How to answer your customer's third degree

[electricmanscott]

Ironically this came up into my head after I had a job thrown onto my plate where they told me as long as it was less than $3000 they were fine. I added it up a few different ways and could only come up with about $2100.

So then the price for the job is $2100.00 right?

As for the rest of the equation, I have lost my fair share of jobs by my unwillingness to negotiate. I generally tell people the price I came up with is based on what I believe it will take me to do the job and the figures are based on what I need to make to keep my business afloat and to make a living for myself. If I could do the job for the cheaper price they wanted that would be the price that I would have come up with.

 

[480sparky]

I generally tell people the price I came up with is based on what I believe it will take me to do the job and the figures are based on what I need to make to keep my business afloat and to make a living for myself.

Too few people truly understand this. What they think is a 'fair' price is you doing the work for your cost or less. And they really don't know (or care) what your cost really is. They have no idea how much you pay for licensing, insurance, bookkeeping, tools, rent, vehicles, continuing education, etc. and don't understand why you need to charge them for those things. In reality, a 'fair' price is one that takes all your true costs into account so you can continue to stay in business.

I am working right now on a basement finish. I was called out of the blue by a contactor's estimator about the job. He told me, "Don't tell the boss I told you, but we have $2000 maximum estimated for electrical on this job." I thought I would be OK doing the job for that...until I went and looked at it. 42 cans, a mini-bar, freezer, wine chiller, home theater, 1/2 bath with in-floor heat cable..... As I was looking at it, I though, "Geez, my material alone is going to be over two grand here!"
I thought it would be a lost cause as I worked up the estimate, but the builder didn't flinch one bit. He just said, "Sounds great, when can you start?" as he signed the contract.
Upon reflection, I wonder if his estimator was seeing if I would come in under 2K so they could make a tidy bundle by charging the HO a 'fair' price.

 

[bjp_ne_elec]

If customer supplies material, I also adjust my price accordingly - and one nice thing out of it, is that it's always a service call if I go to see why one of their cheap Home Cheapo lights isn't working. Works for me.

 

[LawnGuyLandSparky]

Has anyone been asked to install something so cheap, you couldn't or wouldn't? After a good friend bought a house, he aske me to install 2 recessed cans purchased at a Lowe's in the livingroom. These cans were made so cheaply, I had to talk him into buying the real product. The cans were 9.99 and included an eyeball trim. They were attempting to duplicate a mr-16 eyeball, but the unit was line voltage ane took a 120v halogen bulb. The can was made so cheaply and so thin, I could have crushed it with one hand like a can of beer. Instead of clips, it had 4 springs which were only springs in the sense that they were shaped like springs. Rated for non-IC these cans had no thermal cutout. If there was a 1/8" overlap between the hole requires and the trim size it was a lot. The splice compartment was smaller than a standard at-light, very thin metal, sat right on top of the can, (where all the heat would go) and rated for 3 14/2 NM cables. I swear if 3 14/2 cables were spliced in this box, it could never close, and the weight of them would force the can back through the hole in the ceiling. I don't know how but they were UL listed.

I had to tell him there's a reason these were 9.99 and the next closest thing would cost about 45.00, and I wouldn't be able to sleep at night if he insisted I install these pieces of junk.

 

[ITO]

My four biggest customer pricing issues are:

1) Sometimes fixtures reps give Architects budget prices for fixtures that are no where near the prices they give me on bid day?not even close. So when the job bids, or when change orders come around I get irate architects who swear that I am jacking up my fixture prices, and no amount of explaining can convince to them that I am being fair.

2) The chain stores always compare your price to how much they paid the electrician in Hixville, Arkansas. Never mind their pay scale is significantly lower than yours, or that the guy worked out of the back of his wife?s station wagon and went bankrupt doing the job, he just had a great price and why are you so high?

3) Yes you still have to pay sales tax even though you are an out of state contractor, yes you will have to give me a tax number or I will have to charge you the tax.

4) Temporary power does not mean I pay your electric bill.

 

[growler]

He told me, "Don't tell the boss I told you, but we have $2000 maximum estimated for electrical on this job."
I thought it would be a lost cause as I worked up the estimate, but the builder didn't flinch one bit. He just said, "Sounds great, when can you start?" as he signed the contract.

How much was your final estimate. The GC's estimator may have accomplished his goal just by putting that $2K price tag in your head before you started to do the estimate.

I had an old remodeling contractor ( GC ) give my some good advice a few years ago. He told me to never assign a dollar value to a job as you look at it. If you have a dollar value in your head you will try to adjust your estimate to be as close as possible. He was right and I had been doing that and it was costing me. Here is what tends to happen: 42 can lights at say normal rate of $95 ea. = $3990.00. ( cheap cans ). Darn they only figured 2 grand for the whole job so the materials will only run about 1 k so then the can lights get figured at $2500.00 insted of $3990.00 or more. Then you start to whittle a dollar here and a dollar there and pretty soon you are doing a $10 K job or $6 K and losing your A__ __ .

480sparky I am not saying that you have ever been fooled in this manor but many people have made this mistake ( including myself ).

I really wish there had been a site like this 20 years ago so that I could have read about the mistakes of others instead of making them myself. The reason so many people are out there working for nothing is they have no idea how to bid a job. I hear this comment from old electricians & plumbers all the time, " I now do half the work for twice the money, I wish I had known how to do this 20 or 30 years ago". :smile:

 

[kingpb]

If the customer accpets your bid, or pays the bill without saying anything, you should have charged more....

If the customer accepts the bid, or pays the bill but bitches about how high he thinks it is, then it's probably just about right.

 

[480sparky]

How much was your final estimate. The GC's estimator may have accomplished his goal just by putting that $2K price tag in your head before you started to do the estimate.

The only thing about the estimator's 2K comment that affected me is I was sure I would be told I was way too high, I was a rip-off artist/scammer, etc. I figured my price, $4,600, presented it to the builder, and he signed it [fyi, the home theater part was subbed out to a LV outfit].

I know there's a lot of "Am I too high or too low?" anxiety out there. My advice is three-fold.

1. If you're always too low, no one will ever complain about your price. You will be swamped, spending all your time [evenings and weekends as well], yet not make any money. It's time to adjust your pricing.

2. If your price is consistently too high, you never get many jobs, and almost everyone complains. It's time to adjust your pricing.

3. If a few people complain you're too high, and some comment, "Hey, that's great!" but most don't say much but still sign you up, you're in the 'sweet spot." It's time to enjoy the fruits of your labors.

 

[jaylectricity]

Has anyone been asked to install something so cheap, you couldn't or wouldn't? After a good friend bought a house, he aske me to install 2 recessed cans purchased at a Lowe's in the livingroom. These cans were made so cheaply, I had to talk him into buying the real product. The cans were 9.99 and included an eyeball trim. They were attempting to duplicate a mr-16 eyeball, but the unit was line voltage ane took a 120v halogen bulb. The can was made so cheaply and so thin, I could have crushed it with one hand like a can of beer. Instead of clips, it had 4 springs which were only springs in the sense that they were shaped like springs. Rated for non-IC these cans had no thermal cutout. If there was a 1/8" overlap between the hole requires and the trim size it was a lot. The splice compartment was smaller than a standard at-light, very thin metal, sat right on top of the can, (where all the heat would go) and rated for 3 14/2 NM cables. I swear if 3 14/2 cables were spliced in this box, it could never close, and the weight of them would force the can back through the hole in the ceiling. I don't know how but they were UL listed.

I had to tell him there's a reason these were 9.99 and the next closest thing would cost about 45.00, and I wouldn't be able to sleep at night if he insisted I install these pieces of junk.

Yes, I have refused to install certain things. I just explain to them what I don't like about it and offer something that I would install. It helps to have good communication skills so you can talk sincerely about the matter. That helps the customer know that you aren't just trying to upsell them.

 

[jaylectricity]

Then you start to whittle a dollar here and a dollar there and pretty soon you are doing a $10 K job or $6 K and losing your A__ __ .

I have been guilty of that on more than one occasion and believe me I'm paying for it. It usually stemmed from being afraid I wouldn't get the job because I was only scheduling about 20 hours a week (by choice) so I didn't have too much margin for error.

 

[ptonsparky]

...My response, "If I bring a steak into your restaurant will you cook it for me". He said "what do you mean" . I said you know what I mean, get yourself another electrian.

Had the same situation and used the same response except mine was hamburger - smaller house. He fully understood and has been a customer for 20+ years.

 

[busman]

Has anyone been asked to install something so cheap, you couldn't or wouldn't? After a good friend bought a house, he aske me to install 2 recessed cans purchased at a Lowe's in the livingroom. These cans were made so cheaply, I had to talk him into buying the real product. The cans were 9.99 and included an eyeball trim. They were attempting to duplicate a mr-16 eyeball, but the unit was line voltage ane took a 120v halogen bulb. The can was made so cheaply and so thin, I could have crushed it with one hand like a can of beer. Instead of clips, it had 4 springs which were only springs in the sense that they were shaped like springs. Rated for non-IC these cans had no thermal cutout. If there was a 1/8" overlap between the hole requires and the trim size it was a lot. The splice compartment was smaller than a standard at-light, very thin metal, sat right on top of the can, (where all the heat would go) and rated for 3 14/2 NM cables. I swear if 3 14/2 cables were spliced in this box, it could never close, and the weight of them would force the can back through the hole in the ceiling. I don't know how but they were UL listed.

I had to tell him there's a reason these were 9.99 and the next closest thing would cost about 45.00, and I wouldn't be able to sleep at night if he insisted I install these pieces of junk.

Yes - Progress old work can lights. Had a customer buy these recently. The clips that hold the cans to the ceiling are junk. Will NEVER use them again. I've always been partial to Lightolier.

Mark

 

[haskindm]

In a previous life, I worked for a car dealer. His advice was, once you have given the customer a price NEVER lower it without a reason. If you do the customer will get the idea that you are making some profit and will want an even bigger discount. Things like, well I can take another $100 off, but for that price I can't include the floormats; or go back out and look at their trade in - then come back and say "I didn't notice that your car has the V-8 engine, I can do a little better." Always have a reason to lower the price, this accomplishes two things:
1. It lets the customer know that your price is based on something, not just an arbitrary number.
2. You are willing to negotiate, but the customer will need to give up something in order to get a better price.
I found his advice to be valid.

 

[Dennis Alwon]

Originally Posted by Dennis Alwon
...My response, "If I bring a steak into your restaurant will you cook it for me". He said "what do you mean" . I said you know what I mean, get yourself another electrician.

Had the same situation and used the same response except mine was hamburger - smaller house. He fully understood and has been a customer for 20+ years.

Well I am glad to say I made the right decision also. For 30 years I have watched this guy screw more people than you can imagine. Sometimes you just get the feeling to stay away.

 

[bradleyelectric]

Has anyone been asked to install something so cheap, you couldn't or wouldn't? After a good friend bought a house, he aske me to install 2 recessed cans purchased at a Lowe's in the livingroom. These cans were made so cheaply, I had to talk him into buying the real product. The cans were 9.99 and included an eyeball trim. They were attempting to duplicate a mr-16 eyeball, but the unit was line voltage ane took a 120v halogen bulb. The can was made so cheaply and so thin, I could have crushed it with one hand like a can of beer. Instead of clips, it had 4 springs which were only springs in the sense that they were shaped like springs. Rated for non-IC these cans had no thermal cutout. If there was a 1/8" overlap between the hole requires and the trim size it was a lot. The splice compartment was smaller than a standard at-light, very thin metal, sat right on top of the can, (where all the heat would go) and rated for 3 14/2 NM cables. I swear if 3 14/2 cables were spliced in this box, it could never close, and the weight of them would force the can back through the hole in the ceiling. I don't know how but they were UL listed.

I had to tell him there's a reason these were 9.99 and the next closest thing would cost about 45.00, and I wouldn't be able to sleep at night if he insisted I install these pieces of junk.

I was presented with those cans once. I went with the HO to take them back.

 

[JohnConnolly]

I would say " It is always a good idea to get three different estimates. You may find a better price but you will never find better service or quality of work".

Or "Prices today ARE crazy. I just spent 85 dollars to fill my truck with gas and copper prices have tripled in the past year."

Or "I have work scheduled thru the 15th of next month anyway so you should probably call someone else".

 

[jaylectricity]

Yes - Progress old work can lights. Had a customer buy these recently. The clips that hold the cans to the ceiling are junk. Will NEVER use them again. I've always been partial to Lightolier.

Mark

One thing I don't like about Lightoliers... The mounting bars don't fit between regularly spaced strapping. Same with the Halo's from the Cheapo. 16 on center minus the width of the strapping is used so much, why do they insist on making the bars that extra 3/4" long so they can't fit?

I've always had to either cut the strapping and re-strap, or notch the strapping where I would screw the legs in.

Juno has it right. It fits snugly in between the strapping.

 

[jaylectricity]

In a previous life, I worked for a car dealer. His advice was, once you have given the customer a price NEVER lower it without a reason. If you do the customer will get the idea that you are making some profit and will want an even bigger discount. Things like, well I can take another $100 off, but for that price I can't include the floormats; or go back out and look at their trade in - then come back and say "I didn't notice that your car has the V-8 engine, I can do a little better." Always have a reason to lower the price, this accomplishes two things:
1. It lets the customer know that your price is based on something, not just an arbitrary number.
2. You are willing to negotiate, but the customer will need to give up something in order to get a better price.
I found his advice to be valid.

As one of the instructors said at my last code refresher course, "When they ask if you can do any better, you point to the list of work to be done and say, 'Sure, which one of these things don't you want me to do?'"