Free Estimate Questions

[Rewire]

I listened to an AmWay sales pitch years ago the the premise was sound the methodolagy logical it had success stories to back it up.We must all be fools for not selling AmWay.

If you are going to charge a fee for an estimate then you should always charge that fee.
If you do not charge a fee then you should never charge a fee.

Their is logic in charging their is also logic in not charging but a successful business will be consistant in its method.

 

[Dnkldorf]

I listened to an AmWay sales pitch years ago the the premise was sound the methodolagy logical it had success stories to back it up.We must all be fools for not selling AmWay.

If you are going to charge a fee for an estimate then you should always charge that fee.
If you do not charge a fee then you should never charge a fee.

Their is logic in charging their is also logic in not charging but a successful business will be consistant in its method.

Standing O

 

[ohm]

I listened to an AmWay sales pitch years ago the the premise was sound the methodolagy logical it had success stories to back it up.We must all be fools for not selling AmWay.

If you are going to charge a fee for an estimate then you should always charge that fee.
If you do not charge a fee then you should never charge a fee.

Their is logic in charging their is also logic in not charging but a successful business will be consistant in its method.

Great point rewire. 99% of my work is referal. Everyone knows what I charged their buddy and war would break out if I didn't do the same for them.

Because of my high referal rate and virtually no advertising (<$100/yr) 99% of my phone calls result in work, with hardly anyone asking for an estimate.

Most of my work is within 10 miles of my shop.

 

[active1]

Nothing.

Free estimates aren't really free.
Nothing is free the only question is which customer pays for it.
If you go out and reset a GFCI for a customer and don't charge that customer for it then another customer has to pay for it.

Some say you're being dishonest if you charge a dispatch fee and then tell the customer you'll wave it if they accept your price for the job.
I could charge the same price for the job wether or not I waive the dispatch fee. Waiving the dispatch fee gives them an incentive to have me do the job while I'm there.

I don't think it's any more dishonest than telling a customer estimates are free then adding it into the bid.

Do you advertise that gasoline, insurance, licensing, your meals, your mortgage, etc. is free?

I've never seen this in anyone's advertising.

Or, it just comes out of the owners income.

 

[aline]

If you are going to charge a fee for an estimate then you should always charge that fee.
If you do not charge a fee then you should never charge a fee.

Their is logic in charging their is also logic in not charging but a successful business will be consistant in its method.

Can you explain why?
Do you have anything to backup this statement?

I've seen many businesses offer promotions where they offer some type of item for free.
Usually when you purchase some other item.

They don't always offer these free items.
They do it when sales are slow and want to generate more business.

Lately I've seen Best Buy advertising free delivery and set up of TVs purchased from them.
Usually they charge for this service but with the slow economy I see them running promotions offering this service for free.

Are you saying these companies should never offer these types of promotions?
If they usually charge for these items they should always charge for these items?

I use a dispatch fee as a regulator and to weed out calls I don't want.
I may vary my dispatch fee depending on how busy I am.
If I'm really slow I may not charge one at all.
The size and type of job will also determine whether or not I charge a dispatch fee.


Here's a link about dispatch fees.
http://contractingbusiness.com/ar/cb_imp_13003/

 

[aline]

Great point rewire. 99% of my work is referal. Everyone knows what I charged their buddy and war would break out if I didn't do the same for them.

Because of my high referal rate and virtually no advertising (<$100/yr) 99% of my phone calls result in work, with hardly anyone asking for an estimate.

Most of my work is within 10 miles of my shop.

I don't charge a dispatch fee for referals or previous customers.

How do I know if the caller is a referal?

Every call that comes in we ask where they heard about us from so we can track how the return on our advertising and marketing investments. This is done before anything is mentioned about a dispatch fee. The dispatch fee is something we mention towards the end of the call after we've gotten all the other information about the job.

 

[aline]

Our estimates never come with advice,a good call screener can weed out the lookyloos.

So what does your call screener tell the lookyloos?
Sorry, but we don't give free estimates to lookyloos?
If you advertise free estimates aren't you kind of obligated to give free esitmates to everyone including the lookyloos?

All I have to do is mention the dispatch fee and the lookyloos looky elswhere.

 

[aline]

Because of my high referal rate and virtually no advertising (<$100/yr) 99% of my phone calls result in work, with hardly anyone asking for an estimate.

How much growth will this system provide?

If you're trying to build a service business with multiple trucks and employees so you no longer have to work out in the field and can go on vacation, while your business still operates and generates cash flow while your gone, I don't think relying on referals is going to work all that well.

Charging a dispatch fee for estimates is going to depend on the type of business you want. You're not going to be able to charge a dispatch fee for large commercial projects that are put out to bid.

 

[ohm]

How much growth will this system provide?

If you're trying to build a service business with multiple trucks and employees so you no longer have to work out in the field and can go on vacation, while your business still operates and generates cash flow while your gone, I don't think relying on referals is going to work all that well.

Charging a dispatch fee for estimates is going to depend on the type of business you want. You're not going to be able to charge a dispatch fee for large commercial projects that are put out to bid.

We all do what meets our objectives. My method meets mine but I'm satisfied with moderate growth. I've been in the fast lane and didn't like it.

 

[Rewire]

Can you explain why?
Do you have anything to backup this statement?

This is basic stuff you should already know but I will explain with this story,
I went to a new barber he did an exellent job he was a master with the scissors,did the entire haircut with just scissors never once resorting to the clippers he even insisted on washing my hair before cutting telling me it made cutting easier his assistant even brought me a cup of coffee and kept it full,in all the expieriece was delightful so I made another appointment

On the next visit things were slightly different he only used the scissors part of the time and resorted to the clippers about 50% of the haircut and did not even mention washing my hair and although his assistant brought me coffee she never returned,but the haircut was still excellent

On my third visit he once again washed my hair and used the scissors exclusively but his assistant did not bring me coffee

As I left something inside of me decided not to return ,it was not the haircut for it was excellent and the barber was a likeable guy what it was is simple :

There was absolutly no consistancy in the experience

I've seen many businesses offer promotions where they offer some type of item for free.
Usually when you purchase some other item.

They don't always offer these free items.
They do it when sales are slow and want to generate more business.

Lately I've seen Best Buy advertising free delivery and set up of TVs purchased from them.
Usually they charge for this service but with the slow economy I see them running promotions offering this service for free.

Are you saying these companies should never offer these types of promotions?
If they usually charge for these items they should always charge for these items?

that is exactly what i am saying

I use a dispatch fee as a regulator and to weed out calls I don't want.
I may vary my dispatch fee depending on how busy I am.
If I'm really slow I may not charge one at all.
The size and type of job will also determine whether or not I charge a dispatch fee.

you lack consistancy in the expirience you deliver to your customers,you create an experience then you take it away ,you are arbitrarily changing the experience for the customer and by doing so you are depriving them of the experience of making a decision to patronize your business

" Burnt Child" syndrome is where a child is alternatly punished and rewarded for the same behavior this kind of parenting can be disasterous for the child because they never know what to expect or how to act it can also be disasterous for the customer,the child has no choice but to stay with the parent but the customer can and will go somewere else.

What you do in your business is not nearly as important as doing it the same way each and every time

 

[Rewire]

So what does your call screener tell the lookyloos?
Sorry, but we don't give free estimates to lookyloos?

This information is only available to our franchisees

If you advertise free estimates aren't you kind of obligated to give free esitmates to everyone including the lookyloos?

we don't advertise free estimates

All I have to do is mention the dispatch fee and the lookyloos looky elswhere.

and probably several paying customers along with their friends ,family,coworkers,neighbors ,coffeehose waitress.....

 

[emahler]

This is basic stuff you should already know but I will explain with this story,
I went to a new barber he did an exellent job he was a master with the scissors,did the entire haircut with just scissors never once resorting to the clippers he even insisted on washing my hair before cutting telling me it made cutting easier his assistant even brought me a cup of coffee and kept it full,in all the expieriece was delightful so I made another appointment

On the next visit things were slightly different he only used the scissors part of the time and resorted to the clippers about 50% of the haircut and did not even mention washing my hair and although his assistant brought me coffee she never returned,but the haircut was still excellent

On my third visit he once again washed my hair and used the scissors exclusively but his assistant did not bring me coffee

As I left something inside of me decided not to return ,it was not the haircut for it was excellent and the barber was a likeable guy what it was is simple :

There was absolutly no consistancy in the experience


that is exactly what i am saying
you lack consistancy in the expirience you deliver to your customers,you create an experience then you take it away ,you are arbitrarily changing the experience for the customer and by doing so you are depriving them of the experience of making a decision to patronize your business

" Burnt Child" syndrome is where a child is alternatly punished and rewarded for the same behavior this kind of parenting can be disasterous for the child because they never know what to expect or how to act it can also be disasterous for the customer,the child has no choice but to stay with the parent but the customer can and will go somewere else.

What you do in your business is not nearly as important as doing it the same way each and every time

what are you talking about? if someone calls for the 1st time, and they get told about a dispatch fee, they agree and then they get our "service"...the next time they call they don't get the dispatch fee because they are a repeat customer...but they still get our "service"...

i don't think you understand how Aline, or thousands of other contractors, use the dispatch fee...

the better illustration would be to use your barber analogy...except the 1st time you had to pay $15 to reserve a spot with him...so you do...and you get the service you write about on your 1st visit...

and the 2nd time, they waive the $15 reservation fee....but you still get the same service as the 1st time...

so you tell your friend to go there...he calls...says you referred him...so they waive the reservation fee...and he still gets the same service as the 1st time...

then a stranger calls...gets told about the $15 reservation fee...agrees, and gets the same service you did the 1st time...

the key is in the consistency of the service provided...not in the reservation fee...

you need better business books...

 

[bradleyelectric]

This is basic stuff you should already know but I will explain with this story,
I went to a new barber he did an exellent job he was a master with the scissors,did the entire haircut with just scissors never once resorting to the clippers he even insisted on washing my hair before cutting telling me it made cutting easier his assistant even brought me a cup of coffee and kept it full,in all the expieriece was delightful so I made another appointment

On the next visit things were slightly different he only used the scissors part of the time and resorted to the clippers about 50% of the haircut and did not even mention washing my hair and although his assistant brought me coffee she never returned,but the haircut was still excellent

On my third visit he once again washed my hair and used the scissors exclusively but his assistant did not bring me coffee

As I left something inside of me decided not to return ,it was not the haircut for it was excellent and the barber was a likeable guy what it was is simple :

There was absolutly no consistancy in the experience


that is exactly what i am saying
you lack consistancy in the expirience you deliver to your customers,you create an experience then you take it away ,you are arbitrarily changing the experience for the customer and by doing so you are depriving them of the experience of making a decision to patronize your business

" Burnt Child" syndrome is where a child is alternatly punished and rewarded for the same behavior this kind of parenting can be disasterous for the child because they never know what to expect or how to act it can also be disasterous for the customer,the child has no choice but to stay with the parent but the customer can and will go somewere else.

What you do in your business is not nearly as important as doing it the same way each and every time

I believe this is a copywrited story. I also believe it is a bad analogy for the situation.

 

[Dnkldorf]

If I sent a tech out to do a 200 amp service upgrade, and he finishes in 6 hrs.

I then send him on 2 estimates, to make up the rest of the day.

How do these estimates cost me $150?

 

[emahler]

I believe this is a copywrited story. I also believe it is a bad analogy for the situation.

please, for the last time, would you stop letting facts get in the way of a good story

 

[emahler]

If I sent a tech out to do a 200 amp service upgrade, and he finishes in 6 hrs.

I then send him on 2 estimates, to make up the rest of the day.

How do these estimates cost me $150?

unless you miraculously have found employees willing to work for nothing, here is how it may cost you $150 for those 2 estimates...

A good resi service tech (who is capable of giving the estimates and selling the jobs) will cost you (in my area) about $40-45/hr including benefits.

let's say you spend $1000/month in advertising...and that advertising generates 50 estimates a month...giving you a cost of $20/estimate...

so we are already at a cost of $60-$65 for each of those estimates.

add in the truck, the gas, the office overhead, etc...and you are easily up to $75/hr real cost for each of those estimates...

how's that explanation?

 

[aline]

Originally Posted by aline
So what does your call screener tell the lookyloos?
Sorry, but we don't give free estimates to lookyloos?

This information is only available to our franchisees.

Are you a franchise?

All I have to do is mention the dispatch fee and the lookyloos looky elswhere.

and probably several paying customers along with their friends ,family,coworkers,neighbors ,coffeehose waitress.....

How is this any different then what you tell the lookyloos to get out of wasting your time going out to give a free estimate?

By the way I've read the e-myth book too.

I've also heard that businesses should be flexible and be able to adapt to the changing times.
The free estimate thing has been around for a long time.
Long before this;

Maybe it's time for a change.

This is what I'm really charging for not the estimate.
If I was charging for the estimate I would call it something like an in-home consultation and charge something like a $100 or more like Best Buy does.

I got a call from a realtor that had a list from a home inpspector and she wanted someone to go out and look at it to make sure all the things on the list really did need to be done and how much it would cost to complete these items. Of course she wanted a free estimate for this.

I quoted her a price for a home electrical inspection.
She asked if the items on the list didn't really need to be done if there would be no charge for the inspection.

 

[aline]

This is basic stuff you should already know but I will explain with this story,
I went to a new barber he did an exellent job he was a master with the scissors,did the entire haircut with just scissors never once resorting to the clippers he even insisted on washing my hair before cutting telling me it made cutting easier his assistant even brought me a cup of coffee and kept it full,in all the expieriece was delightful so I made another appointment

On the next visit things were slightly different he only used the scissors part of the time and resorted to the clippers about 50% of the haircut and did not even mention washing my hair and although his assistant brought me coffee she never returned,but the haircut was still excellent

On my third visit he once again washed my hair and used the scissors exclusively but his assistant did not bring me coffee

As I left something inside of me decided not to return ,it was not the haircut for it was excellent and the barber was a likeable guy what it was is simple :

There was absolutly no consistancy in the experience


that is exactly what i am saying
you lack consistancy in the expirience you deliver to your customers,you create an experience then you take it away ,you are arbitrarily changing the experience for the customer and by doing so you are depriving them of the experience of making a decision to patronize your business

So if your local gas station gave you free gas one day you would quit going there because they didn't give you free gas everyday?

If the assistant one time brought you not only coffee but a donut as well you would quit going there because the assistant didn't bring you coffee and a donut everytime?

We're not even talking about repeat customer's when talking about my dispatch fee anyway. We're talking about first time callers that have never used our services before.
They don't have a previous experience with us to compare it to.

 

[Dnkldorf]

how's that explanation?

If all that is figured into your billable hour rate, and you included averaging only 4 billable hours a day to make your numbers.....

I billed 6 hrs.....still paying the guys for 8.....so anything they do after 4 hrs is gravy.

In fact, my salary is included in their billable hrs, so is the company truck and the gas in it.

I could leave the office, go do an estimate or two, and it wouldn't cost me a dime more than I already included in my billable hrs rate.

 

[Dnkldorf]

We're not even talking about repeat customer's when talking about my dispatch fee anyway. We're talking about first time callers that have never used our services before.
They don't have a previous experience with us to compare it to.

You need help selling yourself to them......sorry.


If you go on half as much of these disaster/cheap bastages calls as you post, I would think you need to train your CSR a littlle more. Anyone after doing this line of work for some time, should be able to weed out all the yo-yo's in the world in a couple minute phone call. You have a trained CSR, and a dispatch fee you use to "weed" out tirekickers, yo-yo's and DIY's looking for price checks..........but your still going out on them?????

I don't mean anything by this, and don't take offense, but this is what I read from you.

Are you marketting to the wrong area?