A contractor we’ve known for some time recently sent us this note:
Hi Michael…I thought you’d get a laugh out of this response I received from a homeowner to my follow up regarding a remodel project on their home. Of course, I blame myself as if I had made a better first impression and given a better presentation I don’t think I would have gotten this kind of response but who knows…this couple was looking for a “deal” to begin with.
Funny thing is I never gave them a price…I gave them a ball park estimate range as to where their project might fall based on similar projects I’ve done and the “Cost vs Value” report. And notice how he’s willing to cheap out on the labor but not the materials?
The note he received:
If you can figure out a way to get the prices down, we would LOVE to do business with you. Maybe you could do the project on a part time basis, since no access to the house is needed until late in the project. Maybe you could bid out some other parts of the project to contractors that have lower labor rates.
It’s amazing the things a potential client can think of to get you to lower your price. Can someone explain how working on the project on a part-time basis reduces the cost?
I have to agree, he probably should have put more emphasis on himself, his company, and the value he brings to the table that the cheap guys don’t.
He shouldn’t write this project off yet, but I’d definitely put a limit on how much more effort it’s worth. The client’s mindset is about getting the lowest price, and that will have to change to make the sale.
I’d attempt one more face-to-face meeting, going back to the basics. Get the four questions answered. If or when they attempt to dodge your questions, or if they tell you they’re getting other bids, ask them for their criteria for choosing a contractor. This will give you the opportunity to explain why you’re the best company to do this project for them. We go into all of this in detail in our book Profitable Sales.
It’s important to use this approach to all sales calls so when this type of client pops up, and they will, you have the information you need in order to determine if they qualify to buy from you. If they do, you can move toward a design agreement or letter of intent. If they don’t qualify, you can move on. Following the four questions helps you identify the price shoppers and tire kickers quickly so you don’t waste time.
Our contractor friend had a tongue-in-cheek thought on how he might handle this:
I would like to say the following, “I can certainly get the price down (even though I didn’t give you a price to begin with; I gave you an estimated price range as to where the cost of your project might be). But, yes, I can get the price down by hiring the cheapest subs I can find to install the quality materials you want, cancel my insurance policy (and of course cheap subs won’t have insurance so that won’t be an issue) and I’ll draw up a very vague contract based on a very vague design with very vague specifications. And of course, there will be no start or finish date either on the contract. I’ll leave out the cost to keep your property clean, neat & organized throughout the project and we won’t test for lead or follow the RRP guidelines. To really make it cheap I’ll be sure to not pay a few subs (you may have a lien put on your house, but you’ll save thousands). Fair enough?”
We appreciate getting notes from the good guys, and this contractor is one of them. Sometimes it takes a client like this to remind you to get your sales presentation back in order to preempt this type of response. He’ll handle this right; I hope our insights will help you do the same.
The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses and their lives. He is the author of the books Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations.
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