Contractor Update

You inevitably have had to deal with "tire kickers." The potential clients who don't have the money for a project or who may only be concerned about getting the best price. They waste your time trying to get free estimates or insanely low bids, only to not go with your company because you care about quality.

Contractors have to deal with these types - whether they come from your yellow pages ad or from an online lead service or even a referral. I've heard it said that more than half of the tire kickers and price shoppers you talk to end up being people builders and remodelers would kill to have as a client. But, you've got to spend some time to weed out the other half.

For every client price shopping you, you'll have another ready to hire you and have the job done right. You need to see it from their point of view. It's not like they are walking into a store to buy a product with a fixed price tag. You're an unknown. They've heard just as many horror stories about unscrupulous contractors and con-men as you've had to deal with tire kickers.

Because there are different levels of service, quality in materials, and even costs based on your part of the country, a homeowner doesn't want to get taken for a ride. If they've never had a roof replaced or remodeled their bathroom, they don't know what it costs for sure so they're out to get the best price.

The first thing you should do is find out who the decision-maker is. Either through indirect or direct questioning. If you're not dealing with that person, it could be someone to avoid. Next, ask about financing. It's not smart to be accusatory here, but do it in a way that lets them know you want to help or know of a good resource. No financing could be a trouble sign.

After this, you'll want to dig a bit into the homeowner's situation. It would be easy to start out with "What's your budget?" Easy, but not smart. Remember, they don't know you and they don't trust you. Why should they? If you ask - - right away - - "What's your budget?" they may be willing to spend $40,000 but they're not going to tell you that. They're going to tell you $15,000 just to see the expression on your face or hear the hesitation over the phone. Their fear is that if they give you their actual budget, you'd say this was fine and you'd end up charging them $50,000 or $60,0000 by the time any surprises were discovered during the process. They are worried at best and afraid at worst.

You want to ask the homeowners, "How long have you been in your house and how long have you wanted to do this project?" Get them talking about their goals, even if it's just during a fifteen minute phone conversation. Determine their wants and needs. Ask, "When do you want to start?" And, at this point, you'll want to find out, "How many other bids are you looking at?" It's good for them to shop around but you don't want a price shopper who doesn't care about your level of quality.

Finally, you want to talk budget. Tell them straight out that budget is an issue with you and you don't want to waste the time of either party. Let them know that you provide a certain level of quality and you need to make sure if you both will be a good fit. Ask them what they can afford to spend.

If you don't like the answer you get, consider the other answers you've already been given before you end the conversation. The other questions and answers will have triggered your instincts on whether or not they're are potential clients for you. If you feel they may be turned, once they realize everything involved and that they are capable of paying for your services, you should spend the time to educate them on what you can do and what all is required.

RELATED POSTS:
The ABCs of Closing
Negotiations, Influence and Your Business
Top 7 Sales "Killers"

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Labels: Contractor Advice, Sales Advice, Small Business Advice

Industry News from ContractorMag.com: "Nonresidential building continues to outperform the residential segment, and construction industry job and wage figures reflect that trend, said Ken Simonson, chief economist for the Associated General Contractors."

"He said he was looking on the bright side when commenting on a Jan. 3 report from the U.S. Census Bureau that shows the value of construction put in place in November 2006 totaled $1.184 trillion at a seasonally adjusted annual rate, down 0.2% from the upwardly revised October total. "

"'I must point out there was lots of good news hidden in today's seemingly gloomy construction spending report,' Simonson said. 'Nonresidential spending showed a strong 1.2% gain in November, even after the October figure was revised from a small loss to a 1.1% gain. '"

"Meanwhile, residential construction spending shrank again in October by 1.6%, bringing the cumulative decline to 11% since peaking last March.'"

"Simonson said he has observed-'no letup in the torrid pace of private nonresidential spending growth.'"

"'For instance, lodging construction — mainly hotels and resorts — jumped 4% in November and was up 71% from the November 2005 level,' he said. 'Electric power construction charged ahead 4% in November and was 18% higher than a year ago. Manufacturing construction had a 1% gain for the month and was 11% ahead of the year-ago level. Health-care construction, mainly hospitals, gained 0.4% for the month and 20% compared to November 2005."

"'The diverse commercial sector, with strong gains in multi-retail and warehouse components, tacked on 1% in November and 11% compared to the year-ago month.'"

"'A closer look at the private residential totals shows new multifamily construction gained 1% in November and 16% compared to November 2005, while improvements rose 0.6% and 6.7%,' Simonson said. 'But those numbers were swamped by declines of 3.1% and 20% for new single-family construction."

"'Energy-and power-related construction, hotels, hospitals and rental housing will all perform well, while single-family and condo construction will sink the totals.'"

"Commenting on the January employment report from the U.S. Bureau of Labor Statistics, released later, Simonson noted that nonresidential construction jobs jumped during the month, while employment related to home building fell off. "

"'In January, construction accounted for one out of five net new jobs in the entire non-farm economy — 22,000 out of 111,000,' Simonson said. 'Not bad for an industry that constitutes less than 6% of total non-farm employment. Nonresidential construction employment growth has been sizzling."

"'Over the past 12 months, nonresidential building contractors and nonresidential specialty trades have boosted employment by 160,000, or 5%.'"

"Simonson said that the job growth should translate into additional nonresidential construction work in the next several months. In contrast, residential building and specialty trades employment slipped in January, bringing the year-over-year decline to 84,000 jobs, or 2.5% of the January 2006 total."

"'I expect home builders will continue to shrink for most of 2007, until they see a marked upturn in home sales,' Simonson said."

"'Part of this reflects a changing mix of construction jobs, away from lower-skilled home building and remodeling to skilled nonresidential crafts,' Simonson said. 'But it may also indicate that contractors are ratcheting up pay to find the workers they need.'"

Labels: Construction Industry, construction jobs, Construction News

I found a post on the BNET blogs called the ABC's of Closing and it's worth checking out. What I like about the article is that it's telling you to recognize that you're not trying to trick a potential client into using your services, but you are instead moving them toward making a decision.

Here are some real word examples from the post about what doesn't work in closing a sale and what does work. See if any of them sound familiar to you:

• INEFFECTIVE: The assumptive close. Ask the customer to make a meaningless decision that assumes a decision has been made. Example: "Do you want that in the hunter green or the hunter orange?"
• INEFFECTIVE: The flyfish close. Promise something valuable then take it away if a decision isn't made now. Example: "We have a special offer - a 15 percent discount - but only if you decide to buy now."
• INEFFECTIVE: The puppy-dog close. Let the customer try the product for free in the hopes the customer will fall in love with it. Example: "We'll give you the product free for your evaluation and only charge you if you don't return it."
• INEFFECTIVE: The reverse close. Ask a customer who's saying "no" a question intended to elicit a "no" that actually means "yes." Example: "Is there any reason that you wouldn't do business with our company?"

The author also has some examples of how you should be funneling your potential client toward making a decision to hire your services:

EFFECTIVE:

• "How does that sound to you?"
• "What do you think about that?"
• "What timeframe would you need for delivery?"

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Labels: Sales Advice, Small Business Advice, Small Business Marketing

As a business owner, you're constantly trying to market your services to let potential customers know about your company. Your marketing plan may include listing your business details in several places - you may have ads in the phone book, in a newspaper or on the radio, and company information may be on brochures and business cards. Whenever a service professional talks about his or her business, many will list the features that best describe what service is provided. But, here's a tip - people don't buy features, they buy benefits.

What's the difference between benefits and features? If you're going to place an ad in your local yellow pages, you'll display your company name and contact information. Many companies will put down a list of projects or services they provide. For example, a plumbing company might mention they: install water heaters, specialize in copper re-piping, and handle septic system installations. Your competitors are probably listing the same features. But what's in it for your customer?

A benefit addresses a need. You can turn a feature into a benefit by providing solutions to problems your customers may have. Instead of stating you have several plumbers on call, state you can dispatch a plumber quickly to respond to any emergency. Most plumbers deal with copper pipes - tell your customers how copper will benefit them and that you can save them money because you install more than any company in the area.

When your planning your ads and brochures, write out all the features that your company offers. List what sets you apart from your competition and then write out how that will affect your customer. You'll find that you get better results from any of your marketing forms.

Labels: Small Business Advice, Small Business Marketing