Charging for estimates is not working!

[Rewire]

It would, with the caveat that your closing rate would increase dramatically. So the amount being apportioned to each customer would be minimal as a percentage.

The problem is a distinction needs to be made between an increase in closing rate and an increase in jobs,If I only go out to look at one job and I get it I have a 100% closing rate
but if I go out on 4 jobs and get 2 I amdown to 50% closing rate but I have more jobs.

 

[Dnkldorf]

Do either one of you remember this [ thread ] ?

Les, you said you charge $150?

 

[emahler]

Do either one of you remember this [ thread ] ?

Les, you said you charge $150?

That is the min charge for a service call. This is about a dispatch fee for an estimate. 2 different things. We went over this 2+ years ago.

 

[BryanMD]

That is the min charge for a service call. This is about a dispatch fee for an estimate. 2 different things. We went over this 2+ years ago.

This ties in with a trend in nicer restaurants.

Many places are requiring a credit card # when they take a reservation. A tendency for no shows can create havoc with all their operations.To avoid overbuying food, to avoid overstaffing and to avoid disappointing the actual customers... it seems to be working.

 

[Rewire]

This ties in with a trend in nicer restaurants.

Many places are requiring a credit card # when they take a reservation. A tendency for no shows can create havoc with all their operations.To avoid overbuying food, to avoid overstaffing and to avoid disappointing the actual customers... it seems to be working.

What if you dont have a credit card does that mean you get turned away?

 

[BryanMD]

What if you dont have a credit card does that mean you get turned away?

I suppose so.

This is about all the wheel spinning that happens. When(if) the party shows up then it's not an issue... but if (when) they don't show up their card gets dinged.

The process is reversed (as I understand it) but the intent is the same. Just cause someone says they want X isn't enough. Pony up a few bucks to show you're serious.

 

[Dnkldorf]

I suppose so.

This is about all the wheel spinning that happens. When(if) the party shows up then it's not an issue... but if (when) they don't show up their card gets dinged.

The process is reversed (as I understand it) but the intent is the same. Just cause someone says they want X isn't enough. Pony up a few bucks to show you're serious.

I'd be inclined to say, they do this for the same reason golf courses require this for a T-time.

They don't ding you, if you don't show up, nor do they charge you, just to make sure you show up.

They require it, and if you don't show up, they have your name. That's all. I believe after 2 times you reserve a time and don't show up, they stop reserving you a time. It doesn't mean you can't play, or eat in this case. You just lose the privelage of reservations.

 

[Dnkldorf]

Having said that, I'm sure they are exceptions to this somewhere.

 

[RodMerrill]

Consider free estimates as a cost of marketing. Rather than spending money on some forms of advertising where you have little means of tracking the results, turn your estimating time into a sales pitch that will demonstrate to your prospective customer the professional service you can provide whether or not you get the job. I know in my own experience of receiving estimates that if the representative I deal with presents themselves in a way that is impressive, I will tell others about their company. As is often said, word-of-mouth advertising is almost always the least costly form of marketing. Just make sure you factor in your estimating time when you set up this portion of your marketing expense budget. At least you'll feel like you're getting compensated for your time.

 

[emahler]

Consider free estimates as a cost of marketing. Rather than spending money on some forms of advertising where you have little means of tracking the results, turn your estimating time into a sales pitch that will demonstrate to your prospective customer the professional service you can provide whether or not you get the job. I know in my own experience of receiving estimates that if the representative I deal with presents themselves in a way that is impressive, I will tell others about their company. As is often said, word-of-mouth advertising is almost always the least costly form of marketing. Just make sure you factor in your estimating time when you set up this portion of your marketing expense budget. At least you'll feel like you're getting compensated for your time.

as a new company, without a track record, how do you get the chance to give a 'free' estimate without actually incurring the expense of advertising? hard to get much word of mouth advertising when you are new to the business...

 

[weressl]

as a new company, without a track record, how do you get the chance to give a 'free' estimate without actually incurring the expense of advertising? hard to get much word of mouth advertising when you are new to the business...

That is caleld up-front expenses. Many businesses fail because they do not take into consideration that in the beginning they will be in the red, eg. more out than in. Business will not come to you - as you have probably noticed - unless you are already known. Advertising succes rate, contact callback succes rate varies and you are remarkably succesful if it is above 1% and 5% respectively. (Of course regional and economic conditions can significantly deress even those numbers.) If you have not accounted for that in your business plan, you may be sorely surprised.

 

[ohm]

That is caleld up-front expenses. Many businesses fail because they do not take into consideration that in the beginning they will be in the red, eg. more out than in. Business will not come to you - as you have probably noticed - unless you are already known. Advertising succes rate, contact callback succes rate varies and you are remarkably succesful if it is above 1% and 5% respectively. (Of course regional and economic conditions can significantly deress even those numbers.) If you have not accounted for that in your business plan, you may be sorely surprised.

Very true, I would not start as a new EC unless I had a couple of jobs lined up. The first couple of years are really tough, even the IRS is surprised if you show a profit!

After the first $M the others are easy:smile:

 

[electricguy]

That is caleld up-front expenses. Many businesses fail because they do not take into consideration that in the beginning they will be in the red, eg. more out than in. Business will not come to you - as you have probably noticed - unless you are already known. Advertising succes rate, contact callback succes rate varies and you are remarkably succesful if it is above 1% and 5% respectively. (Of course regional and economic conditions can significantly deress even those numbers.) If you have not accounted for that in your business plan, you may be sorely surprised.

90 percent of my business does come to me ,it costs me to do it that way, but I feel if i went looking for business via the cold calling method customers would probally think I am hungry and try to wheel a deal

 

[Rewire]

90 percent of my business does come to me ,it costs me to do it that way, but I feel if i went looking for business via the cold calling method customers would probally think I am hungry and try to wheel a deal

Alot depends on your aproach to the cold call. I have gone into an area and handed out busines cards to all the businesses I would tell them that we are now operating a 24 hour service truck in their area. This approach takes away from the sound of desperation and replaces it with the thought of growth.

 

[satcom]

That is caleld up-front expenses. Many businesses fail because they do not take into consideration that in the beginning they will be in the red, eg. more out than in. Business will not come to you - as you have probably noticed - unless you are already known. Advertising succes rate, contact callback succes rate varies and you are remarkably succesful if it is above 1% and 5% respectively. (Of course regional and economic conditions can significantly deress even those numbers.) If you have not accounted for that in your business plan, you may be sorely surprised.

Yes you need some money to start a business, this "I don't have any or low overhead" is a pipe dream, but every day someone will think they can strike out own their own, with little or no money, and the larger percent of them fail, a few get lucky, but they usually never earn more then a income at best, and if you try to help them understand the problems, they will tell you how they had a boss that made big bucks or some other yarn, we had a lot of new EC's in the area that looked sucessful, only to learn there wifes that had six figure jobs, and paid for all the nice trucks, all show and no go, they are all gone now since the business slow down, I guess their wife needed the money to run the house, no more playing EC, I my opinion, there is no shortcut to growing a business, find someone that is established, and growing, then follow their model.

 

[weressl]

90 percent of my business does come to me ,it costs me to do it that way, but I feel if i went looking for business via the cold calling method customers would probally think I am hungry and try to wheel a deal

You may not mean to do that, but from this statement it seems that the relationship between you and your client starts its base on mistrust. You reap what you sow.

 

[mcarfaro]

charging for estimates

charging for estimates

In a world where getting the best price, people are getting several quotes for the work to be preformed.
As supervisor in the Engineering Department at the local hospital we seek several quotes for our projects. The contractors are required to pay a fee for the bid documents. Maybe the home owners should do the same when they are seeking contractors. How many jobs would you bid then?
"The bitterness of poor quality lingers long after the sweetness of a cheap price is forgotten"
Remember cheap and best price are not the same thing. Fiscal responsibility

 

[mcarfaro]

In a world where getting the best price, people are getting several quotes for the work to be preformed.
As supervisor in the Engineering Department at the local hospital we seek several quotes for our projects. The contractors are required to pay a fee for the bid documents. Maybe the home owners should do the same when they are seeking contractors. How many jobs would you bid then?
"The bitterness of poor quality lingers long after the sweetness of a cheap price is forgotten"
Remember cheap and best price are not the same thing. Fiscal responsibility

 

[Dnkldorf]

only to learn there wifes that had six figure jobs, and paid for all the nice trucks,

That's the cat's meow way of starting a business......you jealous?

It's called having an advantage and using it effectively.

 

[hardworkingstiff]

"The bitterness of poor quality lingers long after the sweetness of a cheap price is forgotten"

I love that statement. I base my business on it. I tell my co-contractors that you can't afford to be cheap (you can afford, at times, to work for less, but that's a different story), the customer will have to live with the work long after they forget what it cost. You can't fake a good reputation.