charging for estimates

murph'_3

I do not see alot of bias in your post, nor do I see a bunch of pre-judged insults!! I have been watching this thread closely concerned about "my" customers and have cancelled a few rebuttles in the last few days to avoid flaming some selfish opinions that change like a political election. I have learned that many folks do not share a rapport with each other, and feelings of mistrust are very real. When things do not go my way I try not to take it personal and try to see it from the other prospective!!



Murph'

joel_14

charging for estimates

How many of you do this?? i've been thinking about it more and more. Especially this time of year for the A/C installs. In busy weeks I'll look at 12-20 jobs. Alot of these people are just looking for the low bid or trying to see who can do the job the soonest, " No mam you can't have it this summer. Can i interest you in a Febuary date so you can have it next summer?"
Now I've turned alot of price shoppers to value shoppers over the years once they are educated. So I've been wary of charging because then maybe i don't get into that door at all. Still I waste a huge amount of time. Is the cut down of people who say no way to paying for the estimate and the risk of loosing those you can turn worth it?
Plus it would help me generate some income. Even 50$ would be 500-1000 a week at my current pace. This of course doesn't begin to cover the cost of the overhead required to generate proposals but it would help dent it a little. Attn H.Os!!! perfect time here for your 2 cents!

hot_rod

I still feel

you can weed out the "lowest price only" shoppers by letting them know at the first phone call that you have a trip charge.

I imagine most consumers realize sending a truck and live, knowledgable person to their door costs money. Your phone answerer, dispatcher needs to relay this info in a polite manner to the customer.

While you're at it, ask if they would like to pay with check or credit card so the are aware that payment is due at time of service, in my opinion.

Start tracking the number of "no sales" estimates you go on each week. Figure your time and fuel costs. How's it add up at weeks end? You need to track that against the billable hours, as the techs working in the field are paying that tab every week!

hot rod

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joel_14

H.R.

When you say trip charge are you talking service or estimates???? If you mean service then we already do that . There are no free estimates for any service type work I'm talking new additions/ remodle, new A/c and ducts, new houses, new boiler etc. We try and tell them we are not the cheapest then they tell the secretary that "Everybody says that so come anyhow" Yes we track out all the time already.

Steve Ebels

Phone screening goes like this

"Yes sir, I can give you an estimate right now. The 2 1/2 ton unit you are talking about will cost between XXXX and XXXX dollars. If you would like me to come out and give you an appraisal of your system and an exact quote, there is a charge of XX dollars. This is to cover our costs of sending someone out who can properly size your system, determine if your present furnace and electrical system are able to operate the new a/c we are going to install for you. By doing this we can extend you our additional 1 year labor warrany at no charge. This is a XXX dollar value to you. Would you like us to come over and help you out??

Works for me. Also, in the place of a/c, substitute boiler, furnace, water heater etc.

Jeff Lawrence_17

estimates

As a Christmas present for my bride, I told her we would get her antique piano reconditioned. We have contacted several people just to ask them what would be done and to see if they could come out and look at it.

Every one of them told us there would be a charge to come out. Of course, this charge, varying from $50.00 to $100.00 would be applied to the final bill if we chose them to do the work.

Fair? At first I was taken aback by the audacity of these people! Then I realized they would have to drive out here and spend 15-30 minutes, drive back to the house/office, then figure out how much to do the work. I can agree with the charge. I also know it weeds out the tire kickers.

My suggestion is that you look long and hard at your market. If the hack in the next town charges nothing to come out and look and you do, who's going to get called and who may not? It really doesn’t matter if you win all the showcase awards at the RPA conventions, people may not want to pay just for you to come out and look.

The way I see it, there's no correct way to do it.

J.

DanHolohan

Ernie's Estimates (A fable)

Ernie had been building his business like a man laying bricks. He believed in being methodical, and he believed in doing things right. You advertise. You return calls promptly. You give estimates. You follow-up. You get the signed contract. You do the job the right way. You get paid. You advertise some more. And so on. Ernie believed in the Wheel of Business. Get that big wheel turning and things will be just fine. Deliver a good system for a fair price and your business will grow like corn. All you have to do is keep that wheel turning.

The trouble Ernie was having, though, was that his Wheel of Business had a big bulge in it. The bulge was right at the “You give estimates” part. Ernie’s estimates, like the estimates of just about every other contractor in North America were as free as oxygen. It said so right there in his newspaper advertisement. “Free Estimates!” it said.

“There’s no getting around it that I can see,” Ernie told Charlie down at the supply house. “People in this town want to know up front how much the job’s gonna cost. There’s no way you can get the job without an estimate. And you can’t charge for an estimate when everyone else is doing them for free.”

Charlie nodded his head in agreement. “Yer right,” he said.

“Trouble is,” Ernie continued, “before I can give them an estimate, I gotta go through the trouble of sizing the whole job. I gotta do the heat loss calculation. I gotta size the pipes, the pumps, the valves, the radiation, the boiler. Everything! I gotta figure my prices on all the equipment. I gotta put it all down on paper. I gotta go see them again and go over the whole thing with them. And then eight out of ten customers take my design and shop my price. And there’s always gonna be guys who are cheaper than me because they don’t do the sizing like I do. They just use my design and undercut my price.”

“Yer right,” Charlie said, having heard this sad story many times.

“But there’s no getting around giving free estimates,” Ernie said. “If other guys give ‘em, I gotta give ‘em too.”

And Charlie nodded. “Yer right,” he agreed once again.

Ernie got beat again later that day. He had given a free estimate to a homeowner the week before. This one hurt Ernie more than usual because he really thought he would get this one. The homeowner had an ancient boiler that had originally run on coal. Someone had converted it to oil years ago. The oil burner had a long gray beard. The boiler was about the size of Mosler safe. You could see tongues of flame lapping at the ancient metal through the spaces between the sections. The homeowner told Ernie he thought it might be time for a new boiler and that he thought the new one should be the same size as the old one so that they would have enough heat.

Ernie was very patient with this homeowner. He explained that new boilers were much smaller than old boilers. He also explained about how houses change over time. Old windows get replaced with new. Insulation gets added. The homeowner understood and was delighted when Ernie proved, by doing an accurate heat-loss calculation on the place, that the new boiler could be considerably smaller than the old boiler, and still get the job done. Ernie then went on to explain his method of piping and how he was going to control the system. The homeowner took a lot of notes while Ernie rhapsodized about what he would do once he got the job. “Whose boiler did you say you were going to use?” the homeowner asked, and Ernie repeated the name of the manufacturer. “What was that model number again?” the homeowner queried, and Ernie, now fully in the spirit of sharing what he knew with this layman, willingly gave it up.

A week later, when Ernie called the guy to follow-up on his free estimate, he learned that his stinking competitor was doing the job. “He was ten percent cheaper than you were,” the homeowner said. “And when I explained your design and told him what boiler to use, he was in total agreement. Too bad your price was so high. I thought you were very smart. Goodbye.”

Ernie wanted to bang himself on the head with the telephone.

“I must be out of my mind,” Ernie concluded the next time he saw Charlie. “I’m doing all this engineering for free and then some bum who does nothing gets the job. I gotta find a way around this free-estimate thing.”

“Yer right,” Charlie said, in total agreement, but without a solution.

The phone rang and Charlie picked it up. Ernie walked down to the end of the counter and poured himself a cup of coffee. “Yeah, sure, but be careful. Some of those old pipes break pretty easily,” Charlie said into the phone after listening for a few minutes. “Lots can go wrong with those jobs.” Charlie listened a bit more and then said, “Just give ‘em a high number and tell ‘em it will probably be less, but they gotta let you do the job the way you know it needs to be done.” He listened again, and then said. “Yeah. You bet. Good luck.”

“What was that all about?” Ernie asked.

“Oh, that was Freddy. You know Freddy, don’t you?” Ernie nodded and sipped his coffee. “Freddy’s quoting a job that’s got steam heat. The owner wants Freddy to give him a free estimate on changing the steam traps and some other stuff, but he wants the number to be exact. Freddy wasn’t sure what to tell the guy. I told Freddy to give the guy a high price and, well, you heard the rest.”

Ernie felt as though he had just heard the Voice of the Prophet. “Thank you, Charlie,” he said, grabbing Charlie’s hand and pumping it up and down.

“What did I do?” Charlie asked, but Ernie was already out the door.

That afternoon, Ernie was looking at a boiler that was older than meatloaf. It was sitting in the basement of a Victorian house. “Well,” the homeowner said, pen poised over notebook, “what do you think? What’s your estimate?”

“Well, it depends on what you’re trying to achieve here,” Ernie said. “Do you want me to just replace this old boiler with one that’s the exact same size of what you’ve got here? Or are you interested in saving the maximum amount of fuel from now on, while enjoying the most comfortable home this side of heaven. I can go either way – or anywhere in between.”

“Well right now, I’m just interested in a free estimate,” the homeowner said.

“Okay,” Ernie said. “I estimate it will be somewhere between a thousand dollars and twenty thousand dollars. It all depends on what you’d like me to do.” The homeowner started to gag, but Ernie just kept laying it all out. “For one thousand dollars,” he forged on, “I can do a complete heat loss calculation on your home, and engineer a system that will save you lots of fuel while providing unsurpassed comfort. Of course, it will cost more for me to actually install that system. Anywhere up to twenty thousand dollars, I’d say, but that’s the very high end. I’m sure the actual price will be much less than that, but there’s no way of knowing for certain unless I first do the engineering. Then, I’ll be able to tell you for sure. And as I said, your investment in the engineering will be a thousand dollars. But I’ll tell you what. I’ll deduct that charge from your total investment in your home once you give me the go-ahead to do the work. You can’t lose.”

“But your competitors are willing to give me free estimates,” the homeowner sputtered.

“So am I,” Ernie cheerfully replied. “In fact, I just did. You can choose between my engineering service or my engineering-and-installation service. If you choose the latter, the engineering service will be absolutely free, and I’ll guarantee the results of my work – in writing. If you’d like only my engineering service, I’m afraid I won’t be able to guarantee the results, however. Other contractors are simply not as good as I am. And I have no control over their slipshod way of cutting corners.” And then Ernie gave the homeowner a smile you could pour on a pancake. “Like to see some references?” he asked.

“But,” the homeowner said, “I thought you were going to give me an exact price. Can’t you give me an exact price?”

“Sure!” Ernie said, but that’s not an Estimate, that’s an Exact. Exacts aren’t free. Exacts cost a thousand dollars, but I’ll deduct the price of the Exact from the total price of the Done. As soon as I am done, that is.

“You don’t work like other contractors,” the homeowner said.

“I know,” Ernie replied. “I’m much better! But we do still have free Estimates, You can’t be in business around here without free Estimates. We charge only for the Exacts and the Dones. That’s fair, isn’t it? Now, how about those references? Like to see ‘em?”

He got the job, of course. And ever since he made this minor adjustment to his day-to-day life, Ernie’s Wheel of Business has been spinning in perfect alignment.

Steve Todd

one HO data point


One Home Owner's data point:

- I agree with Dan's fable: engineering/'exact' estimates are work done, are worth money and should be paid for.

- charging for estimates for more routine/standard, clear-cut, work is iffy.

- to charge $50/100 for the first-time visit, to eye-ball the site is iffy:
-- during the first telephone conversation, the Contractor must appear professional, intelligent, etc. Worthy of the charge.
-- during the first telephone conversation, proactively offer appropriate references. The HO could call those and decide if the charge is worth it.

- Remember, the first-time visit is also when the HO checks out the Contractor. (Across trades, I've had guys show up unshaven and hungover from the night before; blow-off appointments to go to the beach; speak half-truths; etc. No one here, I'm sure.) The HO may wonder why he/she should pay for this.

hot_rod

The only problem, Steve

is they hear only the low XXX price and thast's what they want when you get done spending the time at the estimate call! You have set yourself up to be negotiable down to that low number

How many times can you come in at the low end after seeing the job? 9 out of 10 times there is more "clean up, repipe, code upgrades, etc" then you can see over the phone.

hot rod

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Bryan_5

Thats a great story Dan.
As a homeowner and a sales person I agree with Steves method. You will screen out a lot of the tire kickers. And the psychology of the fact that they paid you XXX amount for the estimate almost forces them into having you do the job, they dont want to lose the $100 or what ever even though you may charge 10% more than the other guy.

In my opinion I think you need to sit down and figure out how much you are worth an hour. The way you do that is figure out how much you get paid when you are doing activities that you are being paid for, not paper work, or free estimates. That may be $50 an hour or $100 or $200. You may be suprised how much of your day is spent on things that dont make you any money. Remember this number is not the same as what you charge for labor. Lets say its $100 an hour and you do 15 free estimates a week thats $1500 a week X 45 weeks a year thats $67,500 a year wasted. You need to figure out of the average 15 estimates a week how many do you get now? If you start charging for your time you may only do half as many estimates but you will get a higher % of these people to actually buy from you than the other way. You will wind up making more money and having more time for your family. Sorry I got long winded just my 2cents
Bryan

Tom Meyer

I was thinking...

of all the services and professions we pay to get "estimates". When I take my car in to have it checked. I get an "inspection fee" unless I have the work done there. When I get my eyes checked, there is an "examination fee". When I go in for a physical, there is a fee. Look around. Computers, TVs, even "The Big Box" charges a "measuring fee" for cabinets and carpet measures.

Are we so different? I wonder.

The time spent doing "free estimates" costs the business owner something. Wages, fuel and at an absolute minimum, a thing called opportunity cost. You could be doing something else with your time. Where does the money come from to pay the overhead for free estimates? Simple. It comes from the sales we close. The customers we DO get to sign on the dotted line pay for the tire kickers. Someone has to pay for the cost.

If you charge for estimates, sure you're going to be doing less estimates. But what do you think will happen to your close rate? People who understand the cost of doing business are probably serious about what they're doing, undertstand the costs involved and I suspect will be a whole lot easier to deal with as the project moves along.

Senior Designer/Trainer
Precision Hydronics Corporation
www.precisionhydronics.com

Joe_13

Bad idea

Think that you can control the customer and force him to give you the job because you charged for an estimate is a dangerous move. If that's the way you bet, good luck. As a home owner, I won't play that game.

I understand most repairs are not worth a drive out for an estimate and a radiant floor instalation is complicated and requires a heat loss calc to figure out material and instalation hours needed. If you need an hour or more to figure out the costs then I understand the need for an estimate charge. But don't walk in and walk out of my house in ten minutes and expect to be paid for a quick once over. Explain the work required in giving that price to the customer. If he doesn't understand that, say good-bye.

A boiler replacement estimate should state that the final cost is based on a heat loss calc to size the boiler (once you're given the job). Using the current size system as a baseline will probably be slightly bigger then needed, but the diffence in a 3 or 5 secion boiler is probably under a grand difference.

Bottom line: An estimate justifies your costs to the customer by giving a bill of materials and labor hours required. I think an estimate charge should also be justified to a customer.

Bryan_5

Joe,
I was not saying you could control a customer with having to charge him for an estimate. All I was trying to say was most people do not want to lose that fee if they dont have to. It is still there choice. If they want to go elseware they are the ones making that decision. I also am assuming that this is a reputable contractor that will take the time and give value for this fee. If you dont give your customer value you will not be in business very long.
Bryan

Joe_13

I agree 100%

Bryan, saying it like that, I'm with you. I just had an HVAC guy set up a ductless mini-split heatpump for me and I asked him about a boiler replaement with an indirect, while he was there anyway. (He does heating/ac and a oil delievery also). He looked at it for 30 seconds and threw a round about figure at me.
I would have been steaming if he was going to charge an estimate for that. His lack of interest and cheaper heating equipment will not get my boiler project.

John Fernandez_2

FREE...........

AIN'T NO FREE LUNCH.......EVERYTHING HAS A COST TO IT, SOMEBODY HAS GOT TO PAY. THIS WORKS FOR ME: I TELL THE HOMEOWNER THAT I WILL CHARGE X-AMOUNT FOR THE ESTIMATE AND THAT IF WE ARE AWARDED THE CONTRACT, THE ESTMTATE COST WILL BE DEDUCTED FROM THE CONTRACT AMOUNT, NATURALLY THE ESTIMATE COST IS BUILT INTO THE CONRACT PRICE. IT'S ONLY FAIR TO US.

kk_2

I can see charging for a full-up estimate that has heat loss calculations, proposed components for the system, etc. However - I would probably want to have a potential contractor come in BEFORE doing that and just get a general ballpark idea of what he would propose and to see what the guy is all about.

I should not have to pay to decide if I think the contractor is even somebody I want to work with.

Maybe a bad analogy, but if I went to a car dealer to look at a new car, I would think it was pretty funny if they attempted to charged me a fee to spend time talking to a salesman. Sure, time is money, but in this situation (at least for the initial contact) you are just that - a salesman who is trying to win a sale. You should at least be willing to talk to potential customers about general ideas for their system without demanding that they front you some money.

Just my opinion - if you disagree I don't mind. :^)

Paul Rohrs_2

Sell Sell Sell Mentality

A plumbing contractor called yesterday. He has recently "hung his shingle" and is getting grounded in the nuts and bolts every day pricing of how wholesalers operate. He wanted the price of a 50gal Nat Gas heater. I Had not even finished telling him the price when at the other end of the phone I heard, "whah..." I was $10.00 higher than XYZ sales.

Copper tube is a commodity, the price fluctates daily anymore and we have to watch our purchasing to stay competetive. Water Heaters are basically a commodity now even though the price usually only goes up once a year. It would be more accurate to say that it is a "loss-leader" item in that we are not sending our kids to college with the sale of 40 and 50 gallon heaters.

The contractor wanted to negotiate price. Fine. How many would you like? A resounding, "one" was the reply on the other end of the line. I just stated that matter of factly we justify our ($10.00) higher price by delivering it out ASAP (Now) and carting in the new heater down stairs and carting the old one, (hopefully drained) out.

Okay Paul, where are you going with this?.....

I give out prices and quotes all day everyday knowing full well I am going to be high, low, and in the middle. It is the service that makes them come to us, or rather, us coming to them when they need us.

You can go anywhere in town and buy a gallon of milk. If you have to pay $1 more, or stand in line 10 minutes longer, or or or....you will go somewhere else.

How many of you contractors are shopping prices? I would say if you are running your business like a business, all of you know pricing and which wholesale company is the most competetively priced for the service and materials they receive.

Oddly enough, we are super busy and our water heater service is going well. We average about 172 40-gal heaters a month. Service is still worth the extra money I guess.

PR

Mike T., Swampeast MO

Art

is really only "free" if you make it yourself and then it depends COMPLETELY on your personal abilities.

Only altruistic dummies who question their own experience/abilities and enjoy exercising their brain cells are willing to give it away.

Hydronic heat was, is and always will be an art! While good tools are available to ALMOST turn it into a craft, the essence is creating a stable, predictable environment in an unstable and unpredictable world.

Artists who make their living through their art tend to get testy--particularly when they feel others less skilled in the art "steal" their methods. Whether this is done for lack of ability of plain laziness, this is the essence of Dan's fable.

Like a kinetic sculpture, hydronics is ART IN MOTION. Its environment creates a simple beauty of motion that inspires fascination by its very simplicity.

Homeowners: Unless you have the time and ability to develop that art for yourself accept just compensation to those who have. You will BOTH be pleased!

Steve Ebels

But

If they say yes, then your in the door, standing in front of their equipment with them by your side hopefully. That is the point at which a good salesman will be able to educate and point out to the customer what needs to be done during a fair and honest appraisal of their system. I know it's an unwelcome word to some but SALES are where the rubber meets the road. The guys that are able to sell themselves, their companies and their product, do well. The customer leaves the conversation with a thorough knowledge of what his system needs and what you will do to take care of him. You leave knowing your not going in blind and with a good "map" of what your techs have to do.

All that being said...... It's our responsibility to the customer to make everything clear, no grey areas or "it'll be *about* $XXXX. I've run into a lot more people who are unhappy because someone told them they could do it for $X and then when they got finished it was $XXX more than I have who were unhappy doing it the other way.

No-one lands them all, the customer has the right to make up his/her own mind about what you have said.

MikeB34

Apples and hand grenades.

It is a bad analogy...YOU go To the car salesman...he has to be there.. In this case The contractor has to go to your residence..this is his time,gas and $ that could be used to do installations.

I am a 1 man operation witha very good rep...I am almost never the lowest quote. I am willing to educate my clients about low-ballers and how its not always the way to go. They know up front that I will NOT low ball just to get the work.
I do not give free quotes per say. I charge 20$ to go to their home. (My time MY money) If they want to meet me at a job site, I have no problem.. they can see my work, and I just schedule a break time. No charge for these quotes. Its their gas and a lot of THEIR time. I don't do phone quotes except for equipment costs based on their request (ie 2 ton a/c with a 60,000 FAF). These are plus installation which they are told will vary, and a re subject to site inspection (see 20$ chg). Faxed quotes are no charge and are limited by the above. But I have a disclaimer for any quote without site inspection that CLEARLY states "subject to site inspection. This estimate is based on information provided solely by the home-owner."

I hate being tied down.

I do not get specific (like Ernie...Great story by the way Dan)except on site inspected quotes, and then I don't divulge my designs unless we have an agreement. (I do Forced air installations, just service hydronics no installs). And I guarantee that it will work as promised or I will fix it so that it does..no extra charge. This usually a clincher as too many "2 men with sledgehammer willing to install furnace.." types knock em in and walk away, or charge extra cuese they didn't foresee a particular problem.

There's my nickle in the pot.

Best of luck on whatever strategy you go with.

Unknown

just a comment

The analogy would work better for me if, either

1)The car dealer brought the cars to your home, at no charge

or

2) You went to the contractor's place of business during open hours to meet him. No charge.

Noel

Dan_8

... and analogies

I've heard the art analogy in many areas where there is more than one way (and perhaps an infinite number of ways) to get a job done. Personally I agree with it and really do think that processes of this nature require a bit of art in them for the final product to be beautiful. That said though, I think that your second sentence is a bit out there. Many people give away their experience (or art if you like) for all sorts of reasons and that doesn't make them dummies or unsure of their abilities. I'm not saying that people should feel obligated to give it away either but please don't make giving it away a negative.

As far as non-pros practicing an art... I don't paint but if I did and I chose to hang my painting on the wall would that be silly? Not if it made me happy and I enjoyed doing it. Most folks would rather buy some art to hang up but if I liked to paint there's nothing wrong with that. Admittedly a painting isn't likely to hurt as much as a boiler when it blows up so I guess that's where my analogy falls down ;')

Anyway, I hope that came out conversational and friendly since that's the way I meant it.

Mike T., Swampeast MO

Sorry for the self-indictment there. It's CERTAINLY not meant to go against my belief that knowledge is best when shared and most advances made through criticism.

Remember, you titled it "The Lost ART of Steam Heating", not "The Lost Craft..."

Of course it's not silly to produce and display your own art--be it a painting on a wall or the wall itself. If it's the wall though, you better be certain that it's sturdy!

"Anyway, I hope that came out conversational and friendly since that's the way I meant it."

Both taken and reciprocated!

MikeB34

you got it

Sorry I ranted...but you summed up my post. I really hate the low-ballers who don't care, thenI get to fix...I'm not saying that all low-ballers are hack.NOT AT ALL. you gotta take lumps to get started. Its....AAAAUUUURRRRGGGGGHHHHH!!

know what I mean?

Mike

kevin_5

Very Helpful!

Thanks a lot
guys for all you wrote here. I think this is one of the most helpful threads I've read in a long time.
I must admit we've done more (free)estimates and lost them than I care to think about. We had booths at 3 homeshows this spring, and I don't just sit there, I talk to everyone who goes by and try to educate them. "Put your hand on this tile. THAT'S radiant heating!" Many will stop and listen when they feel the display. Then I spend a few minutes telling them the benefits. Boilers are a great part of the display here because relatively very few people have them and are a bit scared of them. The only one they ever saw was in Grandma's scary basement when they were kids. I tell them they are like computers. It used to take a whole room, but now it would fit on a desk top, and is much more efficient too.
Most of the bids we missed were people who weren't willing to pay the difference for hydronics even though I really worked on showing them the difference. I just figure I didn't do a good enough job selling them, but will keep at it and get better. (every time I read "Just add h2OH", I am convinced I could sell American flags to the Ayatollah.)

Believe it or not, I had one couple OFFER to pay me to come look. Later they actually called me to say they weren't going to do the system, and once again offered to pay me for looking. How many folks like that have you ever ran into?
I also learned about giving out designs with quotes; we don't do it anymore.
My Dad is a truckdriver. Years ago he quit the company he had worked for and went out on his own and bought his first truck. He had much aggravation with local farmers who were hauling grain in the winter as a sideline.
They had semi-trucks they only used once a year for harvest anyway, and not a lot to do if they had no livestock, so they were hauling for next to nothing.
Dad would tell the customers that cheaper is not always better, and that he might go broke, but that he was not going to wear his truck out AND go broke at the same time.
I guess that is a philosophy that could apply to us too.

I really appreciate you guys. For my part, I commit to always operate in such a way that none of you would be ashamed that I'm a part of the wall. I believe you are the same way. Thanks again, Kevin

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Dave F.

Cost of doing business

Yours or the salesperson salary should be covered under overhead.Itis frustrating some times when you get a arun of turndowns but unless something is way off it will come around.Dave

heretic

Disagree

Sorry folks. From the other side of the table, I disagree with the majority opinion here.

I would not consider paying an estimate fee to an unknown contractor. Perhaps if he/she came with a great reputation from credible sources. Perhaps if I had seen his/her work in person at a friend or neighbor's house, and it blew me away.

Otherwise, the contractor is an unknown entity, demanding payment for unquantified expertise.

Now, if you could sell me on your competence over the phone, maybe... However, If I am able to sell myself as a customer you think you want to do business with, no fee should be required. With a fee, the entire business relationship would be starting on the basis of mistrust. The face-to-face is your chance to 'close the deal'.

Just remember, pre-screening cuts both ways.

I'm the best sort of customer you could imagine, and if you have an estimate fee, I'm probably not going to hire you.

Hey, so long as business is good, I suppose you can demand whatever you want.

Unknown

What is the customer's obligation in qualifying contractors?

Is it fair to contractors that you want to qualify them all in your own home? I remember bidding jobs that ten contractors bid, the same ten every time, because of the area, and each time, I could guess reasonably certainly which contractors would get these jobs, especially if the customer hadn't done any homework. They want ten prices to pick from.

I wouldn't cut the job to bare bones, so I would drag my feet quoting it, putting real work ahead of those quotes. I don't regret it. Tire kickers don't pan out a lot more than they are worth. They might be ready to buy, but until THEY know why they want my work over someone else's work, I don't put a lot of time into the job. I won't drop my standards due to pricing competition. I was swampped with work, anyways.

In all fairness, I no longer quote jobs. Things may be different today.

Noel

chuck shaw

You say/ I hear

So, what I hear from you is, as a somewhat educated, but by no means fluent in the heating industry homeowner, is that you are now qualified to judge what I know? I have listened to auto mechanics spout "gear-head" babble and the car still wont run right. The same with heating people, but, because it is what I do for work my Bullsh*t meter kicks up.

I also hear from you that my time is worthless to you, unless you are seeing wrenches fly, and hearing a torch hiss.

And yes, pre screening does cut both ways. But letting someone know, that you as a customer are interested enough in something, that you are willing to pay a small fee for me to come to your home, and spend at least an hour with you, then go back to my office, and do some research, and check price and availability, then write all this down in a clear and orginized format to help you in your decision making process. You tell me that is worth nothing???? That tells me alot about you.

When I first went into buisness, a gentleman called me for an estimate to install a bathroom on his 2nd floor. I gave him a price. He said he would get back to me. About 6mths later he called me, said he wanted me to come out and go over a few things. I told him I would update the price if necessary. He couldnt believe that prices went up. Then about 6 mths later, he called again. I finally asked if he was just kicking tires, or was he serious about doing the job. He told me he didnt want it done, but his wife was on his back about it. He was having me come out to "check things out" to keep his wife quiet. If, I had set up a charge for the initial price quote, I would have saved myself about 6-8 unbillable hours.

Those hours are worth something to me. If am reading a book, taking a nap, watching the grass grow or any other activity.

Charging for a full heat loss, sizing a boiler correctly, and knowing what is truly involved in the job saves us (contractor and homeowner) time, money and agrivation.

As a homeowner, I would not hesitate to pay a conractor to give me an accurate price on a job. I would have a lot more respect for them, and think them more professional then the contractor who shows up, takes no notes and is in and out of the house in 10 min.

JMO

Chuck Shaw

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paul lessard_2

hey chuck look,right in front of you!

there's a bike rider on route 6 in the center lane ,he's waiving and asking about a free estimate..
how goes the battle bud? paul..

Chris_4

here is the way I see it

there has to be a small fee to come to the house. It is time and money out of your pocket if you don't. now if they want to come to your office.....different story.

say you charge $45.00 to show up and diagnose the problem. you can tell the customer that the $45.00 fee is deductable on the final bill if they decide to use you. you would NOT be giving them an estimate, but a "bid" price to complete the job.

If they don't want to use you, and think your price is higher than they should pay, fine, they pay only $45.00.

The customer is told this BEFORE anyone is sent to the home. I think this way saves a lot of headaches in the end, and weeds out the low price shopper...............hey they can always call the "moonlighter".

Eric Taylor_35

$.02

I don't consider myself the average home owner, but if I were taking bids on a job, any job, I would tend to go with the contractor that seemed to be both the most knowledgeable and genuinely intent on satisfying my needs.

There is no way a heating install or upgrade can be accurately estimated without some homework. I learned that here! That homework takes time and time is money, so getting a realistic quote for work that will fit my needs SHOULD cost me money. It will definately cost YOU money.

Lets say I am fortunate and several contractors are more than qualified to do the job. I don't know this up front, so I have to pay all of them to do an estimate and the results are similar. Now I'm out quite a bit of money and still haven't made a decision yet.

I'm thinking that I haven't hired you untill I sign the dotted line on the contract. The estimate is your "interview" to see if you get the job or not. Do the estimate for "free", but roll the cost of generating it into the quote and you will be paid for it IF you get the job. It motivates you to keep your pencil sharp, and when the HO sees what YOU do for him compared to Bubba just for the estimate you will get the jobs you want and loose the ones you don't.

I probably got change coming on my $.02

Eric

chuck shaw

again, you say/i hear

You say "keep you pencil sharp", I hear, I dont care what your cost of doing buisness is, I dont care if you are hear next year to service this, all i care about is getting the cheapest price for what I want.

JMO

Chuck

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Eric Taylor_35

not how I meant it

I mean keep it sharp Chuck because you have competition not because I'm looking for the cheapest work. If I were looking for the cheapest work I wouldn't hire you anyway. I'd get Bubba every time. Bubba gives me an estimate over the phone and seems to know exactly what he is talking about. I don't know any better. I'm John Q. Homeowner and I've never been to The Wall. All I know is I don't want to pay one guy more if Bubba can do the same work for half price! I won't find out till next winter that it is NOT the same work, but right now I think I made a smart choice. I couldn't care less what it costs you to be in business. I only care what it costs ME. Remember I'm hiring you! You have to prove to Mr. John Q. Homeowner that he will get better work from you than from Bubba. Charging for an estimate won't even get you in the door unless everyone else does it too.

So Bubba shows up, looks it over, scratches his butt and gives me a price. YOU show up and count my windows, ask me if the attic is insulated, measure my rads, and write stuff down. Then you send me an email with a rough heat loss calc and tell me my old boiler is too big by half and if I spend a bit more than Bubba the install will pay for itself in comfort and efficiency in just a few years. Now I have to choose. If I go with Bubba after all this, then you never had a chance in the first place because I don't care about comfort and efficiency, just money. If I go with you then your work for the estimate is rewarded and I get what I want too.

If I get estimates from three guys who are NOT Bubba--lets say Mad Dog, Scott Milne, and Boilerpro ALL send me the right info with their estimates then I'm right back where I started. How do I choose? Price. So keep it sharp!

Eric

murph'_3

but chuck......

this gets to be like a sport for folks!! especially the semi-educated, who seem to feel that your presentation should be free of charge no matter what your cost are. You should not be watching the grass grow, you need to be loading the truck for monday morning!! you need not read more books, you should know this stuff by heart!! why you need sleep, perhaps at that time you need to be working on the books and finding out how you will close out the month! we are professionals and should cut corners so we can save folks money, but do not cut my job just save me money, pass it on to someone else!! send out a salesman to wear nice clothes and be trained in the field to explore options so these well intentioned folks will be educated in what provides solutions. make appointments and do not be late!! do not park in the driveway and give the dog a bath, all for $xx.xx like the other guy down the road, not $xxx.xx that needs to be charged so the wife need not take another job to be able to make ends meet or so we can get that new mini-van and spend a few hours of our structured time at the civic functions to make us feel better!!



what a bunch of hooey!! I see a bunch of folks who do not do this work, wanting/suggesting how this works in a rose-colored world they live in. I see a lot of suttle little remarks being made from people that do not do this work, to what they percieve is value or the best bang for the buck. What I hear from these guys here is to do the job correctly, and most importantly safely!! whut all this at a low price, oh thats right lets compete with the moonlighters and "joe troll" DIY cause your jobs do not kik the crap outta ya to the point where ya just do not care to put more than 50hrs per week in. again this sounds like a sport to people' just like the giddy "power shoppers" at the mall.



I must admit I am holding back quite a bit in respect for this site, but somewhere along the line humans being what they are there is lots of mistrust and misconception about what is fair and accurate about the trades. And also third hand info being passed around by people outside the trades. but i feel "free estimate" is a bad word, and it leads to alot of bad systems!!



Murph'

hot_rod

So Eric

you feel Mad Dog, Scott, and Boilerpro, maybe 50 years worth of combined experience, should all spend several hours, gas, drive time on your project for free?

You do get a product when they are done, their expertice, not unlike what you pay an attorney for, an opinion of risk, based on his knowledge.

These three may (should)all leave a detailed heat loss and design with you for that "fee" Does that not have a dollar value?

And in the end the choice is not just price, as I doubt all 3 would have the exact same proposal. Now you balance the contractor, the proposed solution, the brand, and type of equipment, former jobs, customer referals, etc Then decide based on the VALUE, not the bottom line. It may very well be the high bid looks like the best buy after all considerations are weighed.

Curious as to what you do for a living?

hot rod

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Jackchips

\"First consultation Free\"

That's what most lawyers in my area advertise.

I thought Eric made some valid points. If I read him right, he has a pretty good suggestion. Offer the first consultation free to meet the customer, put your intitial marketing strategy to work and offer all your services. This would be the opportunity to discuss design, rather than quote, fees.

corey

Not getting anywhere

Well, clearly the HOs are not gaining much ground here.

In the 'outside world', folks do not typically get paid to go on interviews. Ok, maybe lawyers, but let's set our aspirations higher...
For this reason, when customers balk at upfront fees from an unknown entity, they are probably not actually questioning your competence or saying that your time is not valuable. They simply do not know that you are the best on the block. How would they?

Look at it this way:
How many posts on this board are about shoddy work done by 'the last guy'. Realistically, what is the probability that a HO has already received poor service from a contractor at least once? How does the HO know that you are not 'the last guy' if he has never met you or seen you display your capabilities?
Would you really blame them for shopping around a bit before making a major expenditure? Are they really just doing this to waste your time? Will they presume that contractors with upfront fees must somehow be better than those without?
Business is good, at least for contractors in my area, so I suppose you can do pretty much whatever you want and stay fully booked. I just think it is the wrong approach.

Some alternate suggestions:
How about better phone screening? What if you asked the customer what they are trying to accomplish? What if you asked the customer straight out how many contractors they are considering, and what their decision criteria is going to be? This could prove very enlightening and present many 'selling' opportunities along the way. In fact, every good question you ask about the customer's needs serves to build your credibility. Instead of presuming the customer is going to waste your time, and premptively slapping them with a 'nuisance fine', ask good leading questions, and listen carefully to the answers.
Bet you would be able to tell the difference between a customer that is worth pursuing, and one that is kicking the tires just about every time.
JMHO

murph'_3

loss leader.......

these "free" consultations are just for the attorneys to see if they have a case in court good enough to win!! show me the money would be the slogan, if not they decide not to take the case. Or at best throw out an enormous figure as per what they will charge, I would have thought most would have figured this out!! sort of like the supermarket throwing turkeys on sale during the holidays to get people in the door to pay for cranberries. Different game!!

Unknown

Customers are skipping the point here

In their mind, nothing should prevent them from having as many contractors as they decide come out to their property and donate some time and advice to them.

You WON'T get 10 lawyers to drive to your house and give second opinions of their competition, when they KNOW FULL WELL that another is coming along right behind them. In Fact, you have this one backwards. One lawyer parades ten of you customers through HIS office on YOUR time. Hmmm.

What isn't being addressed, is that it didn't used to be this way. Customers had a regular company, a repeat business, type of thing, take care of the heating equipment. They got equipment, but service came with it. Loyalty meant that they ALREADY KNEW the contractor. They likely had a couple quotes from the other established contractors in the area, and bidding was pretty fair. The MOST IMPORTANT thing was usually the man or woman that did the work. Still is, as far as I'm concerned.

When you remove that part of the bidding process, and it is down to ten companies playing poker in your kitchen with bids, and the customer has no problem with this situation, I'm out of there. I'm not coming back.

The contractors that get very good at winning that game are not installing the same as I am.

If it's about the money, then you are asking me, "Is there anything that you can leave out or cheapen up from your already lowball bid?"

Not if you expect me to warranty it. I can make something that barely runs, and is a little controlable, but I'd rather not. You'd hate it, and my reputation would suffer. Pretty soon, the only jobs I'd get were the ones that get ten quotes, but don't know my reputation. I can tell when I'm there, 'cause all the other bidders are just like me, and Ace Quality Heating showed up, but turned around in the drive and left. The rest of the guys are ones I know, but none of the trucks are lettered, so a passerby won't know who is doing this. I know how to bid these guys! (notice that winning the bid is the game, to hell with the customer)

Yeah, buddy. If you don't have it narrowed down to quality, and you are shopping price, you'll get what you're looking for.

I'm not fixing someones else's install, either. I service what I sell. I don't sell fuel, or plumbing. I'm there when my customer's need something at night or anytime. I AM willing to sacrifice for MY customers. Don't get me wrong.

I just don't NEED the grief.

hot_rod

A good point, Corey

Maybe this is where a webpage could be an important tool. After the initial phone conversation, as you mentioned, the shopper could view your website to see completed jobs. References could also be posted for the shopper to contact.

Every picture tells a story. A picture is worth a thousand word, etc, etc.

I DO see both sides of this discussion, as a one man shop I just can't afford to free estimate all week, gotta pay my bills, and it would be hard to "load" 6 free estimates on to the next buyers. In my low population area I travel a 100 mile circle, or more, to find hydronic specfic work!

A combo of good phone screening, websites, and referals may be the ticket.

I also invite every potential customer to my shop and home to see my work and allow me a chance for some one on one, without me doing all the traveling.

Plenty of compromises, ya just need to find the combination that works in your market. I do feel face to face meetings have much more impact than a phone or e-mail conversation.

I.e the Wethead Gatherings that attract hundreds of contractors, manufactures, reps, and suppliers from around the continent. We spend hours a week here, but nothing compares to a "gathering" for really getting to know one another.

I suspect homeowner and potential customers show up, also, maybe under the guest alias. I would if I were in the market for a contractor in Colorado!

hot rod

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