Builders, Do You Suffer from Quote Wait Syndrome In Your Building Business?
Turning building quotes into sales
Most builders I know don’t like waiting. It’s not that they are impatient people - it’s just that they just don’t like it when subbies don’t turn up or when suppliers can’t deliver to schedule. Although annoying, these “waits” are small in comparison to waiting for a client to respond to a quote. And the bigger the quote the worse the wait.
Know that QWS (Quote Wait Syndrome) feeling? Wouldn’t it be good if the wait was less painful? Wouldn’t it be good if you knew that your quotes have a very high chance of being accepted?
Now of course it’s impossible to force your clients to buy what you think they should (although some tradies try really hard to do this), and it’s also impossible to get them to pay what you think they should (although again many tradies attempt it). But it is possible to greatly improve the chances of getting a positive response if you start out correctly - from the very first meeting.
In this article I suggest four things you can do that will greatly improve your capacity to win at the quoting game - four things that will, hopefully, reduce your QWS (Quote Wait Syndrome).
1 Work harder on the job estimate
I wish I could be paid a dollar every time a quote gets rejected for the reason that it is “way more than we expected.” I’d be a millionaire in no time at all! The client thinks $300,000 but the cheapest quote is $380,000! Everyone loses. Ever had this happen to you? It happens because no one really knows how much a project is going to cost until after it has been carefully quantity surveyed and priced (and finally built).
Of course, if you are building new units or homes with similar dimensions then you will know exactly how much the new build is going to cost. And so you can quote a definite price, excluding a few variables, right up front.
But renovations and additions are difficult to quote. Yet most customers still want to know how much it is going to cost. So, to avoid disappointment for both yourself and your client, spend sufficient time working out a rough estimate before you start the serious design/quoting process. Don’t proceed until you have settled on a really good indication of what you believe the initial proposals are going to cost, otherwise you waste your time (and your subbies time) quoting something that is not going to be built.
This way you can rest assured that when your quotes are presented they are not going to be rejected because they are way over the top.
2 Be pessimistic in the building quote
Always ...always ...always add more to your initial rough job estimates than you think your clients can handle. Always! I have never heard of a renovation that has not exceeded the initial estimate. Things get discovered and stuff gets added along the way and the final price is almost always well above the initial estimate. For some clients it doesn’t matter - the ones that were referred to you and for whom price is not really the issue. But for price conscious clients your rough estimate sounds like a fixed price, however much you may tell them otherwise.
That first number is the one that sticks.
So make sure that you add heaps to your initial rough estimate. A good idea is to back cost several renovations and compare your initial rough estimate with the finished cost. The difference is the amount you estimated too low. Use this as a guide. That way your rough estimates are likely to be closer to the actual finished cost.
If you allow for variations and extras in your initial rough estimate then once the design is done, your quote is less likely to cause surprise..
3 Work the budget
Once you have a good worst-case rough price estimate then ask you client, “Is this what you had in mind?” If so, then you can proceed safely. If it is too high, then you need to revisit what it is they are asking you to do. Don’t even go on to the “firm” estimate or quote stage (or even the design stage) until you have really good agreement on a rough estimate.
If they are not ready to talk about their budget then ask, “If we were to come back to you with a firm estimate/quote for around this amount (the pessimistic rough estimate) would you be happy to proceed with us?”
The truth is that your clients will likely have no idea of actual renovation costs, so getting them to face the reality early will improve the likely acceptance of your quote.
4 Tell stories
Now I can hear you ask, “If they knew the actual finished cost they might not even start.” Or, “Some guy will come along and give a really low ball park figure and they will go with it.” How can we compete? A very real dilemma. So don’t compete.
Rather tell stories. If you have cases where a client has gone with a cheap quote, but ended up paying more, then go back to the client and find out how much they actually paid and compare with what they would’ve paid if they had signed with you. Get them to tell you how they felt when the costs kept climbing and climbing. If you don’t have your own stories ask some of your colleagues. Get together a set of real stories that show what happens when costs are not estimated carefully at the beginning.
Make sure that you get the facts straight and stick with them. Don’t malign the builder who estimated cheap and cost heaps. He may have just had no idea! Just show how failure to estimate/quote carefully at the beginning can lead to a disappointing outcome. Now it takes time to do this with your client, but if they get a true indication of the likely price of their project at the beginning, there is less chance your quote will be rejected for the “cheapie.”
Graeme
P.S. Whenever you’re ready….here are 4 ways I can help you grow your building business:
1. Grab a copy of my free book
It’s a road map of a successful 15 minute sales call that’s guaranteed to increase your conversion rate. http://thesuccessfulbuilder.com/book-15-min-sales-call/
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It's our new Facebook community where smart builders learn to get more income, time and freedom. View our free business resources for builders. Ask questions of like minded business owners and business coaches. Give your knowledge and expertise to help others. - https://www.facebook.com/groups/TradeMates/
3. Join My New Group
I’m starting a new group called “OnRamp” to kick start sales and marketing in your business. If this sounds like you, message me with the words, “OnRamp”, and I’ll get you all the information.
4. Join Loft Members
If you’d like help to get off the tools, make more money and get your life back...just message me at graeme@thesuccessfulbuilder.com and put “LOFT MEMBERS” in the subject...tell me a little about your business and I’ll get you all the details.