Pre qualification survey (ME)

Mark Hunt

is a heck of an idea.

Don't forget that car manufacturers do the same thing, albeit in much smaller print (MSRP).

Even a person of limited means knows that a Lexus can set them back 40k. Says so right on the TV commercial. But 99.9999% of consumers have NO IDEA what any heating/cooling system would or should cost. After all, how many of these systems will the average family purchase in a lifetime?

I like your idea hb, no different than car dealerships pasting prices on the vehicles on the lot. "This is what it can cost. Interested?"

Would you be upset if I did the same on our web site?

Mark H



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[Deleted User]

In our ongoing effort to increase efficiency...

Wallies, This is an issue I know for a fact that we all suffer with. How many times have you wasted hours, possibly weeks putting a bid/contractual proposal together, only to have the consumer have a cardiac arrest upon delivery of the price? Pretty often eh... Too darned often in my estimation.

We've tried priming the customer on first contact by doing the numbers FOR them, instead of giving them a range of prices and assuming they're doing the math in their head. Once we know the size of the project, we do the math and say, "So, do you have xx,xxx.oo in your budget for the comfort system?" If they say no, we don't waste each others time. However, some times, even WITH verbal prequalification, same thing, come presentation time, they clutch their chest and gasp. I guess they thought that if we spent a lot of time on it that the price would come down...by half:-(

We've decided that in order to make sure that it is worth the time we have to spend to perform the bid/contractual proposal, that we want to "interview" the consumer to make sure that we are a good fit for their needs. I'm thinking of a questionairre that asks things like "On a scale of 1 to 5, 5 being highly regarded, how do you rate quality of installation?" and so on and so forth for comfort, reliability, service after the fact, cost of operation etc. Once completed, we total the score, and if it falls within a certain range, then we entertain the possibility of doing business with them. If it fall below the acceptable range, then we politely explain to them that we are not a good fit for their needs, thank them for their time and remind them that we service all systems in case they have any issues.

Furthering the proposal requires them to pay us a modest fee for our design time, a minimal fee of say $150.00. If they balk at that, then again, we won't waste each others time.

Which brings me to my next questions, how much do you charge to generate a contractual proposal, and do you offer to give that fee back if they decide to do business with your company?

In keeping with the wall policy to not openly discuss pricing, please reply to my email address. As for the questionaire, feel free to comment with what you feel are important key points required to assess potential involvement.

The older I get, the busier I get, the less time I have to do designs,bids and "FREE" consultations...

Thanks in advance.

ME

Kevin O. Pulver

I look forward to your ideas ME

My wife doesn't need any more experience on the computer.
I can't be of much help except to agree it's badly needed. Kevin

Alan(CaliforniaRadiant)Forbes

Prequalification

I have the same problem although the frequency is less since we do plumbing and heating. Like you, I give them a budget number over the phone after asking them some general questions about their house. That's 95% effective in weeding out the tire thumpers. The other 5% is made up of the ones you are talking about, i.e. the ones that say that the figure is in their budget, we look at the job, review the plans, write a contract (no charge), but we don't get the job. I chalk it up to the cost of doing business; for some reason, they didn't like me, what I did or realized that they couldn't afford hydronic heating.

I don't start designing until I have a signed contract although there are exceptions. We currently have a job in SF where they have agreed to pay up front for outside design costs.

I really think you would loose customers if you asked them to fill out a qualification form. People don't like filling out forms, especially when they think it's a way for you to weed out non-interested customers.

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Mike T., Swampeast MO

"On a scale of 1 to 5, 5 being highly regarded, how do you rate quality of installation?"

Bad question Mark. I daresay that many or most consumers won't have the experience to reasonably understand the basis for let alone compare installation quality.

"Neatness of appearance"

"Robustness of materials"

"Service ease and access"

Use those three and I think you'll get a better idea of how the prospect views "quality" in terms they'll understand.

Unknown

We do charge to do quotes. However we also provide a lot of information with quotes, and thus it really is more than a quote. We call it an "initial consultation", and it is. Load calcs, broad stroke design plan, firm quote figures. Takes us awhile to do one.. average home, probably 6-8 hours including a voluminous email explaining the decisions made and why. Going back and refiguring for different options as many times as needed until that final plan and pricing is "right". That time isn't even close to covered by our initial charge.

But, we have close to a 75% closure rate. If that rate were lower, I would raise the cost of the initial consultation. We don't credit it back, that's a fee, not a deposit.

Trick is, what are you offerring at that stage? If they just want a ballpark bid, then you throw one out. If they want solid numbers and what to know exactly what to do, well that takes work, and if you're going to do the work it takes to figure it out.. and provide enough info that they could turn around and price shop it.. then you need to make sure you get paid for it. Your expertise is worth it. But you have to explain yourself!! You can't just charge someone, throw some papers at them with some load calcs and some numbers, and say there you go.

Make it a consultation. Sure, you won't get every project. But in my experience, if you can back up your numbers with good reasoning and provide superior information to your competitors, most clients will take a known quantity rather than an unknown quantity every time, even for more money. ESPECIALLY if you call out the potential problems you are solving with your approach, and the competitor's quote is a "lowball joe" quote that doesn't solve those issues!

For radiant, for example, I may explain why a consistently heated floor is more desireable than a standard bang-bang fixed-temp system, what effect it has and how... and I might even be addressing this as simply as by using a PWM thermostat (not much more money) on my quote, depending on the system. Then when the client sees that fixed-temp 3-way and T87 on my competitor's quote... they know what they are being offerred... and they know that my competitor is NOT addressing the issue, nor even giving them the options! Now, who's got their confidence there, do you think?

Gotta have someone on staff that can turn your expertise into layman's terms, though, if you can't. And it takes determination to work through all that prep work for less than it's worth and provide a quality consultation without a guarantee of a payday. BUT... after a little while, you can fine tune the "low cost leader" pricing vs the closure rate you're seeing.

You hit the nail on the head at the end there mark. I can think of very few people in this country I would consider to be more qualified than you to be offerring consultations instead of bids. You'll always need to have ballpark numbers handy, but your expertise is most certainly worth something.

Remember the flip side of weeding out "tire kickers" is watching people walk away early. That's ok. Remember why they are leaving... they aren't your clients.

[Deleted User]

Homeowner participation in this thread WANTED...

Thanks Mike, your participation is just as important, if not MORE important than the contractor/designers perspective only. I don't want to do something in a manner that offends people right off the bat.

Education is a key part of our job, and it is the first thing in order that we do upon first telephone contact. When we are done with our first telephone conversation, the consumer KNOWS the type of company (professional) they are dealing with. We leave NO questions unanswered.

It is just that when we are done answering thier questions, we'd like for them to answer OUR questions to ascertain whether it warrants additional participation on our part. We are NOT everyones contractor...

I invite all homeowners to give me their perspective of how they would feel about me interviewing them.

Thank you in advance.

ME

Dave DeFord_4

A Homeowners perspective...

but one that generally has the ability to do thing right. I never look for the cheapest price - I look for the best value. One thing you might look at is talking to the homeowner about the need for a heat loss calc and sizing requirements. Do the heat loss for them for a fee that is refundable if they choose you to do the install. Tell them that the heat loss is theirs to keep and maybe coach them on what to look for in other contractors. They could then use the heat loss calc to compare to other contractors specs. Obviously you need to make sure your calcs are right - but I don't think that is a problem for you.

The next thing you need to do is to discuss the comfort/price matrix. Obviously if the homeowner is only interested in up-front price you thank them for having you do the heat loss calc and be on your way - you might be able to suggest a couple of contractors that meet their needs if you would like to.

If the homeowner is interested in talking about the comfort/price matrix you continue the conversation after qualifying them as someone that can afford to do what needs to be done from a budget perspective. I am not offended by someone asking me if I have budgeted at least XXXXX.xx for the job. What would raise my suspicions is if they ask me the size of my budget - I then think they are trying to sell to my budget - not to my need. A subtle but important difference.

Next I would discuss the installation/operating cost matrix for the different types of installations. This is probably also the best time to get their take on various types of emitters. Personally my wife and I would not be terribly interested in baseboard in the living and dining rooms because of appearance and wall space concerns. In the bedrooms that may be a different story. My point is that you need to find out what the customer wants (they all want heat) and just as importantly what they don't want. This should narrow your proposal to the point where you can make some intelligent suggestions and decisions.

In order to get to this point you may want to prepare a brochure or web site (probably both) that discusses your philosophy about heating. You should also include something that discusses the TCO (Total Cost of Ownership). The hill that I see you having to climb here is that a F/A system is usually cheaper to install and more expensive to operate. This causes many people to go that route on new/renovate projects because they are already bumping up against their budget ceiling due to size of the project etc. If you can make them, and maybe their bank see the light that a $100/mo savings in fuel is $100 more a month they can afford in payment then maybe you can win a few. This is compounded by the fact that many of these loans sold into the secondary market and the efficiency of the heating system is not something that these secondary markets are going to consider.

Hope this helped

[Deleted User]

Weeding out the c-arrest susceptible

Homeowner checking in as requested. Mark, you've seen our plans and know that whenever our Colorado project reactivates Advanced Hydronics will design and install the system. I'll adjust the rest of our construction budget to accommodate whatever your fair price is. But I'm probably as far from a typical customer as one can find...

For the last several years it appears your workload has exploded. Therefore, the best suggestion I can offer is to eliminate tire-kickers as early in the process as possible. Do that by giving prospects' plans a once-over, use your broad, deep experience to establish a not-to-exceed (NTE) price, and offer them a contract right then at that amount for the complete project. Take it or leave it. If they sign, the terms would say that you'll do a detailed design/installation and, if your estimate was off, their actual cost might be less, but will not be more, than the NTE.

This approach will scare away many, many potential customers. However, it seems that you might be better off with fewer clients, but ones who are better attuned to the type of work you want to do. Only you can select the correct balance.

[Deleted User]

Sal,

Thanks for the kind words. You are the exception rather than the rule, but your take is valid and welcome. I look forward to helping you realize your dream home.

ME

[Deleted User]

Thanks Dave...

I will take your suggestions into consideration for our next meeting.

Thank you for giving me your buyers perspective.

ME

[Deleted User]

Thats the problem with being a technician Mike...

we WRITE and THINK like technicians. Not like marketing people that we SHOULD be...

Maybe that's why people hire marketing experts to do thier dirty work for them:-)

Another fallacy is sales and marketing being one in the same. Could not be further from the truth.

The more I learn, the more I yearn, the more I earn...

ME

[Deleted User]

How's about it contractors...

What is YOUR take on a prequalification survey. Don't stand back there in the shadows waiting to say something. Speak up...

I remember when I first started up in business, I could not say NO. I was burning the midnight oil until 2:00 AM every week night and most weekends, just trying to make ends meet. I'm much older now, and have an inherent need to work smarter, not harder.

What say ye? New or old contractor. What do you think about this prequalifying customers before you even set eye on them?


TIA

ME

Tony_23

Me too

I feel the need to work smarter, also.

I kinda do a phone interview, they just don't know it

Most of my work is either repeat or referral, so I don't think I need to screen everybody VERY closely.

But, I get fooled occaisionally. See my thread: Gotta Love It. This was a repeat customer who is now married to an accountant I suddenly became worth less than before

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Mike T., Swampeast MO

Exactly Mark.

And NEVER forget that in the US, forced air has the benefit of significant direct-to-consumer marketing while hydronic marketing is confined mainly to technicians.

A few of your potential customers will be genuinely well-informed when it comes to hydronic "quality" but forced air has so reduced the expectation of quality-related comfort that most will be thinking, "If it works, it's perfect."

John L

I think that NRT.Rob and Dave De Ford have great workable ideas in their comments and especially with Rob as he can subtly introduce the "concept" of quality, which we all know is difficult to define, I try and stay away from using the word "quality" in my presos, because let's face the homeowner does not want a crappy job done and in the early stage of the game it can be turn off if we constantly refer to be a "quality outfit" and thereby implying the other guys are not. When someone calls in for a ballpark figure you can handle it a number of ways. You could ask if itis a minor league ballpark or Yankee Stadium. That may sound "smart alecky" to some of you, however remember whose time we are deling with. Another way of handling it could be by telling the person that you are dealing with a large project with a an approaching deadline so you need their name and Phone #.Arrange a time to call them back. Tell them that you will need some time to consult with them on the phone to get an overview of the scope of work. Usually from the initial contact you get an idea of how serious they are- not all the time, but if you have been in this biz a while you get to feel people out. Doing this you have also introduced the "consult" idea top them and it will increase their perception of how you conduct your business. I got a call from a barber one time for a ballpark figure and i explained that I could not do that, and when he said why not, I asked him if he could give a haircut over the telephone, He laughed ,but he got the idea.
I am in the F/A side of the biz, so I do not get into big projects like a lot of you do, however I still have the same 24 hours in the day.
Some questions to ask might be.
1.What is the scope of the work?
2. Is it new construction or a remodelling job?
3. What system do you currently have(if remodelling)?
4. If they are considering changing their existing sytem to another type ask them why? (changing from hydronics to F/A or vice versa)
5. How soon will the project start?
6. What brands or systems have they been researching?( will give you a good insight into how far along they are and some of their thinking process-which you may be able to sort out or give clarification to)
7. Will you be dealing with the HO or through a contractor?
8. Are they interested in any financing you may have to offer?
9. Have they secured all the relavent permits? (this is service that you may offer, at a fee of course)
10. Can this project be completed at one time or will it be staged over a period of time and do they know that time frame?
11. If it is new con, will the site be secured.
There are probably more questions that can be added but this may be a good start. I have always believed in having a system/method or process that I can use in these situations because most of my competitors do not have one, It gives HO a better appreciation of what they are looking for and the complexity of the job, and most importantly I allows you to establish your credentials and reputation and set what ever parameters you want to have. It takes the form of a "consultative" call, which will allow you to
impress upon the HO the nature of your biz and how you conduct it. I believe that it will also allow you to request a fee for a more in depth consultation and what the result of that consultation will be and what the HO will receive in exchange.I think that a genuinely interested party would accept that a fee would not be out of question after your explanation.
My$0.02
John L.

tim smith

filter out tire kickers

I start with the phone discussion, talk about what type of system they are looking for and if they have other estimates yet. This is to determine whether they are in our market or maybe a lower tier market. Then after i get a feel for what they want, I give a wild idea of what they may be looking at, this usually clears out the ones who really don't know what they want or can afford. After this I set up an appointment to measure for load calcs and then provide an estimate.

Paul Pollets

Roundtable

this would make a good topic at the Uponor/HCT roundtables in Las Vegas on Th 4/27...1-5pm. Hope you'll be able to be there!!

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[Deleted User]

Unfortunately....

I have to teach Thursday night. Won't get into LV until Friday AM. If you'd be so kind as to broach the subject for me, I would appreciate it.

Take lot's of notes...

THanks pal.

ME

mtfallsmikey

As a \"former\" contractor

Who still has all of the required licenses, I tried this concept of pre-qualification, asking questions,and sometimes having the process work, sometimes not. Even after a lot of work, a detailed proposal, and a major dog and pony show, consumers will still price shop. In my area, charging for an estimate is unheard of. I hope as many of you active contractors adopt the policy for charging for consultation as you should be charging flat rate.

S Ebels

Depends on the job Mark

On straight forward, forced air changeouts, I'll just quote a price over the phone or face to face. To this I'll verbaly add a couple of "buyer beware" phrases like "depending on...........(fill in the blank) it'll cost $.$$ +/- a couple hundred". That's enough to get the tire kickers out of the way and give most rational customers an idea of what we're going to end up at.

On bigger jobs I'll do this. I'll visit the site, take some quick measurements for a heat loss, run that and noodle out a fairly close estimate. Along with this written estimate I include the following statement. "The enclosed price is an estimate and as such, the final price of the job may be more or less depending on many variables. I find that my estimates are usually within 10-12% of actual price. A firm quote can be generated for $$$.$$. (I figure $65.00/hour for this) The quote will detail all aspects of design, materials used, calculated heating/cooling loads, installation methods along with startup and commisioning procedures. This quote will become your property and if you purchase it, you are free to use it to screen other contractors or establish minimum design spec's or parameters. If you elect to have us do your installation, the cost of the quote will be deducted from the total price of the project."

(this is only applicable if you are doing the design and are basically supplying the "intellectual property" associated with the job)

Note that I didn't say bid, I have never given anyone a bid in my life. I give estimates and quotes, period. A bid implies that there are others doing the same work that we do and the price is negotiable. (Call me a pompous jerk but I haven't found any in our area that do the same work we do, and few that are even capable of it.)

A three minute phone conversation is usually enough to screen out the idiot's. Like the one last week who informed me that he had a price of $5,900 for a complete changeout on a 5 ton heat pump. His brother knew sombody who............you know the story.

Bottom line is that I haven't found any one method that works for all situations. Face time at the job site is still the best for qualifying customers, you just have to build a certain amount of it into your cost structure and schedule it as best you can.

JK_3

just had this conversation

Having been in this bis for a few days now this conversation has come up many times. Just this morning one of my techs and my self had it again. I have tried many different approaches over the years,attended many seminars and classes and read many,many reports,articals and books on this subject. Like you I have grown tired of doing a lot of work only to have someone else get the job. I have found that there are differnt customer mentallities in differnt geographical areas. Having worked with the tech years earlier in an area where even getting a plumbing/heating contractor to come out is a difficulty we were welcomed and appricated for the simple things like returning phone calls,keeping appointments ,appearence and percived knowledge of our profession. Spending time educating customers was just part of standing out and usally resulted in a signed contract.
The area that we are working in now is abundant with "plumbing and heating professionals". I like to beleive that those who do not do Quailty work ,that do not know their cost of doing bis and those that work illeagly are not a threat to my bis. The truth of the matter is they are. The customers them selves have under cut my pricing by taking my propoasl and given the job to someone else who read over my proposal and do the job for a few dollars less.
The out come this mornings conversation was that having any one set of guidlines would be the easiest way of doing bis but at the same time the most limiting and adapting to each customer as I do myself is not easy to teach to my technicians. If you find a prequailification method that works I would be very interested in trying it or adapting it to help my techs not "waste" time with customers that are not interested in our level of service . Wishing you the best.

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heatboy

I've been thinking about.............

.....putting the prices of projects on the pages of my site that house all of the project information. That way, people will know how much projects really cost. They can scroll through and find a house of equivalent size and get an idea how much there's would cost.

The Internet companies do this all of the time for their less than stellar "designs", so why not promote the other end of the spectrum?

coreys

Project Parameters

In the field of Project Management, we try to manage expectations and structure the project plan based upon priority rankings of the 4 project parameters: Quality, Scope, Schedule, Cost

Everything in your survey falls into one of these parent buckets in some way.

I think it is important to establish the priorities of the customer right up front.

On the other side of the table, I have not had good experiences with estimates from contractors. They tend to lack the detail required to make informed decisions. A single figure is just a black box. I want to know exactly what I am getting so that I can determine what the options are, and assign a value to each option.

Providing that level of detail takes time. The problem here is that the customer may not know you, and has probably been burned by some sort of home contractor in the past (who hasn't?). If you come in with a big upfront fee, I would be likely to say "forget it" unless you had done something to sell yourself in advance.

One strategy would be to do a 'lightweight' initial consultation, even if just by phone or email. Ask a lot of questions, and try to establish what their goals are. Then do your best to provide a range based upon previous work of a similar nature. This will prevent sticker shock, and prequalifies the customer. If you have sold yourself, they probably will not balk at a consultation fee if they understand the value of the service you are providing.

A fews years back, I had a boiler replaced. One contractor came in and spent over 2 hours doing a heatloss and discussing my options. 2nd contractor stopped by for 10 minutes, asked hardly any questions, and gave me a fixed price on the barrelhead. 3rd contractor wanted a $150 fee before doing anything. 4th contractor spent 20 minutes on the phone asking really good questions, then gave me a range and proposed an onsite visit.

Contractors 1 and 4 both instilled confidence, but contractor 4 had effectively pre-qualified me, reducing his odds of wasting time.

heatboy

Not at all, Mark.

Everyone always seems to want to run away from the price of a selected system. That's just nuts. The only reason I lose projects is due to price, so let's get on the same page early. This is what it is, what it does and how much it costs.

Every hour I waste with a tire kicker is an hour lost with my kids.

Mark Hunt

Thanks!


And you are 100% correct.

Our web site is due for a MAJOR over-haul and your idea will be part of it.

BTW, we are going to be working on a home that Ed Bishop has the heating contract for. He is a heck of a guy and knows his stuff.

Mark H

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S Ebels

Now that's something that makes sense

Now if I just had a website............

I like the Lexus analogy too. I would think that a homeowner possesing normal intelligence would look at the prices on HB's systems compared to RadiantXXX and think to himself that maybe there's something different about the two systems.

Rick Redmond

Old radiators and leaking valves

We are in the middle of 2 fairly large renovations that we replaced old existing boilers with new condensing boilers that worked out very well, howevre our problem has been that our customers want to reuse some of the existing radiators and we are having problems with leaking radiators valves (hot water heat).We have broken the spuds trying to get out the male thread side of the union out of the radiator, can we get them after they have broken ? Also ca n I get 1 1/4" radiator valves to replace the existing ones(assuming I can get out the male thread)?
After we got he new boiler on line we have had about 3-4 radiators(valves) that are leaking ! Is there anything we can do to stop the leak without replacing these valves ?

[Deleted User]

Raising the bar, or lowering the bridge...

Jeff, you know I have the utmost admiration for you and your work. What would worry me about taking that tact, is that it would give my competition the ability to point my pricing out to their customers and let them say "See, I TOLD you he's expensive..., why heck, I can do the job for HALF that amount!" Then, the unknowing, uncaring consumer gets sucked into their web without giving me so much as a phone call. Maybe I didn't want them afterall, but the opportunity to at least impress them with my telephone skills would have been nice:-)

I know for a fact that my competiton, er alleged competition sends me customers all the time that are trying to keep themselves honest. "And we use the SAME equipment that they do..."


Makes me want to come out with my OWN private labeled equipment... The Earthtron (what the heck, they can't pronounce my name anyway:-)) Hydronicizer. Let's see'em get their hands on THAT piece of equipment...

Let me know if your experiment works.

If nothing else, maybe it would open the competitions eyes to how much money they're leaving on the table...

ME

Paul Pollets

Not Recommended

I wouldn't be posting prices on the high end or the low end. It will further 'commodify' the process and leave you with even less business. You're in a similar position to me HB, only not in a major city loaded with software techs who sometimes can tell the difference between a Yugo and a BMW. Our quandary is making sure the prospect has a general idea of what we install and approximate budgets before going through the Herculaean effort to design a system, develop the proposal & close the sale.

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