Sales: Setting Ground Rules

When you’re selling remodeling or specialty services, you’re often put in situations that require a quick judgment call. These situations give you the opportunity to set the ground rules for the relationship. Handled properly, your client will understand how you do business, and you’ll be able to determine if it’s a project you want to pursue. I’ll walk through three examples.

Client Dictating the Price

You’re on a sales call when the client tells you, “I’m only going to pay ten percent overhead and profit for this job.” When they see you’re taken aback, they add, “I also want a complete itemization of your proposal. You can email it to me.”

If you’ve been in construction-related sales very long you’ve had this happen. Too many potential clients believe they get to decide how you price your work.

Let me share a response that keeps you in charge of the situation without stepping on the client’s ego. When they state they’ll only pay ten percent overhead and profit, you can say, “Okay,” or don’t respond at all. There isn’t any need to respond. Keep the conversation going by throwing questions at them to get their mind off the idea that they’ll tell you how to price your jobs. They don’t know what markup you’ll use on your work. They have no idea whether you’re charging 10% or 200% overhead and profit. How would they know? They aren’t in our business; they have no way of knowing the cost of building the job or what it costs to run your company. It isn’t worth discussing. Just move on.

Now the demand for complete itemization requires your attention, as does the email request. The sooner you let your client know how you conduct business, the better. Start with, “Let me explain how we work. Itemization of any kind takes a lot of extra effort, and I’m happy to do it as long as I’m paid for that service. When I work, I like to be paid for my time just like you do. We charge $150 an hour with a minimum of four hours for any itemization we do. I think that’s fair, don’t you?”

Their response will tell you if they’re interested in a win-win business relationship, or if they are going to be a royal P.I.T.A. If their response is, “How can we know your markup if you don’t provide an itemized proposal,” it’s time to leave. You’re dealing with a client whose sole focus is getting the lowest possible price for their work. Do they ask their doctor, attorney, or dentist for an itemization? Do they tell the grocery store what price they’ll pay? You’re a business, not an hourly laborer, and they aren’t entitled to your private business information. Let another contractor build the job and lose money; you don’t need it.

As for sending your quote by email, that works if you’re an order taker hoping to be the lowest price. If you don’t want the work, email your quote. If you want to make the sale, explain that you want to sit down with them to review the proposal and answer any questions they might have.

If they aren’t willing to do that, it’s because they don’t want to make a decision or because they weren’t serious about the work in the first place. Politely ask them to let you know when they’re ready to review the job with you and make a decision. When they do, you’ll be glad to come back and go over the job details and your quote for their work. This separates serious potential clients from tire kickers.

Distracted Clients

You’re on a sales call and the client keeps answering their phone or texting a friend while you’re reviewing their job. You have two choices: do nothing and let them waste your time, or politely address the situation.

For example, “May I ask that you turn your phone off while we’re talking about your job? I have limited time and I know this job is important to you. I want to get all the information we need so we can determine if we can do this project for you. We’ll only be a few minutes more and unless it’s an emergency, I’m sure the others won’t mind if you get back to them after I’m gone.”

Their response will tell you if you have an interested client or someone just looking for prices or ideas with no intention of doing business. If it’s the latter, it’s time to leave.

One Client; Two Contractors

You’re on a sales call, talking with the owner, when another contractor shows up. They missed their appointment, so they’ll just join in with yours.

What happens next? The owner might want to keep on going with the other contractor in tow, asking you to “wait a minute while I catch Contractor B up on where we are.” Do you really want to put up with that nonsense? There is no way in the world the client is going to make a buying decision with two contractors there. Your time is being wasted.

Here’s how I would handle it. I would say something like: “Excuse me, Contractor B, this was my appointed time. I am sure you can call back at a later time and reschedule your appointment with them. Now if you will excuse us, we’d like to continue.” If the other contractor doesn’t leave, then I would leave. You aren’t going to make this sale anyway.

Are you being rude? No, you’re setting the standard under which you’re willing to work. If you don’t set it, Contractor B or the owner will.

I’ve given short responses to each of these situations, we go in-depth on these and other situations in Profitable Sales; A Contractor’s Guide. If you’re in sales and haven’t read it, you should. If you’ve already read it, read it again.

All three scenarios happen on sales calls, and they happen because clients don’t value our time or rank us in their list of professional service providers. You must be a good steward of your time, and insist others respect your time as well. Focus on clients you can do business with, not clients who waste your time.

“I hated every minute of training, but I said, ‘Don’t quit. Suffer now and live the rest of your life as a champion.'” — Muhammad Ali

---

Listen to the audio here, or select dots on the right to download:

---