The Design Builder's Blog

Guest Blogger: Ruth Ann Monti is the founder of TimeStorm Communications, which provides original content, copywriting, social media and marketing services for entrepreneurs and small business. She lives with her son and two dogs in sunny Scottsdale, AZ.

3 Ways Contractors Can Become a Trusted Customer Resource

A recent survey by Planese found the home improvement and remodeling industry earned a customer service score of 4.5 out of 7 in 2013. Not bad, but it could be better. More worrying is our industry's score for meeting expectations, which is just 36 percent. Comparatively, banking scored 61 percent, which is pretty good for an industry that isn't exactly the most popular.

A little bit of work to understand what your customers or potential customers want and offering yourself as a good resource can help you improve your customer service outlook and give yourself a competitive advantage.

First, Understand Customer Expectations

Many customers turn to online resources to find out the things they should anticipate during their remodel; usually these sites warn about delays and unexpected problems during the remodel like unusual plumbing and wiring. Dust and noise are hard to control, but this is a great opportunity to exceed expectations by taking an extra step or two and providing a little what-to-expect education beforehand.

Exceeding customer expectations is a strategy entrepreneurs should embrace, whether they run an auto repair, medical practice or remodeling business. Richard Branson, found of Virgin Group, says this is why his business stands out from the competition. If you are about to bid on a project, he says, "deliberately move your customers' expectations up a few notches and consistently over-deliver on your promises"

Use Your Proposal to Provide Customer Education

Begin offering customer education right from the start in your written proposal or estimate. Here are a few ideas about what to discuss that demonstrates your knowledge and experience and can help you shine:

• Timeframe. It's difficult to nail this down but if you're considering a project similar to ones you've tackled in the past, provide a sample schedule. Note items that can slow things down or build in time to address them. There's nothing wrong with over-delivering by completing a project ahead of schedule because you foresaw potential problems that did not materialize.
• Access to Specialized Equipment. Let customers know you have access to equipment that isn't part of the standard remodel kit. Provide links to specialized tools like lifts for second-story projects or insulation removal and installation.  Explain why they will or might be needed.
• Discuss materials options. Customers want energy-efficient and environmentally friendly materials. Explain the differences between standard drywall and plaster, for example, and the different grades of insulation. Tell them about green materials you've worked with.

Don't Be Shy: Advertise Your Work

Remodeling magazine urges contractors to advertise and enlist past customers for testimonials. Start by sending thank you notes for trusting you with their remodel and ask if they would send a review you can post on your website.

Speaking of: don't shy away from online review sites. Register with Google, Yahoo, Yelp and Angie's List, which is highly recommended for its popularity with consumers. In addition, by registering with these sites, you can respond to reviews and ensure that the information out there is accurate and complete.

2 Critical Business Investments for Contractors Looking To Grow Their Businesses

Good news!  Confidence in the future for remodeling contractors is starting to pick up.  A recent surge in new sales and leads being reported by many in the industry is a welcome change that will help businesses strapped with aging accounts payable and uncomfortable loan balances.  As welcome and helpful improved cash flow can be, be sure you prioritize how you use it.  Remodelers should not only catch up on dept with this money, but it is also important to direct some of it to invest back into your business as a way to prepare for an improved marketplace. 

Below are two critical areas remodelers should consider investing in as their finances improve and before the remodeling marketplace rebounds. Sure, both will cost money and require a commitment of your time.  However consider the lost opportunities and lost income you could be enjoying for the rest of your career if you invested in your business now.

#1, Think past the present and develop a long term perspective:

If contractors knew how to prepare for this recession, they would have been ready for it and the actual impact wouldn’t have been as dramatic on their businesses.  Knowing what you now know, use the lessons learned to better predict and deal with the next recession.  Also, start thinking about where you want you and your business to be in the future.  Be proactive and create a plan, don't wait to see what happens and where you end up.  Rather than do it on your own consider finding a mentor with a track record of success, someone who can help you and will invest the time required to understand you and your business and will invest in you. 

This should be an on-going commitment.  Don’t get started with a mentor unless you are willing to really embrace making changes and commit to the time it will take.  Establish a consistent schedule to interact with your mentor and stick to it.  You may be lucky enough to find someone who will do it at no cost.   If not, expect to invest at least an hour or more of your time a week to interact and at least $5000.00 over the course of one year to pay this person.  It is better to predict and control your future than to be subject to whatever happens.  The right mentor will have already successfully gone down the same path you are looking to get started on.

Check out this article about working with a coach or a mentor

#2, Improve your sales skills:

Consider this.  Contractors earn profits when they sell, they earn wages when they wear a tool belt.  If you want to make a lot more money you should learn how to improve your sales skills.

Selling isn’t what it used to be.  Memorized responses to prospects’ objections won’t cut it anymore and emailing your proposal is not selling; it makes you an order taker.  Find a sales training coach or program that will help you understand and take advantage of the psychology of sales and selling.  I took three years of sales training on a weekly basis during the early years of my business.  Sticking with the training and having a coach to guide me helped me “own” a sales system.  That system became second nature to me and dramatically improve not only my ability to sell at higher margins, but also allowed me to become more selective about who I would ultimately choose as my customers. 

If you join a training program expect to invest about two hours a week in the class and about $5-7,000 a year for the training.  If you have multiple salespeople consider doing in-house training and working with a remodeling specific sales coach and assume you will invest at least $7000.  If you choose the right trainer and embrace what you learn, it will be an investment, not an expense.

Guest Blogger: Graeme Owen, based in Auckland NZ, is the builders' business coach.  Since 2006, he has helped builders get off the tools, make decent money, and free up time for family time, going fishing, and enjoying sports.  Get his free ebook: 3 Reasons Builders Lose Money and How to Fix Them for High Profits at TheSuccessfulBuilder.com

To Close More Free Estimates Be There for the "Which Builder?" Decision!

Are you wasting time preparing building estimates for jobs you don’t get? Frustrating!  And costly!  Maybe you are like so many builders making one of the most common estimating mistakes: Not being with the client when they are deciding which estimate to accept!

There is no doubt that the builder who is with the client when they are deciding on which estimate to accept is highly likely to get the job.  Wouldn’t it be great if you could be that builder? The thing is...you can.

Here are three keys to being present when the client is deciding "which builder" to hire,

1. Discuss Other Estimates

In your first meeting with your client make sure that you discuss with them how many other estimates they are planning to get. Even though they may like you and tell you you are the only one, it is highly likely that they will consult another builder - if only to check that you are not “ripping them off.”  Also, if they are borrowing money for the build, they may be required to get multiple estimates.

2. Set the Estimate Close-off Date

Having broached the subject, discuss the close-off date for accepting estimates.   Make sure that you give yourself enough time to get your estimate together and enough time for your client to talk to other builders.

3. Position Being There

Finally, in your first meeting ask permission to be with them when they are making their final decision. Set the date and time for that meeting on your first visit.

Here is an example

You say, “Will you be getting other estimates?”

They say, "Yes."

Accept this graciously with something like. “That’s great.” Then say,

“When do you think is a good date for us to have all the estimates together?”

“What we request is that when you have all the other estimates together we meet and go over them with you. This way you can be certain that you are comparing apples with apples. Now I know that you are probably quite capable of doing this yourself, but we have had cases where people have accepted estimates they have later regretted. They did not fully appreciate exactly what was covered and ended up paying more than they had expected. So it’s our company’s policy to do this. Is that OK?”

“When would be a good time for us to meet?”

Summary

Follow this simple procedure and you will increase the number of times that you are able to be with your client at the strategic time when they are making their decision on which builder to use.   Some will not agree.  But if you don’t ask, none will agree!

Post and share your comments below.

Would you try the scenario described above?

So, how many of the last 5 estimates did you close?

What have you found to be the best key to turning estimates into sales?

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

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!

How One Contractor Is Keeping His Prospects and Customers Happy As The Economy Rebounds

As the remodeling marketplace picks up the amount of work a business owner must get done is also picking up.  The challenges of keeping up can become multifold depending on the type of work you sell.  For example, for many full service remodelers, not only is the number of projects increasing, so is the average project size and therefore the number of details to be handled for each project.  If you downsized your staff during the recession to control costs you might want to consider staffing up again if you want to keep your customers happy and help your prospects make quicker buying decisions.  Another good reason might be that you want to have a social life again someday.

One contractor’s success story

One of my coaching/mentoring clients, Joe Levitch of Levco Builders LLC in Boise ID, recently shared with me that he was having challenges getting prospects to pick out products and make decisions during the design phase.  This prevented him from finishing up their agreements in a timely manner and getting new jobs started.   He was also having problems finding the time for ordering and procuring products during production as well as closing out jobs due to the number of small details to be managed at the end.  All of this was getting in the way of Joe growing his business and being able to keep up with the pace of sales.   He shared with me that worrying about getting everything done was often times getting in the way of being “fully present” at meetings with clients and prospects. Joe referred to it as feeling like spinning plates in the air.  He said he didn’t want to get to a point where he dreaded another new lead phone call coming in and wanted to be sure he served his clients in the best way possible.

To address his challenges and take advantage of the opportunities of a recovering marketplace Joe created a job description detailing the help and skills he was expecting and used it to recruit and hire the right person to add to his team to work with him and his clients.  By working together with his new hire Joe reports that he now has time to work on the future while his new office person works on the current. 

So far so good

The changes Joe has made provide a better level of service and attention to current prospects and customers, and, at the same time, gives Joe the time and ability to also fully focus while meeting with new prospects for the first time.  By sharing the workload with the right person and using the right process Joe has improved the service his company delivers and his customers are very happy.  He says he now looks forward to working with new prospects as their calls keep rolling in.

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!

Guest Blogger: Robert Ritsema is the owner/creator of The iPitch, providing iPad based solutions to the building materials industry.  Reach him at rob@theipitch.com or 719.314.5608  www.theipitch.com  (iPad® is a registered trademark of the Apple Corporation)

Is Your In-Home Presentation Boring and Costing You Sales?

“Death by PowerPoint” and “Powerpoint Hell” are common criticisms of slide-based presentations.  Largely due in part to their creating a state of boredom and fatigue induced by information overload.  Excessive use of text, bullet points and transitions are all leading factors.  Retired Marine Colonel Thomas X. Hammes calls this effect  “hypnotizing chickens”.

Today, flip-book & slide based presentations remain very popular, especially within the home improvement industry. Desire has always been to provide our sales reps with accurate information as well as a structured flow to the presentation; it’s been a key premise/belief for creating sales but it may be costing you sales in the end.

Homeowners today crave information.

Information that leads to confidence and trust with whom they’ve ultimately chosen to complete their project. Yet, they also expect that information to be informative, fun, motivating and maybe even a little addicting as well. 

Your sales team is no different.  They also desire and expect to interact with content that makes presenting fun and interactive.  Veteran reps (the good ones) make the necessary adjustments within their presentation to do just that.  Largely  in part because flipping through binders and PowerPoint slides may not be enough for many today; and by their very nature, create ineffective presenters, lost sales and revenue.

Revive

 Since it’s launch in 2009, the iPad has been seen as a highly innovative and “game changing” piece of technology for consumers, businesses and educators alike. Its revolutionary operating system allows for the creation of an unmatched user experience.

The “user experience”, however, doesn’t have to mean gimmicky.  Simply presenting information in a way that is “unique and surprising” can be as simple as capitalizing on the iPads native and intuitive gestures. 

Gestures like:

• Tapping to reveal content - Keep your prospect involved by creating “interactive portals”.  Revealing additional , hidden or more in-depth content.
• Pinching open for video/photos – Capitalize on your media collateral by embedding them into your presentation for a novel and engaging user experience.
• Swiping – Move seamlessly throughout your presentation via a navigate-able, customer driven sales rep controlled menu system, a more responsive and interactive way to present.

Thomas Malone, a young Xerox reacher concluded many years ago that “when people actively participate in the learning process, they retain more.”  So creating new ways for your sales reps to engage and interact with your prospects allows for a more unique consumer experience; further enhancing their ability to execute the presentation as well as your consumers ability to internalize and take ownership of your company and products.

A Well Executed Plan.

Capitalizing on the iPad requires more than just showing your presentation, pictures and video.  Take time to consider exactly how and what would change to your sales presentation, communication systems and training programs.

Consider these helpful tips:

1. Team Engagement -  Engage all of your department’s leaders. 

2. Create a “Pilot” Program -  For best results, do not consider piloting or testing more than 4 apps at a time.

3. Have a “Launch Event” - Create a fun and informative event; involving the entire organization goes along way to insuring your “changes” are accepted positively.

The iPad has an opportunity to revolutionize the way in which in-home presentations are delivered and business is won.  Your well constructed and executed plan will play a crucial role in its overall success.

Why Some Contractors Can Raise Their Prices But Most Others Can’t

If you are a contractor or remodeler who has been selling on price to close work, you may have a difficult time raising prices as the economy improves.  I say this because as a result of selling on low prices during the recession you may have created a "low price brand" image in your marketplace.  Referrals and prospects who know about your brand will be expecting low prices and will not buy from you if your prices are higher than they experienced and or were told by your referring past customers. 

Can, will you, rebrand your business?

Perhaps by selling on low price during the recession you have doomed yourself to remain there.  You can of course re-market your business to create a new brand, but that will take a whole new strategy than you have used in the past, and it will also cost lots of money.  Keep in mind it will also take much longer to replace or correct a brand than creating the right brand from the get-go.  Rebranding may not be an option if your low prices didn’t or doesn’t generate enough gross profit to pay for doing it.

Also, if you’re a great carpenter without any real professional sales training and sales skills, you will probably not have much luck raising your prices because you don't know how to sell to begin with.   Think about it.  That lack of sales training is probably why you had to drop your prices during the recession just so you could sell something.

And, if you are a contractor who relies almost exclusively on referrals and word of mouth, and don’t do any marketing, you are not likely to get enough leads to take the risk of raising your prices.   

Why some contractors will have success raising their prices

However, those contractors with great marketing and sales skills, those who charged enough during the recession to bring in the gross profit dollars needed to keep doing and pay for great marketing and sales systems at their business, are in a great position to raise their prices.  When a contractor does strategic marketing, and does it well, that contractor gets far more quality leads than the business needs.  If you have more leads than you need you can typically afford to take the risk of raising your prices because you can afford some “no’s” when you have plenty more leads to pursue. And, if you have professional sales skills the risk isn't as great.

So, here’s my advice if you have been selling on price

• If you are close to retirement, say less than 3 or 4 years to go, don’t bother.  The investment needed to fix your problem will require both a lot of money and time.  Any marketing strategy can take at least 6-9 months before you will see quality and sustainable results.  And that’s if you do it right.  If you try to do it yourself through trial and error it could take much longer or might never make enough of a difference before you are ready to retire.
• If you plan to remain a small company, only worried about generating enough work for yourself and maybe one other worker, I suggest you work really hard creating and nurturing referrals.   This is a good low cost option but it does take a lot of your time.  You’ll need to spend time calling your previous customers to let them know you’re still around and would love to get more work from them.  I suggest you also let them know you would appreciate their referrals.  While you have them on the phone get their email addresses and permission to send them information about your company via email.   If you can do this you can take advantage of low cost email marketing strategies to stay in front of them and remind them about referring you.  If this works for you and you get enough quality leads, you will also need improved sales skills so you can raise your prices and still sell enough work.   If you can pull off selling at higher prices use the money to expand your marketing strategy beyond the email related tactics.
• If you have a business that is already doing at least $500-700K worth of business, but you are not making enough money, I suggest you find a coach and or a mentor who can help you.   For a business of that size you really need the help of a pro who can help you strategize what to do before you do it.  My experience working with contractors in this position is that there is typically much more to fix than the marketing and sales functions of the business.  The most common challenges I see with these businesses is a lack of understanding of the costs of being in business and how to properly price projects so they include the money needed to pay for things like marketing and sales training.  Sure, it will cost money to hire that person.  However, if you hire the right person to help you he or she can really speed up the process and help you control the cost of doing it.  The right person will also be able to refer you to other resources you need will to make the changes.   On the other hand, if you try to do it all on your own, you might just end up right where you already are.

 

• My last suggestion is for those contractors who won’t do any more marketing and won’t improve their sales skills.   If this describes you and your business I suggest you consider the option of getting out of the game before it’s too late.   As the economy improves savvy and committed business owners will be doing what it takes to beat out and even eliminate their competition for the high margin customers and projects.  If that happens in your market you will need to stay selling on low price.  My experience working with contractors in this mindset has shown that these contractors often live from check to check and most will never be able to retire.  I suggest you consider the option of a job at a company that already does good marketing and knows how to sell.  These businesses will be growing as the economy improves and will need the talents of good carpenters and project managers.  If you find the right company to work for you will probably make a lot more money, have a whole lot less stress in your life and your new job might even include a company sponsored retirement plan. 
  

Some final thoughts

If the survival of your business has been a constant battle and or struggle for you, deciding to proactivily change what you do, rather than waiting to see if your business can make it or not, might just be the best option for you and those you care about.  Changing what you do can include working on your business or seeking a job opportunity.   Either option is a good one, you get to decide.

Related article:

11 Common Traits of People Who Buy Remodeling On Price

11 Common Traits of People Who Buy Remodeling On Price

Consumers who buy remodeling on price typically don’t care about anything else but price; until they become customers.  Then after your remodeling or construction company has them as customers they seem to always want more than they agreed to pay for. 

There are two main types of prospects who buy remodeling on price. 

• The first is those who are driven to pay as little as possible.   These people typically apply this logic with everything they buy.   They are also much more likely to lie to you, your employees and your subcontractors if it suits their purposes for saving money and or getting more than they paid for.
• The second is those who, lacking insight, simply don’t know what else to consider when deciding between contractors so they base their decisions on the bottom line.  These people may actually be willing to pay more when selecting one contractor over another, but the contractor must be a true sales person to help them discover other more important things to consider.  

It also takes a true sales person to distinguish between those who buy on price on purpose and those who buy on price due to a lack of insight.  Most contractors are terrible salespeople, so most contractors have to sell on price.

For those who have been selling on price

My purpose of writing this blog is to provide contractors with some motivation to embrace sales training so they are not destined to sell on price forever.   Check out my list below of the common traits of those who buy your services on price.  If these things are happening to you it’s your own fault.  When you think of yourself as a contractor first and a sales person second, you doom yourself to a career that will probably pay you less than per hour than your employees earn.  If that is already happening you have three choices:

1. Decide to do something about it and get some professional sales training and coaching.
2. Decide to do nothing and recognize that you and your business are commodities
3. Or, avoid thinking about it and stop reading this blog post before you feel any worse about your situation

People who buy solely base on price have these common traits

I encourage you to use the comments area to add any others you feel should be on the list.

1. They see remodeling as a commodity where every contractor and proposal are the same, not a service where one company does things differently than another.
2. They always seek to get more than they paid for.
3. They don’t like to give big deposits or commencement payments; they expect the contractor to finance all or most of the job until the final payment.
4. They lied to you and think it’s just fine to do so.  This often leaves them wary and concerned that you will lie to them as well, creating a need for them to always be suspicious when interacting with you and your team.
5. These people won’t like discussing change orders at all, won’t pay for change orders at acceptance and or will want to negotiate their cost at final payment.
6. These people try to get free stuff out of you and your team after you start their job.  If you give in on this they will want more free stuff.  They are also likely to forget about the free stuff you already gave them when you want to charge them for any extras or change orders.
7. They will typically dispute your payment schedule, make scheduled progress payments late and delay your final payment as long as they can.
8. They will only buy from you again if you are the cheapest of the contractors they speak with.
9. They get closer to their own retirement at your expense and limit your ability to retire.
10. They will often find some way to blackmail you into reducing the final price.

These people hang out with other people just like them!

Here's one last thing to think about if you sell to people who buy on price; they hang around with other people just like them.   If they refer you they will probably be referring you to other prospects who also buy on price.   When they do so, based on their own experiences working with you, they will often coach the referral on how to lie to you and get stuff for free.   They will also often identify what your business’ weaknesses are so the referral can watch for them and use them to blackmail you into some type of money related concession before they are done with you.