Markup

[magictolight.com]

Our best customer, a general contractor in the area, is now building a space for their office. Since they give us so much work, and since this is for their own office, do we still mark up the electrical project like we would otherwise or do we discount the project for this client?

 

[brian john]

Can go either way, depends on how nice you want to be, or take half your normal markup.

 

[220/221]

Define "so much work" and what kind of work.

I have done work for free for exceptional clients who pay well/on time and only ask that we do what we are supposed to do, when we are supposed to do it.

Other clients throw us work but it is usually crappy work.

Other clients throw us work but want some $$ returned to them.

 

[Rewire]

Take care of your customers and they will take care of you.

 

[magictolight.com]

I hate to admit it but more than 50% of our work comes from these guys, and they always pay within two weeks. We get all their upper end work and most of their middle to low end resi work. This is a $15k - $20k project, with normal markups. We are a two technician shop so far so this is more than we could bite off for free.

 

[Rewire]

I hate to admit it but more than 50% of our work comes from these guys, and they always pay within two weeks. We get all their upper end work and most of their middle to low end resi work. This is a $15k - $20k project, with normal markups. We are a two technician shop so far so this is more than we could bite off for free.

diversify,if these guys take a shine on another EC you will be OOB

 

[wireguru]

be careful. A few things to consider:

With them knowing they are 50% of your work, and the fact that you did free or discounted work to keep their business, they could start demanding all sorts of free or discounted work under the threat of finding someone else

If you bid something at 20k and are all of a sudden able to do the work for 15k, the customer can view this as you were overcharging them by 5k

GC's arent always stupid, and you dont want him thinking you are overcharging him down the road to make up for the discounted work you did on his office.

Another thing to consider, as Rewire mentioned, is that you would be out of business if the work from these guys went away. There is also the old addage that companies begin to fail after building themselves a new headquarters (sears, several banks, enron(i think) and many others.....

 

[Ohmy]

I hate to admit it but more than 50% of our work comes from these guys, and they always pay within two weeks. We get all their upper end work and most of their middle to low end resi work. This is a $15k - $20k project, with normal markups. We are a two technician shop so far so this is more than we could bite off for free.

Here is how you decide how much of a discount you give them:

If they were not building a building, how much money would you give them out of your own operating account for being such a good customer. That is the discount you give them. If you had to write the check today, what would it be.

BTW, if you give a good customer a break because they are a good customer, then you are even....right? Then they are no longer a good customer? Isn't the point is to have as many good customers as possible, not to get even with all you customers.

 

[zog]

IMHO, normal markup, throw in a nice "Housewarming gift", a nice lighting upgrade for the conference room, or something like that.

 

[electricmanscott]

I used to take care of my best GC. Worked in their building for cheap. Worked in their homes for cheap, etc. Guess what? Now that business is in the toilet they "forgot" about all the favors and deals they got over the last 15 years. They figured they could find somebody cheaper, and they did just that.

Live and learn. Business is business.

 

[480sparky]

One thing to consider:

Is this an office that their clients & customers will be seeing? If so, consider this as an opportunity for your work to shine.

If it's just offices for their staff, and the public won't see it, then take that into account as well.

But I'm with electricmanscott on this..... unless you have a signed contract for any and all future work, they have no legal obligation to 'pay you back' for any discount you give them.

 

[Rewire]

Friends are nfriends and business is business,why are you giving the discount?

If you are giving the discount out of fear of loosing them then you already lost them.

If you are giving them the discount in hopes of future work you will soon be out of business.

If you do professional quality work then that is what they expect and should be willing to pay for,if you then choose to offer a discount as a way of thanking them for their business they will remember and appreciate it.

We do quality work for all our clients ,we thank them at years end with a card or premium.

 

[Power Tech]

In the resi. hay day I installed a display of the title 24 can lights and trims with the promise of all there work. Well, they gave all there work to a Residential Romeo (he goes to their church and "really needed the work"). This guy did not do 2 years of resi. work and forged papers to get his license. Burned the garage attached to a house down, and now gives out great advice working at Home Dopey. Since then they have sold the building, moved back to Pennsylvania. The display cost me about $600+. I am in the school if you give them a break they will expect it on the regular jobs. After watching other contractors get addicted to one source of food, I decided to get a broad base of customers. So no one client can hurt or intimidate me.

 

[ITO]

Our best customer, a general contractor in the area, is now building a space for their office. Since they give us so much work, and since this is for their own office, do we still mark up the electrical project like we would otherwise or do we discount the project for this client?

Just went through this.

I did a tight bid, marked it up "10 & 2" (12%), showed them a copy of my estimate, and they loved it. Bigger GCs will often use 12% for their markups so I matched it.

After I got the project I was VERY gracious about changes and making sure they were happy....LOTS of customer service. What changes that were done were done with the same 12% and transparent estimates.

I made a little money on the project and they are very happy... it's called Win Win.

 

[SEO]

Give them your normal good installation and throw in a few special perks. Charge your normal rate and mark-up. They already know that they are getting a quality job at a fair price or they would be shopping for bids.

 

[LarryFine]

. . . or they would be shopping for bids.

There's really no guarantee that they aren't.

 

[SEO]

I agree Larry I can't tell you how many times that I have been used as a contractor to compare my price with the contractors that they use. However if you lower your price they will expect you to do that on any job that may be going over budget. Also I think that contractor loyalty is starting to be a thing of the past.

 

[LarryFine]

Sad times, I guess.

Sad times, I guess.

Also I think that contractor loyalty is starting to be a thing of the past.

Contractors aren't the only ones. A couple of days ago, a friends mom, for whom we've done electrical, plumbing, and handy-man work, called and asked us to look at a screen door that doesn't shut properly.

We went to her house after that day's work, pulled into the driveway, and there sat a van from another electricial contractor. We got out of our van anyway (inertia), looked at the door, got back in the van, and left.

She called again the next day and asked if we could come by and look at the door. I told her what happened, what we did, and why. I suggested (politely) that she needs a handy-man and not a real contractor.

 

[SEO]

Contractors aren't the only ones. A couple of days ago, a friends mom, for whom we've done electrical, plumbing, and handy-man work, called and asked us to look at a screen door that doesn't shut properly.

We went to her house after that day's work, pulled into the driveway, and there sat a van from another electricial contractor. We got out of our van anyway (inertia), looked at the door, got back in the van, and left.

She called again the next day and asked if we could come by and look at the door. I told her what happened, what we did, and why. I suggested (politely) that she needs a handy-man and not a real contractor.

All good deeds don't go left unpunished. You probably helped her out before as a favor and when a real paying job comes along your not in the picture. Doesn't seem right.

 

[LarryFine]

Doesn't seem right.

Didn't feel right.