In my previous post, “Stop giving free plans and estimates”, I outlined how I had discovered that people were, in fact, willing to pay for my design and estimating services.
At first, it was hard to convince myself that I needed to charge a fee for this service. I wasn’t sure how to bring up the topic, and I had no idea what to say if someone objected.
After all, I wasn’t the only one under the impression that contractors did free estimates — potential customers were, too.
But I persisted. I studied different sales techniques and tried to find information about selling design services.
As I continued to develop the script I would use with my potential clients, I started to identify the different kinds of people that were calling. Namely, the tire-kickers.
I’ll never forget one call. The prospect began to describe what they wanted to do. After twenty minutes, we finally got to the point where it was time to schedule a meet-up.
I explained that the first meeting was complimentary. We would review what they wanted to do and see if it would feasibly fit within their established budget. That sounded good to them. Then I started to explain that if that looked good, we would enter into a design agreement, and the price would be about $1,500 to create the conceptual plans and budgets.
I’ll never forget their response: “Oh, we don’t want to do that, we’re just looking for ideas!” I wanted to say, “Are you kidding me? You expect me to come to your house and give you a bunch of ideas for free that you can then use to build your project?”
Instead, I bit my tongue and gracefully declined a visit to look at their project.
It soon became apparent to me that I was onto something. Because I kept very accurate records, I knew my closing ratio was 3 in 10 leads. When I started charging for my design services, the closing rate stayed about the same, but instead of working to close on the project, I worked to close on the design agreement.
I was now able to spend more time working on fewer, higher-quality projects. The plans turned out better and it was easier to create more accurate estimates. I was also able to build great relationships with each of my clients. My closing rate was over 85% for the building projects where formal proposals and bids were submitted.
The bottom line is that when you impose a financial commitment (of any size), you are taking the client off the market. You are creating a scenario in which you’ll be working on fewer projects and creating better plans, all while building a robust and trusting relationship with your client.
People like to get happily involved with someone they trust. Get paid for your professionalism.
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