Charging for estimates is not working!

[bradleyelectric]

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....

In other words you'd do best by being the cheapest.

 

[Dnkldorf]

In other words you'd do best by being the cheapest.

If that is your target market, price conscious consumers, than more power to ya.

If your "real" customer is more sold on service than price, than you lose with this customer.

Someone made a profit, and someone didn't....

 

[Dnkldorf]

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

I think you're comparing a service someone uses once in 10 yrs, to a service someone uses anywhere from 1 to possibly 24 and more times a year.

No?

 

[emahler]

I think you're comparing a service someone uses once in 10 yrs, to a service someone uses anywhere from 1 to possibly 24 and more times a year.

No?

just so everyone understands the apparent ground rules:

1) it is ok to compare electrical contracting to Wal-Mart (or any other retailer that sells on low prices)....

2) it is NOT ok to compare electrical contracting to Costco (or any other retailer that has a membership and sells on value, not price)....

Just keeping everyone apprised...carry on

 

[BryanMD]

I think you're comparing a service someone uses once in 10 yrs, to a service someone uses anywhere from 1 to possibly 24 and more times a year... No?

No. You were actually (if I'm following this right).

There is also the issue of market size. What works in a small town is entirely different from what needs to be done in a large metro area.

Another issue that comes up is too many using their "always been mechanically inclined and like to tinker and know a ton of guys who do it" brain to critique what is done to deal with the mechanically clueless OR challenged by changing a lamp OR new to the area and don't know a soul to call... that is the typical once in 5 year needs some work residential customer.

 

[Rewire]

just so everyone understands the apparent ground rules:

1) it is ok to compare electrical contracting to Wal-Mart (or any other retailer that sells on low prices)....

2) it is NOT ok to compare electrical contracting to Costco (or any other retailer that has a membership and sells on value, not price)....

Just keeping everyone apprised...carry on

Can we compare it to SAMS CLUB??

 

[growler]

There is also the issue of market size. What works in a small town is entirely different from what needs to be done in a large metro area.

I think that market size and location is where you are seeing the biggest difference in attitudes.

In this area you will see a world of difference as you start to leave the metro area.

 

[Dnkldorf]

No. You were actually (if I'm following this right).

There is also the issue of market size. What works in a small town is entirely different from what needs to be done in a large metro area.

Another issue that comes up is too many using their "always been mechanically inclined and like to tinker and know a ton of guys who do it" brain to critique what is done to deal with the mechanically clueless OR challenged by changing a lamp OR new to the area and don't know a soul to call... that is the typical once in 5 year needs some work residential customer.

This is quite true. In todays world you can take whatever number of reps...say once every 5 yrs, once every 7 years, 10 years...ect and kinda break down to identify who your market is. Who wants to purchase your product or service?

For instance, you can take a town of 100,000 homes and figure out how many calls based on your number is likely to possibly need an electrician every year. You can break that down to an average of how many are likely to hire someone they know, hire someone from the books, and even how many are likely to use the web.

You can look at zipcode data, and see average houshold income levels...everything.

Do a radius of 10 miles around you, 20 miles.....how far do you want to travel for work?


If your marketing your services based on "service" and not so much on "price", to a market area that is predominatley buying on "price", I would tend to believe your not going to get too much market share, and you probably wouldn't want that type of customer anyway.

However, if your target customers, have an average houshold income of $200K/yr, and they buy on service and proffesionalism, yoiu need to find them and attract them. But by numbers and elimination, you could see how small your market is becoming.

If someone is not buying your service, you're either not targeting properly, or there is no market for your service.

There is a market for both "no cost" estimates, and a market for "service charge" estimates.

It is up to you to find out who is who.

No?


IMOWM

 

[BryanMD]

This is quite true. In todays world you can take whatever number of reps...say once every 5 yrs, once every 7 years, 10 years...ect and kinda break down to identify who your market is. Who wants to purchase your product or service?

For instance, you can take a town of 100,000 homes and figure out how many calls based on your number is likely to possibly need an electrician every year. You can break that down to an average of how many are likely to hire someone they know, hire someone from the books, and even how many are likely to use the web.

And once you have those numbers calculate against the number of licensed EC's you are directly competing with... then allow for the number of sidejobbers and trunk slammers you are forced to compete with.

 

[emahler]

Can we compare it to SAMS CLUB??

Nope. They are like costco.

 

[Dnkldorf]

And once you have those numbers calculate against the number of licensed EC's you are directly competing with... then allow for the number of sidejobbers and trunk slammers you are forced to compete with.

Exactly. When you do some crunching, market share is dwindling pretty quick isn't it.

 

[aline]

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....

Actually we do send out flyers quite often and do have coupons and discounts listed in the flyers. So in reality asking them if they recieved one of our flyers in the mail is a ligitimate question. We also have coupons in the phone books and on our website so we could just as easily replace the flyer question with "Do you have one of our coupons from the phone book or did you see the coupons posted on our website?"

Having "Free Estimates" plastered all over your trucks and in your ads isn't lying to your customers?

When they call and ask "Do you give free estimates" and you say yes, are you lying to your customers?

We all know estimates are not free and the customer pays for them.

Do you tell your customers that you add the cost of their estimate plus the costs of the other free estimates that you didn't get into the pricing for their job?

Not charging a dispatch fee for coming out to give an estimate is easy just like selling the customer on using your company because you're the lowest price.

It's also the least rewarding.

I feel much better when a customer chooses me even though I have a dispatch fee and I'm not the lowest price. It tells me I'm doing something right with my marketing.

If I gave estimates that seemed more realistic to my customers I would be out of business.

 

[Mule]

Actually we do send out flyers quite often and do have coupons and discounts listed in the flyers. So in reality asking them if they recieved one of our flyers in the mail is a ligitimate question. We also have coupons in the phone books and on our website so we could just as easily replace the flyer question with "Do you have one of our coupons from the phone book or did you see the coupons posted on our website?"
Sorry I misread your previous post

Having "Free Estimates" plastered all over your trucks and in you ads isn't lying to your customers?
We dont plaster that, and we dont lie to our customers

When they call and ask "Do you give free estimates" and you say yes are you lying to your customers?
We tell our customers up front, the cost of the estimate will be figured in, but there is no obligation if they choose not to use us. We think that is being truthfull.

We all know estimates are not free and the customer pays for them.
This is true

Do you tell your customers that you add the cost of their estimate plus the costs of the other free estimates that you didn't get into the pricing for their job?

In truth I dont loose very many estimates, so I dont have to add the cost of other lost estimates in, and yes well tell the customers up front. They just fall over backwards with satisfaction and open up their billfold......

Not charging a dispatch fee for coming out to give an estimate is easy just like selling the customer on using your company because you're the lowest price.

We also tell our customers that if they are looking for the lowest price, they need to look elsewhere, this saves us those pesty unfruitfull estimates, we sell our selves on customer satifaction and being polite and courtesous, not being cheap

It's also the least rewarding.

I feel much better when a customer chooses me even though I have a dispatch fee and I'm not the lowest price. It tells me I'm doing something right with my marketing.
Good for you....!!

If I gave estimates that seemed more realistic to my customers I would be out of business.

I understand what your saying, because alot of customers are clueless of the cost, but sometimes it takes some encouragement from the contractor to sell it. I think that when you show up on the job, if the customer is serious about doing the work in the first place, they will make their decision not soley on price, its the whole package. If they like your attitude, honesty, and your presentation, youve got the job, even if your a little high. If not.... you didnt want the job anyway

 

[Dnkldorf]

I think that when you show up on the job, if the customer is serious about doing the work in the first place, they will make their decision not soley on price, its the whole package. If they like your attitude, honesty, and your presentation, youve got the job, even if your a little high.

A box of dog treats and a bag of dum-dums on the truck seem to work pretty effectively as an ice breaker.

 

[aline]

A box of dog treats and a bag of dum-dums on the truck seem to work pretty effectively as an ice breaker.

I like the idea of free drinks better. After you get them hammered then present them with the proposal to sign.

 

[aline]

Mule,

I didn't mean to make it sound like I was refering to you.
I really don't know how you advertise and interact with your customers.
My comments weren't meant to be directed at you although it looke like it.

 

[weressl]

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.

So could you explain to me why should there be a difference between a project funded from my tax$'s and one that I pay directly out-of pocket?

Beaten to death means; all was said and we will just repeat ourselves. I agreed to disagree, perhaps you didn't.

Just as another poster enumerated what 'other' expenses he does not charge, giving the purchaser an idea what the cost will be is just an honest way of dealing with the customer. An estimate is NOT a bid, but an honest assesment of the job without saying that it can not be lower, or higher due to UNFORSEABLE reasons.

 

[weressl]

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.

Just as brokers are required to state when selling stocks: past performance does not guarantee future outcome.

Business models change, continually, to stay ahead of the competition.

 

[Mule]

A box of dog treats and a bag of dum-dums on the truck seem to work pretty effectively as an ice breaker.

Ha Ha that's pretty funny, Im already the dum-dum so I dont have to buy those !!!

Mule,

I didn't mean to make it sound like I was refering to you.
I really don't know how you advertise and interact with your customers.
My comments weren't meant to be directed at you although it looke like it.

No problem........I think everyone just has to do what they think is best, and different circumstances beg different solutions. For me, I think my customers are so used to not paying for a estimate, they dont want any commitments until they are ready to do so...so customer satisfaction has several elements and that "so called" free estimate is one of them.....

 

[aline]

So could you explain to me why should there be a difference between a project funded from my tax$'s and one that I pay directly out-of pocket?

You answered this yourself with the quote below. I can charge a dispatch fee for going out and providing estimates to homeowners and business owners. Not everyone will be willing to pay it but some will. A lot of homeowners want estimates for jobs that are $1,000 or less. How many state and federal projects are put out for bid that are $1,000 or less?

Is anyone aware that they actually have to PAY for the privilege to bid on a public or any state or federal project?

Beaten to death means; all was said and we will just repeat ourselves. I agreed to disagree, perhaps you didn't.

You know there may be some new members that just joined the forum and have fresh ideas on the subject. Some feel there is more to discuss without repeating themselves.
With the high post count this thread has received it seems that some would still like to discuss this. A lot of subjects on this forum have been discussed over and over again. This isn't the only one. I personally don't care about whether someone installs outlets with the ground facing up, down or sideways so I don't bother to read the thread or respond to it but some do. If people weren't interested in this subject there wouldn't be any posts and this thread would have died long ago. If you don't want to run the risk of repeating yourself don't post.

As an engineer I'm not sure why you have such an interest in this thread.
Are you planning on starting an electrical contracting company that specializes in small jobs, service and repairs for commercial and residential? That's what this topic is about.
It's not about state and federal projects at all. Although it would be nice if they had to pay us for the privilege of receiving an estimate.