17 Apr Who Really Pays For Free Estimates?
By Mike Gambino
There was some very poor advice given recently in a public message forum by two individuals who don’t have service providers best interests in mind but their own. They represent a company that sells landscape lighting products. Frankly they have no business offering this self serving advice as they (as far as I know) do not offer design and build services and are not traveling out to project sites to meet with owners but only supply products for those projects. They basically said all new prospect meetings or design consultations should be done free of charge to the homeowner. Easy for them to say when they are not the one footing the bill for such a freebie. Their objective is to sell their products and they don’t care what it costs others to sell them just as long as they get sold. Those foolish enough to take that advice need to know that nothing is Free. That brings us to the question.
Who Really Pays for FREE ESTIMATES ?
Everywhere, In commercial ads, in the newspaper. “Get your free estimate! Free in-home-consultation! Call Today”.
We see these ads just about everywhere in the construction business. My question is: Who really pays for these free estimates? Before I can help answer that question, free estimates have been the norm for getting in the door to a potential customer’s home or business. A potential client will think, “Estimates are free; what do I got to lose by calling XX Company to come out and give me an estimate? In fact, let me call 2 or more contractors to get my free estimates and then I can use them for leverage of one against the other!”
The truth is, estimates are Never Ever free. Here’s what it takes to give out a “free” in-home consultation or estimate:
Time. It takes an average of 11/2 – 2 hours to drive out to someone’s home (and return back), discussion about the project, take measurements, take notes of concerns and expectations from the homeowner, make some rough sketches, observe existing or potential power locations, show product samples and photos of similar projects etc., etc., and etc. Doing 3 to 4 estimate per day would leave you little time to prepare for the next day’s projects. Sooner or later you may have to hire someone just to do estimates.
Money. It takes gas to drive out to meet with prospects. And gas these days is not cheap. The cost of related wear on your vehicles, and mental work and wear from the quotes you spent time on — when a homeowner wasn’t going to hire you anyway (them wanting to know what a project like theirs’ cost) — at your expense. Yes there are going to be x number of those per year no matter who you are this is just a given.
As a landscape lighting designer builder :
Qualify your leads further. There is still ways to minimize the financial impact of providing cost estimates. Here’s how:
- Be a good listener.When talking on the phone or through email for the first time, listen for triggers in the conversation that say “this person is a tire-kicker”. A tire-kicker is one who tricks you into thinking they are ready to buy, but in reality, is not ready and just wants to know your price and are just shopping around. Perhaps to play your price against another contractor.
- Ask the right questions.When are you ready to start the project? How many other contractors have you gotten estimates from? Are you ready to sign a contract today?
- Have realistic expectations.Not one contractor has sold every job they went out to sell. Just doesn’t happen. You can, however, close the gap — by paying attention to those little hints you get and listening to your gut feeling on a prospect.
How to charge for Design consultations. A simple way for you to charge for design consultation meetings is this way:
- Ask the prospect to e-mail photos of their project with a summary of specifically what they want to do. Offer a free ballpark non binding price over the phone or by email if they want more information before having you come out. Attempt to qualify the prospect during this conversation.
- Charge a small fee for in-home meetings, We charge $100 for a short, concisely written proposal detailing the project’s overview and costs.
- If the prospective client balks at an in-home design consultation fee for a project, that is OK. Let them go as it probably wasn’t the kind of client you’d want to have; not a good fit for all the parties involved. Sell your company on its value rather than the cost and you’ll do well. If they are not willing to spend $100 to cover your travel costs and to be educated in the comfort and convenience of their own home. Do you really think they are going to accept a project that costs in the $1,000’s.
Some will argue that you’d be losing potential projects. True but that is very rare from my own experience of getting paid for in home consultation for over 15 years. And you know what they say sometimes the best project is the one you didn’t get.
There will always be companies offering free estimates. Who really pays for free estimates? The clients that actually hire you (in the form of higher costs)! This amount is passed on to these customers in some form or another.
Kind of like higher insurance premiums. As a result of a few taking advantage of the system, it results in higher premiums for everyone else. To keep a company viable, this cost must be recouped from others. I don’t believe in making clients pay for time spent with prospects that don’t.
This landscape lighting blog is published by Mike Gambino of Gambino landscape lighting inc. all rights reserved. Mike is a professional landscape lighting system designer/ builder and has been designing, installing and maintaining landscape lighting systems for more than 20 years. Mike resides in the Los Angeles area with his wife and 2 sons. To visit his website go to www.gambinolighting.com . To inquire about hiring Mike please click here .
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