Charging for estimates is not working!

[bradleyelectric]

The customer pays for everything. Including estimates, gas, trucks, advertising, tools, etc.

That's what I said!!!! The "I don't pay for estimates." was meant more along the lines of I don't invite people over and pay them to find out who is the cheapest. I do believe in charging a service charge for going to someones house to tell them what needs to be done.

 

[aline]

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.

I never know who is going to be money and who is not either but the dispatch fee helps determine this.

If I'm busy I want to reduce my chances of wasting my time.
If I'm not busy I'll increase my chances by lowering the dispatch fee or not charging one.

How do you know the guy wouldn't have agreed to a disptach fee?

I have calls like the one you describe where I think they might be wasting my time but they agree to the dispatch fee. I never know who's going to accept the dispatch fee and who's not. Overall though the people that won't accept the dispatch fee are more likely to wast my time.

 

[Rewire]

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...

I do understand the difference between "profit' and "profit margin" But what you can't seem to grasp is if the top line is 0 then it will be a given your bottom line will be 0 ...thats my point....

 

[aline]

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.

Those EC's are different.
They're the ones that have NO Overhead!

 

[Rewire]

I never know who is going to be money and who is not either but the dispatch fee helps determine this.

If I'm busy I want to reduce my chances of wasting my time.
If I'm not busy I'll increase my chances by lowering the dispatch fee or not charging one.

How do you know the guy wouldn't have agreed to a disptach fee?

I have calls like the one you describe where I think they might be wasting my time but they agree to the dispatch fee. I never know who's going to accept the dispatch fee and who's not. Overall though the people that won't accept the dispatch fee are more likely to wast my time.

A year ago I would have agreed but I think we are going to be in a whole different arena these next few years,the Ford dealership just closed its doors yesterday laying off 20 people they were a customer of mine as well as a few of the employees.i dont see the phone ringing off the hook as it has in the past the pencil is going to need to be sharper as it becomes more competitive for the work that is available and until I get a crystal ball I am going after every call.

 

[bradleyelectric]

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.

That is what happens very often I believe. The wife or a previous employer provides the health insurance, retirement and other benefits and the self employed electrican sees what the rest of the self employed electricians are doing and figures that's how the business is and doesn't believe it can be better.

If he tries to make it better he doesn't have a strong belief in the new idea and therefore doesn't have a positive result. Instead of finding out why it didn't work and trying a different presentation for the new idea he says "it doesn't work in my area, there isn't enough money in that, or it's to much of a pain."

Then he says that might work in some area, that only works in high population areas, the guy at HD in my area will tell people I'm ripping them off if I do that or any number of excuses as to why something better wont work in the face of others are doing it.

Than we always have people that aren't even the feild explaining how or why you should do something.

 

[tonyou812]

That is what happens very often I believe. The wife or a previous employer provides the health insurance, retirement and other benefits and the self employed electrican sees what the rest of the self employed electricians are doing and figures that's how the business is and doesn't believe it can be better.

If he tries to make it better he doesn't have a strong belief in the new idea and therefore doesn't have a positive result. Instead of finding out why it didn't work and trying a different presentation for the new idea he says "it doesn't work in my area, there isn't enough money in that, or it's to much of a pain."

How do you manage all that at 65 per hour?

Then he says that might work in some area, that only works in high population areas, the guy at HD in my area will tell people I'm ripping them off if I do that or any number of excuses as to why something better wont work in the face of others are doing it.

Than we always have people that aren't even the feild explaining how or why you should do something.

That's kind of what i think too. Especially if they say they charge 55-65 hr. I dont care where you live in the country if your not gonna include any type 401k or retirement in your figures you might as well go dig the hole now. And I'm not even gonna bring up health care cost.
I personally dont need it I have great package with my wife but I darn well know that if I want to get anyone good to work for me their are probably not going to stick around to long with out basic benie package.

 

[aline]

A year ago I would have agreed but I think we are going to be in a whole different arena these next few years,the Ford dealership just closed its doors yesterday laying off 20 people they were a customer of mine as well as a few of the employees.i dont see the phone ringing off the hook as it has in the past the pencil is going to need to be sharper as it becomes more competitive for the work that is available and until I get a crystal ball I am going after every call.

I agree.
If times get bad enough and I get desperate I can drop the dispatch fee if I want.
There's nothing that says once I start charging a dispatch fee I have to always charge one.
I do flat rate pricing as much as possible but I still do T&M as well.

 

[tonyou812]

A year ago I would have agreed but I think we are going to be in a whole different arena these next few years,the Ford dealership just closed its doors yesterday laying off 20 people they were a customer of mine as well as a few of the employees.i dont see the phone ringing off the hook as it has in the past the pencil is going to need to be sharper as it becomes more competitive for the work that is available and until I get a crystal ball I am going after every call.

true, I agree on that.

 

[aline]

Anyone heard of Angie's List? http://www.angieslist.com/Angieslist/

People pay Angie's List to find contractors for their projects.

Why would anyone pay for such a service when there are plenty of these sites where people can do this for free?

I love it when a customer calls and when asked where they heard about us from they say Angie's List.

They've already spent money to find us on Angie's List so the dispatch fee doesn't phase them. They've had the bad experience with contractors and are willing to pay to find someone that will provide better service.

You want to try to have all A's on your report card except for price.
If your getting an A on price you're not charging enough.

 

[bradleyelectric]

I agree.
If times get bad enough and I get desperate I can drop the dispatch fee if I want.
There's nothing that says once I start charging a dispatch fee I have to always charge one.
I do flat rate pricing as much as possible but I still do T&M as well.

What would make you stop believing in a dispatch fee? Why would you still do T&M?

 

[CopperTone]

What law dictated your $120/hr rate?

labor rate for me and apprentice + labor burden + overhead + profit then round up to the nearest whole dollar amount.

charge a dispatch fee if you want, charge an estimate fee if you want, I just know I can't because all I end up hearing is the dial tone. There are so many guys with trucks around where I live working for themselves running around for a little over wages - I actually have been getting out of that rat race and going toward commercial jobs valued at 10-200k - I land more commercial public bid jobs these days than any residential.
In Massachusetts you have to be certified with the state to bid on certain public jobs. The certification process weeds out a lot of companies(companies that may not charge enough or run a shady business), however this economy is so bad now that even these certified companies are low balling jobs.

 

[aline]

What would make you stop believing in a dispatch fee? Why would you still do T&M?

I don't ever stop believing in a dispatch fee but if times are tough and I don't have any work I'll do what it takes to book the call.

Some of my customer's are the government and commercial that only want service calls billed out T&M. I have to break out labor and materials for them. When I give them fixed bids they still want the labor and materials seperate.

I have a choice I either do this or I don't work for them it's as simple as that.

I have steady work for the government. For service calls they don't call anyone else but me. They pay me each day with a credit card. They understand that they get charged for travel time so they try to have me do other work besides what they called me out for while I'm there. I go out for an hour job and end up spending the whole day there.

 

[jmsbrush]

We are not talking about state or federal projects.

Maybe you felt it was beat to death but some of us still like to discuss this stuff. If you don't there's no need to view it and respond.

Well said:smile:

 

[aline]

"How to salvage a call when the customer doesn't accept the dispatch fee"

Customer: How much would it be to have a couple of outlets installed in my garage?

Call Taker: There are too many variables for us to be able to quote a price for you over the phone. May I ask where you heard about us from?

Customer: The phone book?

Call Taker: Did you get our flyer in the mail? (You really didn't send them a flyer.)

Customer: No.

Call Taker: That's ok our electrician can let you know about the flyer and the discounts offered when he arrives. When would you like to schedule the appointment?

Customer: Do you give free estimates?

Call Taker: We have a $29 dispatch fee to send an electrician out to evaluate your electrical system, evaluate the work you're requesting and quote you a price in writing.

Customer: I'm not paying $29 just to have someone come out and give me an estimate.

Call Taker: You know, the flyer we sent out has a coupon in it for $30 off any service or repair. Since you did not recieve one in the mail I will send one out with the electrician that can be applied to the dispatch fee so you won't have to pay anything for him to come out. Will that work for you?

This may not always work but if you really don't want to lose the call because they didn't like the dispatch fee it doesn't hurt to try it. Mentioning the flyer sets the electrician up for selling additional items while there.

Customer: What's the flyer and discounts they mentioned on the phone?

Electrician at Customer's Home: I notice you don't have any GFCI receptacles in you're kitchen and bathroom where required by code. We have a special discount going right now for installing GFCI receptacles while in a customer's home doing other work. Since I'm already here providing you with an estimate I can offer you this discount now even if you decide not to use us for the job I'm estimating today. Normally this would be the price to install the GFCI receptacles if we made a trip out just to do this but since we're already here we can install them for this price.


This is a way to leave with some money instead of nothing after giving a free estimate. Just because you're out there giving a free estimate doesn't mean you can't sell something while there.

 

[celtic]

"How to salvage a call when the customer doesn't accept the dispatch fee"

Nice script

 

[CopperTone]

"How to salvage a call when the customer doesn't accept the dispatch fee"

Customer: How much would it be to have a couple of outlets installed in my garage?

Call Taker: There are too many variables for us to be able to quote a price for you over the phone. May I ask where you heard about us from?

Customer: The phone book?

Call Taker: Did you get our flyer in the mail? (You really didn't send them a flyer.)

Customer: No.

Call Taker: That's ok our electrician can let you know about the flyer and the discounts offered when he arrives. When would you like to schedule the appointment?

Customer: Do you give free estimates?

Call Taker: We have a $29 dispatch fee to send an electrician out to evaluate your electrical system, evaluate the work you're requesting and quote you a price in writing.

Customer: I'm not paying $29 just to have someone come out and give me an estimate.

Call Taker: You know, the flyer we sent out has a coupon in it for $30 off any service or repair. Since you did not recieve one in the mail I will send one out with the electrician that can be applied to the dispatch fee so you won't have to pay anything for him to come out. Will that work for you?

This may not always work but if you really don't want to lose the call because they didn't like the dispatch fee it doesn't hurt to try it. Mentioning the flyer sets the electrician up for selling additional items while there.

Customer: What's the flyer and discounts they mentioned on the phone?

Electrician at Customer's Home: I notice you don't have any GFCI receptacles in you're kitchen and bathroom where required by code. We have a special discount going right now for installing GFCI receptacles while in a customer's home doing other work. Since I'm already here providing you with an estimate I can offer you this discount now even if you decide not to use us for the job I'm estimating today. Normally this would be the price to install the GFCI receptacles if we made a trip out just to do this but since we're already here we can install them for this price.


This is a way to leave with some money instead of nothing after giving a free estimate. Just because you're out there giving a free estimate doesn't mean you can't sell something while there.

Good point - even if I don't use that tactic - it seems like good salesmanship. Now, are your electricians that good when they get to the house?

 

[Sparky555]

"How to salvage a call when the customer doesn't accept the dispatch fee"

Customer: How much would it be to have a couple of outlets installed in my garage?

Call Taker: There are too many variables for us to be able to quote a price for you over the phone. May I ask where you heard about us from?

Customer: The phone book?

Call Taker: Did you get our flyer in the mail? (You really didn't send them a flyer.)

Customer: No.

Call Taker: That's ok our electrician can let you know about the flyer and the discounts offered when he arrives. When would you like to schedule the appointment?

Customer: Do you give free estimates?

Call Taker: We have a $29 dispatch fee to send an electrician out to evaluate your electrical system, evaluate the work you're requesting and quote you a price in writing.

Customer: I'm not paying $29 just to have someone come out and give me an estimate.

Call Taker: You know, the flyer we sent out has a coupon in it for $30 off any service or repair. Since you did not recieve one in the mail I will send one out with the electrician that can be applied to the dispatch fee so you won't have to pay anything for him to come out. Will that work for you?

This may not always work but if you really don't want to lose the call because they didn't like the dispatch fee it doesn't hurt to try it. Mentioning the flyer sets the electrician up for selling additional items while there.

Customer: What's the flyer and discounts they mentioned on the phone?

Electrician at Customer's Home: I notice you don't have any GFCI receptacles in you're kitchen and bathroom where required by code. We have a special discount going right now for installing GFCI receptacles while in a customer's home doing other work. Since I'm already here providing you with an estimate I can offer you this discount now even if you decide not to use us for the job I'm estimating today. Normally this would be the price to install the GFCI receptacles if we made a trip out just to do this but since we're already here we can install them for this price.


This is a way to leave with some money instead of nothing after giving a free estimate. Just because you're out there giving a free estimate doesn't mean you can't sell something while there.

It's a good script, but I'm curious if it actually sells GFCIs (or whatever) to anyone who wants a free estimate and doesn't approve your quote...or does it end up No Thanks on the quote and No Thanks on the GFCIs.

 

[Mule]

"How to salvage a call when the customer doesn't accept the dispatch fee"

Customer: How much would it be to have a couple of outlets installed in my garage?

Call Taker: There are too many variables for us to be able to quote a price for you over the phone. May I ask where you heard about us from?

Customer: The phone book?

Call Taker: Did you get our flyer in the mail? (You really didn't send them a flyer.)

Customer: No.

Call Taker: That's ok our electrician can let you know about the flyer and the discounts offered when he arrives. When would you like to schedule the appointment?

Customer: Do you give free estimates?

Call Taker: We have a $29 dispatch fee to send an electrician out to evaluate your electrical system, evaluate the work you're requesting and quote you a price in writing.

Customer: I'm not paying $29 just to have someone come out and give me an estimate.

Call Taker: You know, the flyer we sent out has a coupon in it for $30 off any service or repair. Since you did not recieve one in the mail I will send one out with the electrician that can be applied to the dispatch fee so you won't have to pay anything for him to come out. Will that work for you?

This may not always work but if you really don't want to lose the call because they didn't like the dispatch fee it doesn't hurt to try it. Mentioning the flyer sets the electrician up for selling additional items while there.

Customer: What's the flyer and discounts they mentioned on the phone?

Electrician at Customer's Home: I notice you don't have any GFCI receptacles in you're kitchen and bathroom where required by code. We have a special discount going right now for installing GFCI receptacles while in a customer's home doing other work. Since I'm already here providing you with an estimate I can offer you this discount now even if you decide not to use us for the job I'm estimating today. Normally this would be the price to install the GFCI receptacles if we made a trip out just to do this but since we're already here we can install them for this price.


This is a way to leave with some money instead of nothing after giving a free estimate. Just because you're out there giving a free estimate doesn't mean you can't sell something while there.

You know, its sounds very creative, but I dont like lying to my customers. I know when I detect slick sales talk, it turns me off real quick.....

In truth the arguement to charge or not to charge for estimates has merit on both sides. However, Im not convinced yet that a dispatch fee is the answer, to recovering the lost cost of a un-fruitfull estimate.....I think the truth is that if your typicaly too high on your estimates, you will loose money making free estimates, on the contrary, if your estimates seem more realistic to the customer, you'll get the job, AND your estimate cost....

 

[zappy]

I am a lurker, but I just have to respond to this thread. Especially, the idea of tracking. We had doubts about the economy and our $29 estimate fee so we checked. I personally called every person that call our company but did not schedule because of the estimate fee (you can only do this if you track your calls). 100% of the miss leads had gotten multiple estimates (average 4) and over 50% of the callers never got the work done BY ANYONE! Those are leads we can all afford to lose! Stick with it Zappy!

Thanks.What about costco,they charge you to shop there.I pay because it saves me money.