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Charging for Estimates? Maybe you should change your focus to more important game changing facts.
We should not work for free—we need to be paid for our time. I think there is misinformation around “free estimate” or “free bid.” I have been in this industry for many years and have felt the pain of remodelers putting in long hours to put together proposals, so my thoughts aren’t mere speculation, but an observation of what works. Too many remodelers think that charging for an estimate is the answer. If you already have a struggling business, how can charging for an estimate benefit someone? Is it to weed out bad leads or qualify them better? If it is to get paid for your time, then focus on getting to the design agreement quicker, by using effective and smart marketing & sales strategy/tactics! Become more profitable by not competing on price and make your business the preferred choice! Focus on the real profit, selling, building and getting paid on the project!
My primary focus for my remodeling business has always been positioning my business as a leader in the marketplace through an excellent and laser focused marketing objective. I wanted to brand my business, build trust with customers and have a strong emphasis on building a solid relationship up front. The process was to be an expert in a niche market, focus on my ideal client, draw in quality leads and to educate them before we ever first met. There is a marketing process for this and those that do it well, have thrived. It was and still is imperative to position yourself as an expert.
I look at Darren Salyer, of Absolute Basement finishing. His basement remodeling niche focus has helped him brand his business. Darren has made Marketing a priority for his company, and in these tough times, he has actually raised his prices. Absolute Basement finishing’s sales volume is up by 50%, compared to YTD sales at this time last year.
I look at Paul Klassen, of The Pinnacle Group. whose business is also growing substantially during these challenging times. His success comes from creating a marketing initiative that focuses on his ideal client and a detailed sales process. The Pinnacle Group has made it a focal point to make marketing their business a priority. He ISN’T building one of the best renovation businesses by a quick fix mentality or a new direct mail campaign, a Pay Per Click campaign, or the marketing event of the week mentality. The Pinnacle Group is building a consistently growing business by creating “a true marketing business,” that happens to also renovate, …by focusing on a niche, their ideal client( quality leads), and fine-tuned sales process, along with a complete a marketing focus and they ARE thriving.
Both of these remodelers are in a metro area or market where many other remodelers could probably say they are floundering.
What are these businesses doing differently? They made marketing and sales a priority! Many people currently are not in the position of these two business, but at one point these two were not where they are now either.
How did they get there? It wasn’t by wondering if they should charge for an estimate, ….it was from making their best effort to ensure that their clients were their main focus, by educating them before they ever met, connecting emotionally when they did meet, by positioning themselves as unique in the industry, and drawing in a customer that wanted to choose their business to remodel with. This is profitability at its finest, and neither charge for an estimate and are very profitable.
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From the Remodeling Magazine Blog
There are two essential elements to focus on when you plan a business marketing strategy.
One is Educating your potential clients, and the second is to become creative by Reinventing your marketing. When you’re planning a marketing strategy, think of reinventing your company and being creative. Whoever said “if you keep doing the same thing expect the same results,” didn’t own a business. If you keep using the same marketing strategy and expecting the same results, the business world could pass you by. Methods that worked well in the past might not work now or in the future. To effectively market your business, you’ll need to re-invent your company.
When you educate your ideal customer and guide them through the buyer’s cycle of getting them to “know, like, and trust” you, you’ll make considerable progress towards earning the project. One of the purposes of your marketing process should be to provide clarity to your customers and clients–basically, walking a prospect through the process, which allows you to convert more prospects into clients. Creating a plan to lead clients through this process really forces you to create a marketing process and is the beginning stage of a true marketing system that helps your company convert leads to clients. It helps you take someone who shows an interest in your business and using that momentum to make them a client.
One step in the early stages of the buyer’s cycle is allowing the prospect a chance to get to know you and your team. Effective marketing is about getting in front of people with frequency, with their permission and providing great content and useful information. Ideally, this stage should be about education and building trust by sharing your expertise, and should involve the concept of permission marketing.
Permission marketing is the privilege of delivering a personal and relevant message to your ideal client. Your ideal client should expect and want this information.
Here is an example of permission marketing:
Develop a “white paper” of useful information your potential clients value. If you are a kitchen designer, would your customers be interested in an information packet called “The Best Modern Kitchen Designs?” If your ideal clients desire modern kitchens, take control of this niche by educating them on the topic. Create a form on your website that allows them to request this valuable information or “white paper” and receive it via e-mail, or by downloading a PDF from your website. This will make them feel as if they are receiving something of value. This is a great way to engage them and begin to lead them through the steps of the buyer’s cycle.
The information packet is just one idea to start potential clients on the path of the buyer’s cycle. Identify specific methods you use in your business to walk a prospect through the sales process and create a system that takes them from that “know, like, and trust” to buying, referrals and repeat business. Remodelers don’t have any difficulty thinking of systems for building a project, but they rarely develop one for marketing. Now, to reinvent your company, deliver this “white paper,” in a unique way or one that is different than your competition:
Not only have you provided excellent content, but you are positioning yourself as an expert in the subject in your potential clients eyes and networked with a tradesman, or a strategic partner in your field. Do you think if it’s valuable this potential customer will forward the link to friends? It’s easy to use a Flip Minot camera to take a video and upload it to YouTube or burn it to a DVD. Emotion and passion drive successful people in our business and it is that same emotion and passion that creates something that is unique and different. Find creative ways like this to deliver your message to prospects.
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I was just working with a renovation firm in Calgary, Alberta named The Pinnacle Group. Paul Klassen is a smart individual and has developed one of Calgary’s premier Renovations businesses. His focus is on Building relationships with his clients and his team is dedicated to that vision. Our marketing efforts have been geared towards enhancing his clients experience, being unique at every turn and creating an advantage. We are tapping into the emotional aspect of his clients and how they make their buying decisions. Why this focus on the emotional aspect?
Many remodeling and home improvement business owners, or sales people, are pre programmed or wired to prove they can be trusted to the customer. Company’s consultants or representatives may expend too much work and time trying too hard to impress others, and in trying to earn the trust factor with their potential clients, that they miss the whole essence of building the relationship with the potential client. We have to remember that remodeling is still an emotional decision and in order in develop a solid relationship with your client, like Pinnacle Renovations, there needs to be a focus on your client.
How many remodeling businesses are showing the cost vs. value report?
Is this really the direction you want to go right now? Is it really? Should we be talking about the investment value or the real reason people are remodeling today…..because they want to make there house a little more like home! An emotional investment. Emotion usually wins every time!
A researched the 1929 stock market crash. Assistant professor Anna Scherbina found that a decade before the crash, there was a booming real estate market in New York city that she says resembles the housing bubble of the 1990’s and 2000’s. She extrapolates from the research that “owning a house is not necessarily a lucrative long-term investment based on its long-term exchange value.”
Nina commented;
I’ll grant her that. During our most recent boom, many people bought and sold houses with the sole purpose of making money. However, most of the public and the government realize that ownership goes beyond making a quick buck. Homeowners are invested in their neighborhoods and have a strong connection to the community. Buying a house also hits us on an emotional level. Some of it is scary–like the panic I felt right after my closing where I wondered “What did I just do?.” But along with the fear comes elation and pride. So researchers can review history and statistics all they want–the true value of buying a house is the enhanced quality of life. Successful remodelers understand that emotional value and use it to help clients create a place they love to call home.
Here is an excerpt from the grad school’s site about Scherbina’s research:
“In a recent radio interview, Scherbina discussed an index of home prices in Manhattan between 1920 and 1939 that she and Associate Professor Tom Nicholas of the Harvard Business School collected by hand from the Manhattan Public Library archives. This data set is informative because the housing market in Manhattan represented 5% to 10% of all the U.S. real estate wealth at that time.
According to Scherbina and Nicholas’ working paper, “Real Estate Prices during the Great Depression,” the prices for a typical Manhattan house increased 62% in a run up of the 1929 stock market crash and then lost 51% of that value by the end of 1933. By 1932 and 1937 the stock market showed signs of rebounding, but real estate did not, according to Scherbina.
A house purchased in 1920 would have lost 51% of its value (in inflation-adjusted terms) by the end of 1939. Scherbina and Nicholas report that it wasn’t until 1960 that housing prices recovered.The upshot for today, according to Scherbina, is that owning a house is not necessarily a lucrative long-term investment based on its long-term exchange value. She explains that given maintenance costs and fluctuations in the real estate market, it is difficult to profit financially.
Scherbina contends investors would do better investing in stocks and bonds because they can spread wealth across diverse investments and have the flexibility to sell some assets when necessary. Home owners, on the other hand, can’t sell some of their house when the economy shrinks, yet families do not value or think of their homes simply as a long-term investment.”
Should we focus on the emotion or cost vs. Value?
Nina Patel-
“So researchers can review history and statistics all they want–the true value of buying a house is the enhanced quality of life. Successful remodelers understand that emotional value and use it to help clients create a place they love to call home.”
My thoughts…
“Should we be talking about the investment value or the real reason people are remodeling today…..because they want to make there house a little more like home!”You decide……….
