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Sunday, February 22, 2009

Free onsite estimates?

This blog posting, Call another Raleigh Fence Company to Get Me a Measurement? from Keith Bloemendaal of Raleigh Fence Contractors in North Carolina raises some important questions.

Bloemendaal says he is one of only a few fence contractors who are ready to drive out to see the homeowner, take the measurements, and provide the estimate on site. Others tell potential clients to send in their measurements and they will quote the job and one (who really raised Keith's ire) suggested to let another contractor take the measurements, quote a price, relay the information to the competitor, and the other contractor would under-bid the job.

Ouch! So you go out and spend gas and time, and then the potential client just needs to call the competitor with your prices, and achieves the work for less!

Of course, as Keith says, there are advantages in trust building and relationship development in visiting the client and developing the relationship -- qualities that cannot be achieved by the brutally inexpensive invitation to do things over the phone. Yet there are tough challenges here: In a recession, where under-bidding is common, spending your time and money to prepare quotes and estimates cold, only to lose everything to the low-baller, seems a rather poor way to do things.

I'm personally not in the trenches in Raleigh, so won't dare to suggest the best answer, but think some clues about possible solutions are possible through demographic and market analysis of your leads. In other words, are you able to assess your closing rate based on location, source of lead (referral, website, or whatever) and track these in a meaningful way. This might be helpful if your database is large enough to be valid. Here, when you receive a call from, say, your website, and the neighbourhood results are poor, you can decline the business or set it as a low priority. (Of course you should avoid racial profiling or anything that would get you into trouble with anti-discrimination laws).

But this is only a partial solution, because the other aspect here is the sales process and communication opportunities. Should you prepare estimates without a face-to-face meeting and decline all "Just drop by and take the measurements when I am at work" inquiries? This of course prevents you from traveling great distances without any relationship development opportunities, but you then have to match your schedules with the homeowner, and perhaps lose the efficiency of job batching (let alone requiring much inconvenience).

Could you succeed with a video estimate with some added branding resources and options? Here, you are respecting your client's convenience and really focusing on your value -- but, again, all your hard work may go to waste if a competitor just snatches it, develops a high-quality video/marketing retort, and steals your business!

Keith talks about ethics in his posting, and indeed there are questions here that are troubling. But I wouldn't spend too much energy worrying about the behavior of your competitors; things come to roost in the long term. You simply need to find answers in the short term.

Maybe readers here have some other ideas and answers to this challenging problem.

1 comment:

Keith Bloemendaal said...

Mark,
Thanks for the write up here. I hope to see some comments from others in reference to this problem I am having. While it is rather irritating, I have been around the construction industry for about 20yrs and know it is also common practice.

In the current economic climate, every call or email requesting a quote is treated as gold, and while I am enjoying more traffic and business now than last year, I am also a new company and have enjoyed great success with searches through blogging (something my competition doesn't like).

The main purpose of writing about this situation on my blog (other than shear anger) was to inform people that this type of contractor should not be trusted, and was making money off the backs of the rest of us (most do things the same as me here).

Anyway, thanks for the write up and I hope to see some other opinions commented.