Charging for estimates is not working!

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weressl said:

The days of those who attempt to charge for estimate are numbered. They will not be competitive.
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Ever heard of....

Mister Sparky
Mr Electric
Benjiman Franklin Plumbing
One Hour Heating & Air Conditioning

You may want to contact them and let them know their days are numbered so they'll quit wasting their time expanding their franchises accross the U.S.

There's a successful plumber in my area. He's a member of PSI. He's been going strong for at least 20 years now. He has many service trucks on the road. I'm sure he'd like to know his days are numbered as well.
 
Rewire said:
My supply house has free delivery ,I am not stupid I know it is an embedded cost. I pass this cost on in my material markup. Its called free enterprise I don't understand getting hung up on the word "free".I started promoting "no extra charge for estimates" it does not say they are "free" but it does imply that their is no cost to the estimate.
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It probably has a greater effect on the small EC. I work alone so I cant afford to chase down work for nothing or roll it into the next job and call it cost of business. When you work alone there is no one else making you money so you have to make your billable hours in a day high as possible.
 
Rewire said:
My supply house has free delivery ,I am not stupid I know it is an embedded cost. I pass this cost on in my material markup. Its called free enterprise I don't understand getting hung up on the word "free".I started promoting "no extra charge for estimates" it does not say they are "free" but it does imply that their is no cost to the estimate.
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if you want to be truthful, say "no upfront charge for estimates.....but if you hire us, you'll pay for the other 2 estimates that didn't hire us....it's all good"
 
tonyou812 said:
It probably has a greater effect on the small EC. I work alone so I cant afford to chase down work for nothing or roll it into the next job and call it cost of business. When you work alone there is no one else making you money so you have to make your billable hours in a day high as possible.
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this goes back to the overhead per man hour vs. gross overhead debate....
 
Rewire said:
I started promoting "no extra charge for estimates" it does not say they are "free" but it does imply that their is no cost to the estimate.
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I just don't promote anything about estimates in my advertising. That way when they call I have the option of telling them they will not be charged for someone to come out to give an estimate. If I think they're going to wast my time I can mention a dispatch fee.

Instead of "Free Estimates" in my ads I prefer something like "Specializing In Customer Service".

People will still call and ask if we give free estimates.

This leaves me the option to charge or not charge.
 
Just a few weeks ago it was getting slow so I told my call taker no dispatch fees for estimates today.

Customer Calls: Do you give free estimates?

My Call Taker: For some jobs we do have a small dispatch fee to send an electrician out but right now we're running a special and waiving the dispatch fee so there is no charge to come out.

I like having that flexibility.
 
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aline said:
I just don't promote anything about estimates in my advertising. That way when they call I have the option of telling them they will not be charged for someone to come out to give an estimate. If I think they're going to wast my time I can mention a dispatch fee.

Instead of "Free Estimates" in my ads I prefer something like "Specializing In Customer Service".

People will still call and ask if we give free estimates.

This leaves me the option to charge or not charge.
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A guy just dropped off a check for 5 grand for work we did when he first called I thought he might be wasting my time he was asking alot of questions over the phone and I almost passed on the job but I went out gave him a price and did not here back for two weeks.long story short he called and apoligized for not getting back sooner and could we start the job. I never know who is going to be money and who is not. We do radio spots so that allows alot of flexability in our add copy. I thought about the"Specializing in Customer Service" but their are already several electricians using that to position in the market.
 
aline said:
My dispatch fee is usually $29. I've never charge more than $39 for a dispatch fee.

If this is going to shock the customer wait until they see my price for the work. :)

I would rather have them be shocked before I waste my time driving out to their home to give them an estimate.

If they're shocked by $29 I don't think I want them for a customer.
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I've never charged for an estimate but your post has me convinced to start. Your argument seems 100% on target. Thanks.
 
New electrical contractors would read in the yellow pages that some company was offering free estimate and were dumb enough to believe it just like the customers.


Awsome! Growler
 
I had a call today - "can you give me an estimate to change out 5 smoke detectors in my house? I aleady bought the new ones - just take the old ones down and install the new ones - how much?"

Thinking in my head - I charge $120/hr for me and my helper - this is very easy and 4 streets over from my house and we can stop on the way home. I say " well it's 120/hr. - What she says? can you do it any cheaper? well I say - I could do it for $100 but that is the minimun I could charge. (thinking it is a quick $100 in 15 minutes) She says - can you do it any cheaper than that? No I say - I'll call you back she says -
We all know how that job ended.
Mr sparky isn't getting this job - their quote probably would have been $250 - some guy probably did it for $50.

Charging for estimates doesn't work where I live - debate all you want - if it works for your company great - if it doesn't - you know why. you can't convince an EC they should be charging for estimates unless you make it a law.
 
Rewire said:
I thought about the"Specializing in Customer Service" but their are already several electricians using that to position in the market.
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How many are using free estimates to position themselves in the market?

In one phone book we're in we're the only one that doesn't have "Free Estimate" in the ad.

In another phone book including us there are ten ads that don't have "Free Estimate" in the ad. I also know at least four of these charge a dispatch fee.

When a customer calls and we ask where did you hear about us from, we know if they tell us the one phone book that has all the ads that say free estimates it's going to be harder to book the call if we charge a dispatch fee.
 
CopperTone said:
Charging for estimates doesn't work where I live - debate all you want - if it works for your company great - if it doesn't - you know why. you can't convince an EC they should be charging for estimates unless you make it a law.
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No matter where it is someone always say charging for estimates doesn't work where they live.

Some of what determines how successful you will be at charging a dispatch fee is where your leads are coming from.
Another thing that will determine this is how the call taker presents the dispatch fee over the phone.

It's not easy charging for estimates just like it's not easy getting jobs when you're not the cheapest contractor either.

Usually the more difficult something is the more rewarding it is as well.

You can always start out with a low dispatch fee of $5 to see how it goes. Many people will figure this is for your gas expense for comming out and won't mind paying it. $5 isn't much but it's better than nothing. If it's working for you increase it to $10. The cheapest of the cheap will not pay one penny for you to come out and give them an estimate, so if you want them for a customer you won't be able to charge anything to come out.

There's really no rule as to how much the dispatch fee needs to be or that you need to charge it everytime. You may have different dispatch fees based on how far away the job is and the size of the job you're giving an estimate on.

You're not charging it to cover all of the expense for going out and giving an estimate.
Again read this article: http://contractingbusiness.com/ar/cb_imp_13003/
 
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aline said:
So you do understand you pay for estimates.
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I pay for whomever is doing the job to make enough money that he will be able to continue what he is doing so he can do it for me or someone I know the next time we need him to do it. That would include whatever business expenses are included. I understand that there are direct costs associated with getting in a vehicle and going someplace and someone in business has to make a certain amount of money in a certain amount of time. I do understand some of that time the person may be pricing jobs.
 
Rewire said:
A guy just dropped off a check for 5 grand for work we did when he first called I thought he might be wasting my time he was asking alot of questions over the phone and I almost passed on the job but I went out gave him a price and did not here back for two weeks.long story short he called and apoligized for not getting back sooner and could we start the job. I never know who is going to be money and who is not. We do radio spots so that allows alot of flexability in our add copy. I thought about the"Specializing in Customer Service" but their are already several electricians using that to position in the market.
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Thank you for proving my point about only looking at the top line
 
bradleyelectric said:
I don't pay for estimates.
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bradleyelectric said:
I pay for whomever is doing the job to make enough money that he will be able to continue what he is doing so he can do it for me or someone I know the next time we need him to do it. That would include whatever business expenses are included. I understand that there are direct costs associated with getting in a vehicle and going someplace and someone in business has to make a certain amount of money in a certain amount of time. I do understand some of that time the person may be pricing jobs.
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I guess I don't understand this.
This just seems like a lot of wording to get around saying you pay for estimates.
The customer pays for everything. Including estimates, gas, trucks, advertising, tools, etc.
 
emahler said:
Thank you for proving my point about only looking at the top line
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I don't see how this made your point?I am not really sure what point you were trying to make. A year ago a contractor could pick and choose the work they accepted because their was more than enough,I know many in this area would po po the thought of doing a "small" job.Well I was raised never to pass up an oppertunity to make a dollar so I was more than happy to go after this work.I remember joking about my first year I did 365 one day jobs.If you understand geometric progression then you can understand the reward I am now reaping from those early days.So if you want to pass on work just pass it my way.
 
aline said:
The customer pays for everything. Including estimates, gas, trucks, advertising, tools, etc.
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That may be it though. Maybe the customer is not paying for everything, and at the end of the day, many EC's are taking these expenses out of their own pocket and are left with peanuts.
 
Rewire said:
I don't see how this made your point?I am not really sure what point you were trying to make. A year ago a contractor could pick and choose the work they accepted because their was more than enough,I know many in this area would po po the thought of doing a "small" job.Well I was raised never to pass up an oppertunity to make a dollar so I was more than happy to go after this work.I remember joking about my first year I did 365 one day jobs.If you understand geometric progression then you can understand the reward I am now reaping from those early days.So if you want to pass on work just pass it my way.
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my point is simple.....how many 'free estimates' were backed out of that $5000 check, before you paid for the jobs direct costs? how much money was left over from that $5000 check after everything was accounted for? did you make money? break even? lose money?

the fact that you don't understand this....that's my point...
 
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