The Design Builder's Blog

3 Financial Myths That Compromise a Contractor's Long Term Success

Here is my list of the top three myths I see that compromise a contractor's ability to achieve long term financial success.  These areas definitely affect a contractor ability to profitably grow a business, as well as the contractor’s personal financial health, including retirement funding.

I must be competitive with my pricing

In my opinion when any business seeks to be competitive it typically becomes a commodity.  By that I mean the buying public looks at that business and or it’s offering as being the same as their other choices.   When consumers see a product or service as a commodity they ultimately make their choice between available options based on price.   By trying to remain competitive contractors playing in this sandbox become bidders in a reverse auction where the loser is the one who wins. 

To prove my point, ask any contractor who sells their services through a bidding process if they will have the money they need to comfortably retire at 65 without working again.  There will be some exceptions, but I bet the majority will tell you their plan is to work until they die.  What would their significant other say about that plan?

Also, keep in mind that nine out of every ten contractors will eventually fail.   By being competitive contractors are most likely joining the ranks of contractors who will eventually fail.   Rather than compete, why not differentiate your business?   Check out an article I wrote on this subject for Remodeling Magazine

I can't raise my prices; I'm already the most expensive contractor in my market.

I hear this one all the time from contractors.  Most of the time it comes from contractors who have no idea of their true cost of doing business and guess at what markup to use.  This is referred to as the WAG method, or the "Wild Ass Guess" method.  Based on the fact that they are guessing at what price they should charge I would also suggest they are guessing about being the highest price in their market.   Did they do or hire someone else to do market research to back up their claims?  I doubt it. 

When I ask how they know they are the most expensive most contractors tell me their prospects are the source of their assumptions.   For those using their prospects' feedback to determine their price point in the marketplace remember, buyers are liars.   The 11th commandment states that you can lie to a sales person and still go to heaven!

One of my contractor coaching clients told me he was the most expensive in his market and would not be able to sell anything if he raised his prices.    After I helped him do his first business budget and determine the markup he needed to use to cover his true overhead costs and make a profit, he went out that night and closed a deal at his new higher pricing.  Check out this article I wrote for remodeling magazine about the benefits of having confidence in you numbers.

I can only charge what the market will bear

Now, if a contractor has done market research, for his or her local market, this may be true.   Savvy contractors, those who know what price they need to charge, will sell at higher prices up to the point that a majority of protects stop buying.  I would consider this to be true market research.  However, these business not only know how to determine the true costs of doing business, they also typically have professional marketing programs to help them get in front of specific prospects and they employ professionally trained salespeople who know how to sell.

Contractors using the WAG method to price their work also typically do not have a strategic marketing plan.  Without targeting a specific market of customer types, how can a business owner know what price point the market will bear?  Without professional sales skills, how would a contractor know if the reason for not selling at higher prices is due to the market or to his/her selling skills?

Also, what market are they referring to; the one they are proactively pursuing or the one that randomly ends up knocking on their door?  Are they using professionally trained sales people or are they using order takers?   One way to differentiate between sales people and order takers is that sales people present their solutions in person.  Order takers typically hit send.   If you use the hit send method I don’t think that counts as a valid way to test what the market will bear.

Want to be able to charge more for what you do? 

Check out this blog about why some contractors can raise their prices but most can’t.

Looking to target specific customers and work types?

Check out this all day Marketing and Sales Workshop

Generic Contractors Are Fading Away, Brand Names Are Shining

Remember the isles of generic vegetables at the grocery stores back in the recession of the 1990's?   Just like the manufacturers of those cans of generic vegetables, during the recent recession many contractors put themselves into a commodity market where the consumer chooses product based on price.

Manufacturers of those generic foods told us what was in the can was the same thing you would get if you bought the name brand products.   They also told us that the reason they could sell at low prices was because they didn't do any advertising and skipped the fancy labels on the can.   Essentially during the recession of the early 90's manufacturers of these products were banking on cash challenged consumers being attracted to their low prices for what they claimed to be the same quality of products they would get if they purchased the more expensive name brands.

Here today, gone tomorrow

My recollection is that those products occupied a few isles at the supermarket during the early years of the recession and consumers did give them a try.  But, by the end of the recession consumers stopped buying them and the isles went away.   My theory is that consumers discovered the products weren't the same quality as the name brands, the quality of the food often varied from purchase to purchase, and even at a lower price buying them just wasn't worth it.   I can tell you from my own experience that my kids wouldn't eat the generic spinach.  For my family saving money on generic foods really didn't save us any money at all because what we bought didn't serve the purpose for buying it.

I would suggest the same thing is currently happening to many contractors who resorted to similar tactics.  To lower their prices they too at the start of the recent recession took on generic labels and stopped doing any marketing and advertising.  They also offered their services with the promise that even at low prices consumers would get the same quality project the well known name brand contractors were offering.  Like the generic food manufacturers of the 90's, now that the economy is improving, these contractors are  finding it hard to sell anything at all.

Here’s my message

This should serve as a wake-up call for contractors who want to stay in business and actually earn enough money to live well, maybe even eventually be able to retire when their body's give out due to old age.   Let's face it, if your selling strategy is to be the lowest price, you need to be the loser to win.   When consumers are short on money they may be willing to give you a try, but if your offering leaves a bad taste in their mouth they will likely go back to buying from the name brands as their income improves.

If you are having a hard time accepting my thoughts in this article just take a look around you.   All over the country I am hearing from name brand contractors who are overwhelmed with work, are raising their prices and desperately need more staff to help them get the work done.  At the same time generic contractors are complaining that they have very little work and consumers inquiring about their services are still aggressively beating them up on price.  Like the generic vegetables, I am pretty confident many contractors with generic labels will soon be gone from the isles where consumers shop for a contractor.

Think about it.  

If you brought a 30 pack of generic beer to a Super Bowl party, would your buddies let you in?

All Plans and Specifications Will Be For The Exclusive Use Of …

Do you give your plans and specifications away to prospects for free, or do you only leave plans and specifications with paying customers? 

Remember, people who want stuff for free hang around with other people who want stuff for free.  How you decide to answer this question will have a long term effect on your business and future referrals. 

If you choose to not leave your proposal with prospects unless they commit to your company, this policy should be discussed with your prospects during the initial sales call.  By doing so it will not become a surprise to them when you come back to present your proposal. 

You are presenting, not emailing proposals, right?

Sample text

Here is some sample language you can consider using inside the remodeling proposals you create for prospects.  This information is for your reference only.  Be sure you have it reviewed by your own legal council before using it.

This proposal and any related plans and specifications shall be for the exclusive use of; and will remain the property of “Construction Company” until a Construction Contract agreement for the proposed work is reached between both parties.  The acceptance of this agreement will require the owners’ signature(s) and payment in full of the specified deposit.   If this proposal is not accepted at the time of presentation, owner(s) are welcome to view all plans and specifications at the contractor’s office at a mutually agreeable time.

This language is best used at the beginning of your proposal

Include your policy in beginning of your proposal so you can remind your prospect about your policy very early during the proposal presentation meeting.  If they have a problem with your policy you can discuss their concerns and both of you can decide whether it makes sense to continue and present/discuss the rest of the proposal. 

By not leaving your proposal behind you are protecting your business as well as your prospect

The information you include in your proposal comes from your many years of experience and education.  For this you deserve to be compensated.   Also, because you and your team have expereince working together, I would suggest your proposal probably contains a level of detail adequate for you and your team to build from.  But, your proposal may not have adequate detail for others to build from.  If you allow other contractors to work from your proposal they and the home owner may be making assumptions about what is or should be included to do the job correctly and to building code or safety requirements.  By allowing such things to happen you may be putting other contractors, the home owners and or the success of the project at risk. 

How much risk are you willing to accept to sell a deal?

I also suggest you consider the possible liability you take on by creating specifications and or project plans and leaving them with a prospect that does not do business with you. By doing so you may have put yourself into a position where the prospect or another contractor actually works from them.  If they have challenges when building the project and decide those challenges were caused by your plans and or specs, they may have legal rights to sue you.  Regardless of whether you feel you are innocent or guilty, you will need to cover your own legal expenses if you get to court and most likely will not be able to re-coup your legal costs even if you are found innocent.  If you are found guilty you may even be required to pay the legal expenses incurred by the person suing you.

If you decide to take this risk, I highly recommend you obtain Errors and Omissions Insurance Coverage or Professional Design Liability Coverage.

Some big picture thoughts for remodelers to chew on before they decide:

• I suggest you are in the business of selling remodeling, not designs.  Can you earn a living selling designs?
• Avoid being used as an unpaid consultant.  How does that feel when it happens?
• Don’t let your proposals, specifications and plans facilitate the ability for some guy named “Bubba” to get the job rather than you.
• Not every lead you get should or will be YOUR customer.
• If you work for the wrong customers, they will be referring you to people just like them!

Guest Blogger:  Nicole Allen is the Social Media Manager at R2R Marketing where she is responsible for maintaining and executing a clearly defined social media strategy to increase brand equity and awareness for current clients.  She is also the group manager for “Home Improvement Industry Specialists” group on LinkedIn.   Nicole is an expert in Social Media Management and has a military background as an Aircrew Survival Equipmentman.

Joining A Contractor Trade Association Should Be An Informed Decision

There Are Many Reasons to Join a Professional Organization…and many questions you may want to ask before you join.  Here are some things to ponder.

Membership in a professional organization is an investment in your professional credibility.

• There are many organizations out there that will help your credibility. However, there are a few out there that do not. Check them all out before you join no matter how cheap the dues are. Are their agendas in your best interest? Are the key members upstanding in their field and community? They are the face and voice of the association and if they are unprofessional or unethical in their choices, you will be seen the same.

 

It’s an investment in personal development, and growth.

• Choosing the right association should involve doing a little fact checking. Does the association promote and foster a learning environment or does it seek to push its own agendas on you? Does it offer you training materials that are relevant to your company? Does it offer you a place to network with your industry peers? What is the overall tone of the association? Above all, does it portray a professional appearance? If their agenda is not in-line with yours you may want to re-think your membership.

 

It’s a place to get and expand your knowledge

• Membership is a way to stay connected to your professional peers who are going somewhere, and don’t mind sharing knowledge on the journey. The age old adage, “If you want to be successful, surround yourself with successful people” applies here. The association you join should promote professionalism, ethics and training to help you succeed. Many say this is what they do- make sure they actually do it.

 

As a professional association, they should work hard to help you succeed.

• You should receive tools (including a high-quality member website) and training to help you grow. They should offer support as you meet professional challenges, and opportunities to develop your business.

 

Here is an example

As a member of the Associated General Contractors of America (AGC), for example, a contractor has access to all-inclusive member resources and tools through the AGC Legislative Action Center and receives member discounts on AGC products and services. Additionally, with a nationwide membership of more than 32,000 firms and a network of 96 chapters, AGC offers its members the opportunity to meet and build relationships with fellow professionals, owners and suppliers.

Can the new association you are checking into offer you something that is comparable? Even if they are charging you low or a no-fee membership, is it really worth it if they cannot help you succeed?

Last thoughts

Membership in trade associations can not only benefit the employees of your company, but it can also project a positive image of your firm to your customers; if you choose your association wisely.  Membership in associations shows a business’ initiative, its engagement in a particular trade and its commitment to staying abreast of current developments in the market. It can also affect you negatively by conducting itself in an unprofessional manner and by throwing business and moral ethics out the window. Look closely at the way their key members hold themselves in a public forum and ask yourself one question- Is that the way you want yourself and your company to be seen?

Guest Blogger: Chuck Green is a Big 50 remodeler who returned to video production, winning a New England Emmy® Award in 2012. Chuck and Shawn have worked together on several video productions including a series of RRP videos for Remodeling magazine.  Check out Chuck’s work at www.PerpetualMotionMedia.com   He can be reached at: CG@PerpetualMotionMedia.com

Tips For Using Video On Your Contractor Website To Introduce Your Team

To consumers a remodeling project can either feel like an invasion or a friendly co-occupation.  Using video on your website is a great way to convey which reality your company offers if they hire you.  

In my last guest blog here at the Design Builders Blog I discussed 6 Creative Ways You Can Use Videos On Your Contractor Website.  In this blog I offer some tips and suggestions for getting the best value out of the videos you use on your website to introduce your team. 

Topics for staff to address in their video interviews

Before you do these videos I suggest you consider your goals for doing them.  Below I offer two suggested goals and some topics to help accomplish the goals. 

Goal 1: Convince your future customers their home will be in good hands.

• What is their background and/or length of time at their trade?
• What does it mean to them to be a team member?
• How long have they been with the company, and how have they moved up in skills and responsibilities?
• Is there a special project they’re still passionate about? Any award winners they’ve worked on?
• Mention how, especially if they’re also homeowners themselves, they really understand the importance of (for example) closing outside doors and wiping off their feet.
• Or perhaps it’s keeping work disturbances to a minimum.

Goal 2: Deepen the personalization, demonstrating they’re people not too different from your customers:

• What town do they live in? Grow up in?
• Say something about their children and family.
• What are their hobbies and outside interests?
• What are their significant achievements both in work and outside?
• What’s the most interesting place they’ve ever traveled to or lived in?
• What instruments do they play, and for how long? (Sometimes it might be wise not to talk about the kind of music they’re into.)

Tips for creating high quality video and audio

Ideally, keep each of your construction team introduction videos to under a minute, but 1-1/2 minutes should be the max. Record all the relevant topics, but post only 2 or 3 of the elements which come out best with each person.  Here are several important considerations to keep top of mind if you want to maximize your video investment.

Relax them    

It’s important to have everyone around be relaxed; if it doesn’t flow easily after a couple of tries, take a break and return to the filming later. For the interviews, have each person sitting while looking at someone they’re friendly with, located just off to one side of the camera. Interviewees should remain looking at the other person continuously and avoid quick looks at the camera (or look only at the camera). If a person's eyes shift back and forth, they literally look shifty!

Lighting         

All the introductions should have extra care taken to light the person and background well.  To look best, avoid mixing daylight, fluorescent, and incandescent lighting; either applying gels to change the color temperature of sources, or swapping out bulbs.   

Sound            

Surprisingly, the mantra in the film and video world is “Sound is half the picture.” Poor sound is a hallmark of schlocky work, dragging down many otherwise promising videos. If someone insists they don’t need an external microphone to record speech, don’t even consider working with them!   Also, watch out for and eliminate distracting sounds in the background.  Radios OFF! And don't seat someone close to an inside corner, because there will be very slight but irritating echoes.

Tools do not make one a master  

As with construction tools, mastering the use of the equipment to do professional-level work is a long process. Not surprisingly, creating video worthy of a company which does high quality work involves far more than just having good equipment.

Script 

Prepare a rough script, allowing for the improvisational nature of most interviews. It can serve as your guide during the production recording work, in many ways. When developing your script you might also want to consider and plan for the places other than your website where you will show off your videos.  For example a cable television commercial could be filmed simultaneously if your efforts are well planned.

3 Ways Contractors Can Be Small But Smart

If you consider your business to be a smaller company, and prefer to stay that way, why try to copy or conform to the way larger companies do business? Instead, be different! Be small and smart!  Look for what the big guys can’t or won’t do or maybe what they can’t do as well as your company.  Here are three ways smaller construction and remodeling businesses can beat the big guys.

Provide a more personalized service, and then find the clients that want that kind of service.

Typically in larger firms most employees are specialist.  Each employee on the team will do just one part of the process, such as just the design or just the estimating. Because of this, clients working with larger businesses may never really get to know one employee very well. A smaller company has the possible advantage of having the same person sell, design, estimate, and help manage the project. Certain clients will be attracted to this type of relationship. To get in front of prospects who want this kind of service you need to market the advantages that come with it, otherwise prospects will assume you’re the same as the other companies they can work with.  Writing about how you do business and sharing stories about how and why your past customer benefited can help point interested prospects your way.  Doing so within your blog is a great way to get the message out.  

The people who represent your company should be ambassadors.

In many situations, your employees will have much more personal contact with clients than the business owner or manager. Attract and train good employees, then create or maintain an atmosphere that fosters a desirable company culture. People buy from people. A happy team of employees with great people skills, who believe in their company, will demonstrate that message through their actions and attitudes. If your ambassadors are thinking and acting as ambassadors, clients may be motivated to use your firm again and perhaps also refer you to new prospects. Many contractors share that those client types and their referrals will often request a specific employee or lead carpenter as a condition of doing business. Consider whether your clients are buying what you build, or maybe how your team builds it.

Get your prospects to help you identify and sell your difference

When you meet with a prospect, why not ask what they don’t like about working with the larger firms. Better yet, ask them what they think might be advantages of working with a smaller firm. If you are careful not to lead them to a predetermined conclusion, you might just find new ways to service them and attract similar prospects.

Try this next time you interview a prospect: Ask them why they think other prospects chose to work with your company rather than the big guys. Almost every time, their reason will be exactly what they are hoping you will do for them. Rather than give them a reason to say no by discussing other possible reasons, find out why they answered the way they did. Get the “why” behind the “what”, and then work with what you discover.

Something to ponder as you think about the future of your small but smart business

“Just because you’re following a well marked trail, it doesn’t mean whoever made it knew where they were going”

Guest Blogger: Chuck Green is a Big 50 remodeler who returned to video production, winning a New England Emmy® Award in 2012. Chuck and Shawn have worked together on several video productions including a series of RRP videos for Remodeling magazine.  Check out Chuck’s work at www.PerpetualMotionMedia.com   He can be reached at: CG@PerpetualMotionMedia.com

6 Creative Ways You Can Use Videos On Your Contractor Website

The trend of including video on websites is advancing rapidly, but remodeling company websites have been slow to catch on. This is an opportunity to get ahead of the competition. Dr. Tom Leighton, from MIT and Akamai Technologies, has predicted HD video will be 75% of all Internet traffic by 2014.

Creative ways to use video if you have a contractor website

Capture attention

Engage website visitors through well-made videos.  Use them as a way to start building a relationship with your company even before the first meeting or call takes place. You can really show your company as a professional operation, while putting a personal face on the business and easing potential customers’ fears about having their house remodeled and who will be doing the work.

Introduce the leader

A pitch from the company president or owner should have a short intro about the company, around minute in length if possible, sort of an expanded elevator pitch.

Show and tell

Present the (hopefully) polished staff who will be working in clients’ homes and as well as those interacting from the office. Also consider including key trades people if you work with them regularly. By using videos you’ll be going beyond what a write up can do with these introductions. The talks will pro-actively address any uneasiness homeowners may have about what kind of people will be in their homes.  Ideally I suggest keeping each one to under a minute.            

How We Work:

Consider having a section illustrating the company’s methods of working.  A simple piece would be the president/owner or project manager speaking interview-style about the company’s philosophy and policies on areas ranging from smoking to not using occupants’ belongings.  While a narrator describes things a How We Work video could show things like details of dust control methods in use, how flooring is protected, workers in clean company shirts, how a temporary kitchen is set up during a kitchen remodel, a message board area in use (if any), end-of-day cleanup going on, and any details which demonstrate the company’s professionalism.

Testimonials:

Include testimonials by home owners filmed in their favorite spots that were part of the project.  Since people generally choose to work with those recommended by people they feel they can relate to and trust video testimonials of real customers in their real home settings can be a powerful way to do this.

Walk-throughs:

Before and after photos can be powerful, but a before and after video can really pull a viewer in deeper; especially those who have no experience with remodeling. One particularly engaging feature would be a smooth video walk-through of your completed projects, filmed without any camera shake using a camera dolly or special stabilizing rig.  Handheld, shaky camera work rarely makes for high quality video and may not project a professional image of your business.  Moving a notch up would include adding a before walk-through of the space recorded before any work begins.  The before video does not need to be free of shakiness, as long as it is paired with a carefully done after video.

Remember, video killed the radio star. 

If Dr. Tom Leighton is right it may take over for the written word as well!                       

Watch for Chuck’s next guest blog

Chuck has committed to contribute another guest blog in the near future.  Be sure to subscribe to the Design/Builders Blog so you won’t miss it.  Here’s a rough outline of what he will discuss in that blog.

• Topics for the introductory talks
• Tips on creating high quality video and audio
• Additional sites and uses for your video

 

Guest Blogger:  Kim Downs has been focused on building WOLF’s brand and shaping product messages for 17 years. Her integrated approach to program development includes interdepartmental communication as well as common sense strategy resulting in programs that work. She has a steadfast belief that building a marketing plan doesn’t require an unrealistic budget. Kim contends that even small, meaningful steps can do wonders in building a brand.

How Contractors Can Sell Themselves - Without Selling Themselves Short

Last month Shawn posted a blog warning contractors of the price shopper titled "11 Common Traits of People Who Buy Remodeling On Price". He explained two types of prospects who price shop remodeling; Those who are driven to pay as little as possible and those who simply don’t know what else to consider so they base their decisions solely on the bottom line. 

I think the biggest problem is that consumers just don't know what to expect. HGTV has been a blessing and a curse for our industry. Because of shows that do a major project in 2 days for just $1000, people have gotten the idea that improvements are not only easy...but cheap.

Rather than chastising their ignorance, you need to educate them during your sales process.

Unfortunately, I agree with Shawn when he stated that many contractors are terrible salespeople, so they have to sell on price.  If that’s you, then you really need to ask yourself if you’ve actually invited the “haggler” to contact you.  If your brochure, ad, website or any other selling tool you use promises “Best Prices”, “Affordable Service” or “Small Cost for High Quality”, as Jeff Foxworthy would say…"there’s your sign”.

If this sounds like a lot of the potential customers you talk with, it’s time to get tough.  Not on the prospect…on yourself!  You need to do a better job of selling yourself and not the job.  So how do you sell yourself, without selling yourself short?  The easiest way to do that is with your website.

By the way, if you’re saying to yourself, “Wow, I don’t even have a website,” then that’s an entirely different issue!

Website tips to help you differentiate your business

Tell your story

Most people do a bit of research before calling for bids. Make sure your website clearly explains your business philosophy, process, product choices and anything else that will help steer folks away from price shopping. Include lots of pictures. Before / After shots are great…and if they include the homeowners in the “after shot” better yet!  Real people, real project, real happy! 

Let others tell your story

When you buy something on Amazon, do you read the reviews before pushing the “Buy It” button?   You can have the same type of “rating system” on your own website.  Easier yet, add testimonials from the happy customers in your photos.  But be sure to keep it current…and real.  Many people visit a website multiple times before making the first contact.  You want to be certain they see new images and comments when they visit so they know you’re a busy professional with lots of satisfied customers.

Brag a little

Have you earned awards or accolades from pertinent associations?  Non-customers and peers giving you kudos speak volumes to a potential customer. Are you a Certified Installer for a particular product?  My company offers perks and real benefits for becoming a certified installer of our products…and it has proven to make a big difference in our Certified WOLF Pro’s sales process. 

Get personal

People do business with people.  You can be professional and still let your clients know a little more about you.  A personal connection can build a level of trust and comfort that goes a long way in building a better working relationship.

Leaving out the dollars makes sense

Steer away from the phrases mentioned above and focus on the quality of your service, your process and the satisfaction of your customers.   If you don’t want your customers to focus on the price, then you shouldn’t!

Watch for Part II

So now that you have your website crafted to sell, you need to understand how to make it an integral part of your sales process.  In a follow up blog to this one, titled “Using Your Website As A Resume To Help You Sell”, I’ll share some suggestions for improving your sales process. 

About WOLF:  WOLF provides kitchen and bath cabinetry and building materials, marketing and sales support and financial services exclusively to independent LBM dealers in 28 states in the Eastern and Midwestern U.S. Since its founding in 1843, York, Pa.-based WOLF has evolved into a sourcing company that offers American-made, WOLF-branded products and other high-quality product lines.  Learn more about WOLF at www.wolfleader.com and www.wolfhomeproducts.com.

Not All Remodeling Leads Are Created Equal

All contractors want leads.  Without leads there wouldn’t be any customers to do business with.  Some contractors are happy just to get leads and they give little thought to the quality of the lead.  Other contractors want specific leads and create criteria they will use for qualifying the value of those leads.  If as a contractor you want to sell more projects and don’t want to waste valuable leads you might want to consider where your prospects are in their buying process before you try to close the sale.  Attempting to close the sale too early can kill the value of a lead all together; at least for your business.

A name and a phone number do not represent a lead

It’s important to consider how you and your business will define a lead.   This subject came up recently at a Remodeler’s event I participated at earlier this year at the Marvin Windows and Doors Training Center up in Warroad MN.  From the discussion that followed we all came to the conclusion that most contractors who do no marketing at all consider a lead to be anyone who calls their businesses looking to get work done.  On the other hand those remodelers who were doing proactive marketing were adamant that a qualified lead was what they were after. To these remodelers, and I agree 100%, a qualified lead was a  lead that qualifies to do business with a company based on that company’s pre-established  target customer and product or service offering. 

Qualifying leads

There are many ways to qualify the value of a lead and whether or not your business wants to work with a certain prospect.  In a previous blog post I shared a list of 25 questions contractors can use for prequalifying prospects.   As the market picks up and leads increase you won’t want to be wasting time chasing poor quality leads.  Use those questions, and any others that make sense for you, to help focus your efforts on the right leads. 

Consider the importance of timing

One thing many contractors neglect to consider is where their prospect is in their buying process.    Here are three ways to think about this:

1. Some prospects are just getting started thinking about what to do.   They aren’t ready to commit to any specific product or choose a contractor to work with yet.
2. Some prospects have already started their research.  They may be clear about what they want to accomplish and the things they need to consider, but may not yet have chosen the right products for them or even know where to start looking to find them.   They too may not yet be ready to chose a contractor and make a commitment to buy.
3. On the other hand some prospects have done their research, done their due diligence picking out products and are ready to interview contractors for the purpose of moving forward and getting their project under contract.

Knowing where your prospect is in their buying cycle can often make the difference between closing the sale and alienating the prospect.

Close the sale or nurture the lead?

Consider that if you try to close a prospect that is still in steps one or two above they will not likely buy anything from you, at least at that time.   How could they?   They still don’t have enough info to make a confident decision.   If you try to close them you might just alienate them.   Depending on your approach, if you make them feel bad because they wouldn’t make a decision and or that they wouldn't buy from you, they may never buy from you.  But, on the other hand, if you know they are not ready to buy, rather than attempt to close them see if you can help them move their process along so they can do the due diligence required to confidently make a decision and sign a contract.   Helping them through this process is what is often referred to as lead nurturing.

Practice Catch and Release

According to GE Capital Research consumers spend 38-115 days researching before making a major purchase. If your qualified prospects are not yet ready to buy, respect their process and consider your approach with them.   Give them the time they need when they need it.  By this I mean give them time to do their research. And, at the same time consider offering them some guidance to help move them along and to show that you can be a trusted adviser for them.   When they are ready to decide on products and need help with that part of their process again be ready with help and guidance, but don’t try to close them yet.   Remember, if they told you they were still trying to decide what products to use how could they make a buying commitment?  Trying to close them may seem disrespectful to them.  Instead offer them guidance and let them know you would love to work with them when they are ready to choose their contractor.  The idea here is that if you practice catch and release, and your prospects can swim off unharmed, they will likely remain in your pond and may decide to jump on your hook when they are ready to bite!

After Bad Experience At His Own Home, Contractor Shares Thoughts With His Employees

Guest Blogger: Tim Piendel is the Principal of GreatHouse Atlanta, a full service design/build remodeling firm serving north metro Atlanta. Reach him at tim@greathouse-atl.com or 678.352.1035.

Back story to this guest blog

Tim is one of my coaching/mentoring clients.  We have been working together to help Tim grow his business and put a plan in place so he can slowly reduce his day to day involvement by empowering current and new employees as his business evolves.   Tim shared the email below with me after sending it to his employees.  In the email Tim shares a challenge he had with a painting contractor doing work at his own home as a way to help his employees understand how GreatHouse wants to build and protect its brand.  With his permission I am sharing it with you.

Here is Tim’s email text.

ALL GreatHouse Employees and Subcontractors:

I just wanted to share with you an experience I recently had with a contractor since I don't want this happening with our jobs. It is my intention to stay successfully in business and I want you to be part of that success.

Here's the story…

Just recently I had some painting work done on my home. There were two parts to the project, a preparation and a completion. The contractor came to my home and performed the first part of the project but did a poor job. I pointed it out and gave the person a chance to fix it but I was given excuses. I talked it over with my wife and we fixed part of the project ourselves and called the contractor back to fix the issue. They came back and saw what a corrected preparation should be like but offered no apologies, just excuses. They finished the preparation fine after that, but I, as a homeowner had to initiate it. 

The next step was to complete the project. This was an exterior project so it was expected they would not be here when the rain had made completing the project impractical. However, there was no call. Kind of obvious, but still, a courtesy call is always welcome. The next day came and was ideal for completing the work. However, the contractor was a no show and a no call. This is unacceptable. Now, with rain coming in again, the project was delayed another week. At this point, as a homeowner, I am frustrated, mad, and have lost confidence in the contractor. This all could have been remedied with a simple communication. 

Lessons learned…

1. NO MATTER WHAT THE JOB, DO IT RIGHT! Shoddy workmanship always cost you more in the long run. Return trips always cost more in dollars and confidence.

2. DON'T MAKE EXCUSES. APOLOGIZE AND MOVE ON! A customer does not want to hear excuses; they just want honesty and closure. Besides, you'll dig yourself a deeper hole.

3. YOU CANNOT OVER COMMUNICATE!!!!!! Call, text, email…whatever is appropriate, but do so promptly and often.

4. AGAIN, YOU CANNOT OVER COMMUNICATE!!!!! When you don’t call to say where you are and they are expecting you, they are just sitting there boiling and waiting to pounce on you and make your job harder and unpleasant.

You may think that your job is only to complete your service or product but that is only part of it. We are PRIMARILY in the customer service business. We have fabulous clients! By the nature of our business, we are invited into people’s homes and we must respect their rules and timing. We must earn and keep their trust. They must have CONFIDENCE that we will complete the project correctly, on time and on budget. That's what we do.

Thank you for your time. As always, feel free to contact me with any question or comments. I want all of us to be successful. I am willing to help anyone that needs help.

'We are what we repeatedly do. Excellence, then, is not an act, but a habit.' - Aristotle

Thanks,

Tim Piendel