In the first of a new series, HBXL Building Software looks at how you can win business without dropping your prices.
The all-important homeowner – what you should know
- Well for starters, it’s time to stop making assumptions. Are you sure you know what customers are prepared to pay? Have you ever considered that customers are actually put off by low quotes?
- Customers don’t always like cheap (you know the saying ‘buy cheap, pay twice’?). But they find it difficult to say so – instead they make other excuses for turning you down.
- They want a fair price with a sufficient breakdown. They want to know where their money is being spent. (And it’s harder to argue with the facts!).
- They want text/email communication to be prompt and your visits to be on time.
- They want you to bring the quote in person – and to see a clean van, clean shoes…
You get the idea. Of course every customer is different but there are some general, fundamental requirements.
So how do you literally break the vicious cycle of low quoting?
- Go after customers who you have no previous history with. This way you’re not caught in a cycle of low charging
- Prove that you are worth employing by your actions (see above re presentation and professionalism)
- Get recommended for the quality of your work NOT your low price
- Win with an accurate, detailed, professional-looking quote that reflects your high standards
- And don’t underquote provisional costs to appear cheaper – if it’s not specced properly it’s safer to list it without a price.
Oh yes, and think of all the competitors you know who are more expensive than you – and they’re still winning work. It’s there to be had.
And where are we getting our information?
We’ve had countless chats over the past 20 years with users of EstimatorXpress, HBXL’s estimating software. Then there’s the feedback from customers of our sister company HBXL Estimating Service. But on top of that, we have the inside track on successful quoting from one of our partners.
HBXL works with a company called The Better Business Group. BBG has been helping builders since 1995. It supports building firm clients by:
- Surveying homeowners to fully understand what they really want.
- Obtaining feedback from homeowners on jobs won and lost. And over time have catalogued tens of thousands of answers. They look at their customers’ competitors too.
- With the customer information and a comprehensive understanding of the building firm, they help them become busy, successful and profitable.
- They offer mentoring to avoid common pitfalls – like under-pricing.
- For some clients they actively work on every new enquiry to help win the project at the right price, typically helping businesses charge at least 15 per cent more.
- They recommend our own estimating software to building firms. That’s because they know that accurate, promptly produced, professional-looking quotes are crucial.
So what are the main takeaways for charging the true cost of a job?
- A reduced price may not win you the work (and if it does you could find yourself in all kinds of financial bother).
- Accurate prices for brand new customers and close attention to how you treat them give you a better of chance of converting quotes into customers.
Next month’s article will look at ‘The importance of a financial buffer in your estimating’.
