answer is no. Then why would you pack up your sh#1 and storm out? We also know he is going to call another deck builder and another until he is finally convinced he can't build that deck for $10,000. At that point one of three things is going to have to happen:

1) The customer either bumps up his budget.
2) The customer will have to compromise on his design or materials.
3) Doesn't build the deck at all.

Eventually, sooner or later, it's almost always going to be 1 or 2 and that means somebody is going to be awarded the job. If you're the guy who politely educated the customer to what he actually could get for $10,000, $15,000 and $23,000 you're probably standing a good chance of building something. One of the first things I learned in sales is to leave the ego home. Concentrate on helping customers get what they want. Solve their problems, find them solutions and you get handsomely rewarded.

Tom R

Oh, - - the HUMANITY!!

I know what you're saying is probably right, but . . .

Leave the EGO home??

Oh, - - the HUMANITY!!

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Patty

..........and the Award for Diplomacy goes to..........


MKE FINLEY!!!!!!!!!!!!!!!!!!!!


I WANNA BE LIKE MIKE!

mdshunk

From my college days, where I sold air quality control equipment (tough sell), I learned to never, ever attempt to prequalify or prejudge a customer. The one's you think will never bite in a million years whip out the checkbook, and the one's you think are a lay down will offer up objections until the cows come home.

Sales is all about ratios. My present closing ratio (if there is such a thing, because I don't try too hard to close the sale; I'm busy enough) is 70%. That's about 2 sold out of every 3 estimates/presentations given. That means, historically, that I must give an estimate to that one person out of every three in order to sell the other two. I'm not sure if that's clear or not, but think about it for a minute. You should thank the person that does't buy (in your head only), because that gets them out of the way for the next two who will.

Keep giving sales presentations, work on your closing skills, and don't take the non buyers too personally. It's all about the numbers. Keep giving presentations, regardless of who it is, even if you suck at it, and you'll continue to sell work. You simply can't fail if you're continually in front of new perspective customers.

Bob Kovacs

You missed #4, Mike- Get some local jackleg who got laid off from the GM plant to agree to do it for $10k, show up, spend a week butchering good lumber, get red-tagged by the building inspector, and skip town with the $8,000 downpayment that he took.

I hate to say it, but there are some customers who will NEVER give in- they won't raise their budget, they won't compromise on materials- they'll find someone, somewhere to take the job at $10k, and sit back and say "I showed that Mike Finley- him and his $35,000 price- what kind of an idiot does he think I am???".

Of course, a simple "do you have a budget in mind for the project?" during the pre-qual stage, followed by a "from what you've mentioned, this sounds like around a $30,000 project" could have avoided all of this wasted time in the first place.

Bob

Greg Di

THANK YOU!

Mike Finley

Bob you are correct but that doesn't change a thing, I'm not sure by your post if you think it does or you are just elborating, but I'll give you two illustrations.

#1 If you would go back and take a look at all the customers who you blew off over the years you are going to find:

a - Some of them have done nothing
b - Some of them hired a jackleg
c - Some of them did the work themselves
d - Some of them built a compromise and hired your competition to do it
e - Some of them built exactly what they described to you and paid exactly what you said it would cost them and hired your competition to do it
f - and finally some of them actually spent even more than what you told them it would cost and built even more, and hired your competition to do it

If it's me, I don't worry about the customers who did a,b,c. I would be thinking about what the hell happened with customers who did d, e and f and how did I talk myself out of those job and how did my competors talk their way into them?

#2: Another way to understand it

If you hired a full time salesman, how long would he be employed if he was buring your leads turning them into D,E and F situations? How long would you listen to his excuses about "That customer was out of his mind." or "That customer was unrealistic" or "That customer was a jack-off!" You would be foolish to empower him to decide who can buy and who can't, who is serious and who isn't, who is realistic and who isn't.

I'm sure almost everyone can recognize that it would be fool hardy to let your hired sales person pick and choose who he is going to sell to. So why when it's time for you to put on your salesman's hat should be picking and choosing who is a buyer and who isn't? Why would you short-cut the sales presentation and estimate process?

The only thing that separates it all is that being an owner who has to sell, buy materials, estimate, install, do the books and everything else that comes along with it is that we get lazy. It's understandable, but you're taking money right out of your pocket every time you do it. Consistant selling is only about consistant presentations and following a consistant system.

Salesman A - pre-qualifies, he picks and chooses who can buy and who can't, who is serious and who isn't.

Salesman B - Does the same thing for every customer, start to finish, he does everything he can to leave the customer with the chance to purchase from him later if he doesn't close the sale that day.

Salesman B will out sell Salesman A day-in, day-out, week-in, week-out.

"Get Stupid" - in sales it means when you are hitting a dry spell, when everybody you talk to is telling you no and you can't figure out why, go back to the basics. Stop being so smart, stop out-smarting yourself. Get stupid and just go back to basics. Every salesman goes through that cycle, they get stupid again and suddenly everybody is saying yes to them.

Mike Finley

So Greg is it safe to say that you believe out of the customers you do estimates for that don't automatically know the costs of construction and well as we do that the vast majority of them end up highering some loser who either screws them or does a sub-standard job?

Greg Di

Yep.

I work in one of THE most affluent areas of the country. I also LIVE in one of the most affluent areas of the country. When someone calls me up to remodel a bathroom in an upscale neighborhood, with two BMWs in the driveway, a full-time nanny, a shore house, a plasma in every room, etc...they should not be suprised to hear that to do a BASIC 5x7 bathroom runs about $15k when all is said and done. The plumber needs to get paid (he lives here too). The sparky needs to get paid (he lives here too). The demo guy needs to get paid (he lives here too). The tile guy needs to get paid (he lives here too). The fixture/tile store needs to get paid (they pay rent here). Etc...

It boils my blood to deal with people who have money oozing out of their orifices and they want to haggle with me so that I can pay the bills. It's not that I'm gouging them at all, it's that they want to screw everyone along the way so they can impress their neighbors.

I am not going to shortchange myself or my family to take a job on that is not profitable because someone who can afford to pay refuses to. I'd rather sit home than risk injury on a jobsite to work for anything less than what I need to earn. Why should we be any different than a doctor. Did you ever try to haggle with your doctor? You wouldn't think about it.

My ego is not big. I am just a proud guy who refuses to be disrespected. I sell entirely based on service, not on price.

Also, my time is valuable, and as nice a guy as I am, I see no point in wasting time with people who have champaign tastes and a beer budget. Frankly, I don't want to spend hours back and forth with a customer to turn a $20k job (done right) into some half-assed Trading Spaces $5000 project that's going to be a pain. To quote Maverick, I am in a "target-rich environment". I would rather work less and charge more than work more and charge less. Make sense?

Mike, you come from a sales background (I think I read you even used to sell cars at one time). I wish I had your motivation or savvy to play let's make a deal all the time with every lead I get. I tell ya, if we were closer, I'd be talking to you about teaming up!

Bob Kovacs

Mike-

I've got to agree with Greg- there are enough prospects in this area that there's no reason to waste time with the ones who don't want to spend what the project is worth. I'm not talking about people who respond to a $30k ballpark with a "ohh....I didn't think it would be that much"- those people need to be educated on the true costs of construction, and some of them will become customers. I'm talking about the ones who respond with "$30,000? I've looked at the Home Depot circular, and I KNOW the material can't be more than $5,000. What do you charge- something outrageous like $45/hour???" I don't know what the clientele is in Colorado, but there are plenty of these geniuses here in NJ, and you'll NEVER turn them into a decent sale- I don't care if you bring Zig Ziglar himself to the sales call- they believe that the only person worthy of making more than $10/hour is them. The key is knowing which ones to stay in the game with, and which ones to walk away from quickly- after a while, it doesn't take long to figure out which are which, and in many cases it can be done over the phone rather than wasting time in person.

Bob

Mike Finley

LOL, Okay guys, I see where you are coming from.

I agree.

Bob you have already said exactly what I have been saying all along:
Exactly the customers I am addressing. What I'm talking about are customers who do qualify and not burning them over an ego trip. They all have the same thing in common, they have bad preconcieved notions of what a $1 spent will buy them. Some of them are this way because they have never bought any construction before, and some have been lied to by neighbors who want to make sure everybody knows what a good wheeler-dealer they were. Bottom line is it costs money in order to get to stand in front of a customer and I want to maximize the return on that investment.

The message is pretty simple and clear, when these customers do get the education they require through my competition I want the thoughts in their heads to be as close as possible to

"You know honey, I guess we can't get the deck we wanted for $10,000, we even called the contractor Larry our next door neighbor used and even he said that Larry must have forgotten he actually paid $20,000 for the deck he built him. I think I'm going to call Mike Finley back because you know, he was the only guy that took the time to show us what we could get for $10,000, and the deck he showed us we could get for $15,000 is actually pretty nice even though it won't be big enough for a hot tub in the corner like we were thinking. But you know like he said we could save a lot of money by just putting the hot tub on the existing patio at the bottom of the new deck."

"You're right my wonderful husband! You know, he was the only guy we talked to that even suggested that! To save $5000 I can walk down the stairs to use the hot tub! Here's his card see if he can come over tomorrow and let's give him a big fat deposit!"

That's my perfect world man. It might be a fantasy, but it keeps me motivated.

Bob Kovacs

Well, it's not quite perfect, Mike- you forgot the part where the wife says "And Mike was such a studly, sexy guy, I think I'll invite him over for the weekly 'get naked in the hottub with the girls from Hooters' party tomorrow. It's at our house this week"

Bob