Reasons For Not Giving Free Estimates

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Sparky555

Senior Member
1. Gas is pretty expensive.

2. The New Guys advertise free estimates for a year or 2 & then go out of business.

3. Free estimates take a couple hours. I'd rather get paid for those couple hours. If I don't have any work there's always a mountain of paperwork, a truck and garage to clean, or time to enjoy spring, or write stupid things online.

4. If a prospective client gets 3 or more free estimates they'll probably go with the cheapest estimate, or the best salesman. I know I'm not the cheapest & I doubt I'm the best salesman. If I was a really great salesman it would be stupid to be an EC. I could sell $50-100,000 cars on commission.

5.???

Dave
 
I know I can't afford any, much less many "professional's at my house", I surely don't expect anything for free...

We hired a landscape architect for the kin folk once... I think they talked about everything in yard ....

Get your money's worth ...
 
Sparky555 said:
1. Gas is pretty expensive.
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gas is a part of overhead,driving back and forth from the house ,driving to lunch.
2. The New Guys advertise free estimates for a year or 2 & then go out of business.
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What about those who have been in business for many years and still offer free estimates?
3. Free estimates take a couple hours. I'd rather get paid for those couple hours. If I don't have any work there's always a mountain of paperwork, a truck and garage to clean, or time to enjoy spring, or write stupid things online.
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50-50 chance of getting work or 0 chance of getting work
4. If a prospective client gets 3 or more free estimates they'll probably go with the cheapest estimate, or the best salesman. I know I'm not the cheapest & I doubt I'm the best salesman. If I was a really great salesman it would be stupid to be an EC. I could sell $50-100,000 cars on commission.

5.???

Dave
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Sales is what we do ,if you are not a good "salesman" then I would suggest you work to improve those skills.
 
Rewire said:
gas is a part of overhead,driving back and forth from the house ,driving to lunch.
What about those who have been in business for many years and still offer free estimates?50-50 chance of getting work or 0 chance of getting work
Sales is what we do ,if you are not a good "salesman" then I would suggest you work to improve those skills.
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Spoken like a member of the Free Estimate Club. It's OK, I was a member for 20 years. I still need an occasional fix.

Your percentages might be a little off at 50-50. Some people get 6 quotes and don't hire anyone. Others just want to motivate their husbands to do the work by having your bid on the kitchen table.

I run bids, I just don't run free bids. Any loss from the phone might be made up in running to more qualified clients. And my sales skills are through the roof at the moment. So is my average invoice. I'm (almost) tempted to run free bids just to check out my system.

Dave
 
Some businesses do very well with the free estimate approach, others don't.

I think everyone involved, including potential customers, understands its not really free. Just no upfront charge.
 
I have been thingking about it for a while. I have noticed somethimes when I am going over a potential job with a homeowner sometimes they look at you with that " sort of Oh yea look" and you realize that the person is going to do it himself but he wanted to see how you were gonna do it.

What do some of you charge for an estimate? 25 bucks? 50?? and how do most people react when they hear you charge?
 
tonyou812 said:
I have been thingking about it for a while. I have noticed sometimes when I am going over a potential job with a homeowner sometimes they look at you with that " sort of Oh yea look" and you realize that the person is going to do it himself but he wanted to see how you were gonna do it.

What do some of you charge for an estimate? 25 bucks? 50?? and how do most people react when they hear you charge?
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I get the feeling that people are fishing for information when they ask for an unusual amount of detail about an installation. I don't think I've run into any of those since I started charging a dispatch fee.

I have a system of fees that vary from $50-$125 depending on distance, my mood and time of day. It's no charge to repeat clients unless they're distant, or they abuse the privilege. If someone sounds like a winner on the phone I might default to $50 & refund with the job. If they sound like a looser, or I'm getting ready for bed after a day in the attic I might default to $125 w/o refund. Some people agree to the charge & some don't. Sometimes I do a good job on the phone selling a value for the dispatch fee & sometimes I don't. The percentage of calls booked to my sales effort on the phone are probably related. There are a lot of guys doing cheap cans, fans & services around here, so it's not worth running around for low bid.

Dave
 
Sparky555 said:
1. Gas is pretty expensive.

2. The New Guys advertise free estimates for a year or 2 & then go out of business.

3. Free estimates take a couple hours. I'd rather get paid for those couple hours. If I don't have any work there's always a mountain of paperwork, a truck and garage to clean, or time to enjoy spring, or write stupid things online.

4. If a prospective client gets 3 or more free estimates they'll probably go with the cheapest estimate, or the best salesman. I know I'm not the cheapest & I doubt I'm the best salesman. If I was a really great salesman it would be stupid to be an EC. I could sell $50-100,000 cars on commission.

5.???

Dave
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5. Because anyone with brain would want ot compare estimates and if the person is a thinking person, I probably can't get away with the overinflated pricing I usually charge. Why bother when there are still plenty of them out there who do not think?
 
weressl said:
5. Because anyone with brain would want ot compare estimates and if the person is a thinking person, I probably can't get away with the overinflated pricing I usually charge. Why bother when there are still plenty of them out there who do not think?
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This looks like English, but I need a translation.

Dave
 
translation:

customers are too smart to pay us a fair price, so we need to keep whoring ourselves for peanuts...
 
From a purely numbers standpoint...

Free Estimates to customers....
Actual cost to contractor (including labor, fuel, etc) = $100
Average Job Ticket = $500.00

You get 100 calls for estimates...go on all 100 calls. Your actual cost for all those free estimates is $10,000.

You close 50% of those calls (this is a generous number for this market)
50 jobs x $500 = $25,000
we will not deduct the $5,000 in "free estimates" from the jobs you got, just the $5000 from the jobs you didn't get.

$25,000 gross
-$5,000 "free estimate" costs
----------
$20,000 gross

if you charge a $30 dispatch fee...you get the same 100 calls, except only 50% are willing to pay the dispatch fee (this is a fairly accurate number based on experience)...of the calls you go to, you close 80% (again, an accurate number based on experience)
We will credit the dispatch fee to the customers who hire us.

40 jobs x $500 = $20,000 gross
10 x $30 = $3000 (this is the 10 estimates we gave that we didn't close)
-----------------
$23,000 gross.

oh, each tech can handle 3 calls a day total...so, if each example is over 5 days, we need...

100 / 5 = 20 calls a day / 3 calls per tech = 6.6 techs

50 / 5 = 10 calls a day / 3 calls per tech = 3.3 techs


so, i make more money, with the same pricing, with 1/2 as many techs...

tell me charging for estimates is bad for your business....


edit to add, this is for the resi/lt commercial service market that most guys are in. this is not for jobs that you have blue prints for, not for $50,000 additions, etc.....they are a different animal...
 
emahler said:
From a purely numbers standpoint...

Free Estimates to customers....
Actual cost to contractor (including labor, fuel, etc) = $100
Average Job Ticket = $500.00

You get 100 calls for estimates...go on all 100 calls. Your actual cost for all those free estimates is $10,000.

You close 50% of those calls (this is a generous number for this market)
50 jobs x $500 = $25,000
we will not deduct the $5,000 in "free estimates" from the jobs you got, just the $5000 from the jobs you didn't get.

$25,000 gross
-$5,000 "free estimate" costs
----------
$20,000 gross

if you charge a $30 dispatch fee...you get the same 100 calls, except only 50% are willing to pay the dispatch fee (this is a fairly accurate number based on experience)...of the calls you go to, you close 80% (again, an accurate number based on experience)
We will credit the dispatch fee to the customers who hire us.

40 jobs x $500 = $20,000 gross
10 x $30 = $3000 (this is the 10 estimates we gave that we didn't close)
-----------------
$23,000 gross.

oh, each tech can handle 3 calls a day total...so, if each example is over 5 days, we need...

100 / 5 = 20 calls a day / 3 calls per tech = 6.6 techs

50 / 5 = 10 calls a day / 3 calls per tech = 3.3 techs


so, i make more money, with the same pricing, with 1/2 as many techs...

tell me charging for estimates is bad for your business....


edit to add, this is for the resi/lt commercial service market that most guys are in. this is not for jobs that you have blue prints for, not for $50,000 additions, etc.....they are a different animal...
Click to expand...
check your math,10 x 30 = 300 not 3000
 
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