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Old 02-26-2019, 11:33 PM   #1
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Default Customer said my bid is higher

I recently tried Thumbtack for the first time of course I didn't get the job because I was the first to respond so I assume the customer showed the other supposed contractors my bid and ask them to Beat it. (I dont think you need to be licensed to be on thumbtack)Of course that's his right in the free market. He didn't ask me to beat their price but he did ask me what my price was if he bought the materials and told me what the other guys quoted for him to buy the materials basically asked me to Beat It.so my question is what is your response to that kind of thing? And do you think he actually told me there price or just told me there number was lower? Look forward to your response.thx
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Old 02-26-2019, 11:37 PM   #2
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Get out of that end of the market. It's a no-win proposition for you.

Unlike a GC, a home owner// property owner is not even ethically bound to not shop your bid.

So, they almost always do.

Meaning that your bid -- if correct -- will be undercut by Handy man.
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Old 02-26-2019, 11:45 PM   #3
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For your gaming amusement: Try the Lo-Hi Bid.

You bid too low -- not so low as to be obviously absurd -- but low none the less.

The other guy wins the customer and loses his shirt. Heh.

The other guy runs away. You're called back. You simply cancel and revise your bid. For, you've discovered that you left something out. This is all done over the phone. You never come out until the customer has given you his credit card number and an advance -- liquidating damages should he re-neg on the (new) deal.

If he doesn't like your new price -- that's okay. Now the handy man will come back and jack up HIS price... if he's even willing to show up.

Typically you'll end up with the handy man jumping through hoops -- often for no pay.

After he's had enough exercise, let him take the customer away from you.

They deserve each other.

BTW, ANY prospect that wants to contribute the materials kills your bid. Get off the phone -- right quick. Materials provision is a 'tell' -- there be no profits on this job.
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Old 02-26-2019, 11:56 PM   #4
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I deal with a few lead services. My experience is there are two type of customers: those that will hire the first guy that calls; and those that want ten bids and want to buy all the materials.

Respond immediately to every lead. Don't even read it. Just call. You will be first. If the guy hires you, good. If he doesn't, good--you probably didn't want that one anyway.

Quote:
Originally Posted by telsa View Post
Materials provision is a 'tell' -- there be no profits on this job.
This is absolutely true. People who want to buy the materials will be a PITA in so many ways. Avoid them.
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Old 02-27-2019, 06:14 AM   #5
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I've just gotten to be brutally honest with them. Something like "Many customers think that buying the material will save them money, but the reality is that they never get the right materials and the time spent trying to straighten it all out ends up costing them more than if I had just picked them up myself. But that's a lesson hard-learned. If you want to proceed, I'll be glad to give you a list."
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Old 02-27-2019, 06:23 AM   #6
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Originally Posted by TX mhelectric View Post
I recently tried Thumbtack for the first time of course I didn't get the job because I was the first to respond so I assume the customer showed the other supposed contractors my bid and ask them to Beat it. (I dont think you need to be licensed to be on thumbtack)Of course that's his right in the free market. He didn't ask me to beat their price but he did ask me what my price was if he bought the materials and told me what the other guys quoted for him to buy the materials basically asked me to Beat It.so my question is what is your response to that kind of thing? And do you think he actually told me there price or just told me there number was lower? Look forward to your response.thx
My response is this. As long as you obtain leads from a source that attracts the "only the lowest price wins" customer, you will never, ever, make any money.

And, you will join the ranks of the bottom feeding slugs who for decades have dragged our industry to the mostly low profit opportunity it is. Except for those of us that have figured it out.

I forbid you to do that! I challenge you to learn how to build a profitable business by developing relationships with only those customers that are willing to pay the price for the added value you bring them. You'll need to figure out what that added value is and you'll also need to learn "the numbers" to effectively do that.

When you figure that out, then you need to figure out how to attract that better paying customer. Then it becomes easy to give the "low price only wins" customers to your competitors.

Hint: To get this process started, you'll first need to change a paradigm. That paradigm is your limiting belief that people only buy from the basis of lowest price when seeking our services. Almost all of us, including me, have had to change this paradigm. Until you do, hardly anything will improve in your business.
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Old 02-27-2019, 06:24 AM   #7
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Originally Posted by TX mhelectric View Post
I recently tried Thumbtack for the first time of course I didn't get the job because I was the first to respond so I assume the customer showed the other supposed contractors my bid and ask them to Beat it. (I dont think you need to be licensed to be on thumbtack)Of course that's his right in the free market. He didn't ask me to beat their price but he did ask me what my price was if he bought the materials and told me what the other guys quoted for him to buy the materials basically asked me to Beat It.so my question is what is your response to that kind of thing? And do you think he actually told me there price or just told me there number was lower? Look forward to your response.thx
I don't compete with other contractors. If I know that there is another contractor, if they make any hint of it whatsoever, I just move on to the next customer.
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Old 02-27-2019, 06:28 AM   #8
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I've just gotten to be brutally honest with them. Something like "Many customers think that buying the material will save them money, but the reality is that they never get the right materials and the time spent trying to straighten it all out ends up costing them more than if I had just picked them up myself. But that's a lesson hard-learned. If you want to proceed, I'll be glad to give you a list."
This is very true.

In addition to that, you can tell them how you get better material at a much lower cost via contractor discounts, so even after you mark it up to cover your costs of getting the material and warrantying it, it will still be the same price or cheaper than what they can buy it for.

Then you can tell them how you can't warranty material that they bought, so if a GFCI stops working within a couple months you have to charge them for the service call to come replace it instead of replacing it for free under warranty.

Those are things that I used to do. Now I just walk away, forgetting about that person completely, as if they never existed.
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Old 02-27-2019, 07:28 AM   #9
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My response is this. As long as you obtain leads from a source that attracts the "only the lowest price wins" customer, you will never, ever, make any money.
That's the thing. See if this lead source overall is worth the bother. I wouldn't assume it is from this one lead.

When you sign up for a service like this, you have to be nice - if you get a bad review, it is going to poison the well, even if it might have generated some decent leads.

In my opinion, when you sign up for a service like this, you have to commit to it to an extent. You have to do what it takes to make sure you start with some good reviews. If you draw a couple bad customers first, you might even have to lose some money. How many people do you think bother to call the guy with 2 reviews, both one star?

(You should probably think about this before you sign up, but if you didn't, well, lesson learned, next time you will. You know what they say about hindsight.)

As for dealing with the person that wants to buy their own materials - it's not the end of the world. You could explain that

* no warranty on materials; any callback on defective materials is fully billable.
* any time lost due to wrong materials or short supply is billable

The real question is, how much do you deduct for materials? If you just deduct YOUR cost it's still a headache but no big deal. I suspect that you itemized materials and labor in your quote with a good deal of the profit in materials markup.

FFS if your pricing is based on materials markup, don't itemize labor and materials on your quotes.
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Old 02-27-2019, 08:34 AM   #10
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I've just gotten to be brutally honest with them. Something like "Many customers think that buying the material will save them money, but the reality is that they never get the right materials and the time spent trying to straighten it all out ends up costing them more than if I had just picked them up myself. But that's a lesson hard-learned. If you want to proceed, I'll be glad to give you a list."
If a client wants to buy their own materials I tell them "that's fine, I don't make any profit on the materials. My charge for materials covers the cost of researching the best materials, preparing a list of what is needed, and delivering it the job. Just have everything here before I start the job. If you require my time to consult on a shopping list, there will be a consulting fee. If I have to leave the job to go get the proper materials, I will charge extra for that time."

The job will end up being a nightmare in 95% of the cases.
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Old 02-27-2019, 11:55 AM   #11
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"Your price was higher than the others."

"Sounds like your problem not mine."

All kidding aside, people think they are always getting apple to apple comparisons, and that we are a commodity that is a dime a dozen. All contractors are equal in most peoples eyes, because they are uneducated about our trade and the differences between good and bad. They have a complete lack of understanding upon what craftsmanship is and what craftsmanship costs.

You will always get these types of people coming to you, no matter what lead source you use, no matter how you have set your business up, no matter what filters you set in place. It is going to happen.

If you're going to be higher than the cheap people, then you need to be different. You have to learn how to set yourself and your company apart, how to create value in their eyes, not your eyes.

Putting on stupid booties, wearing a white pressed shirt, having each tech. with an iPad.... Big deal, most of the competition is doing that these days (or some version).

What value are you brining to them to show you are worth more than what the other guys are charging?
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Old 02-27-2019, 12:03 PM   #12
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As for the lead sources, they require learning how to use them and the customers that frequent them.

I struggled with, and still do to an extent, with Thumbtack. Between September to November last year I made $60k worth of jobs off of them though, and spent $1k in advertising. (One customer was worth $45k for a rewire, then lots of smaller $1k to $4k jobs).

Since then I haven't used it much because I have been getting too many leads from other sources.

Lead generation companies take time to learn how to use, what to say to people, how to deliver pricing, and how to create appointments. Like @splatz said, it takes commitment. Advertising in general takes a committed effort to learn to use effectively and to allow it to play out and work.

For every person saying this lead site is "Junk" there is someone killing it. Figure out what they are doing differently.
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Old 02-27-2019, 12:04 PM   #13
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Quote:
Originally Posted by Switched View Post
"Your price was higher than the others."

"Sounds like your problem not mine."

All kidding aside, people think they are always getting apple to apple comparisons, and that we are a commodity that is a dime a dozen. All contractors are equal in most peoples eyes, because they are uneducated about our trade and the differences between good and bad. They have a complete lack of understanding upon what craftsmanship is and what craftsmanship costs.

You will always get these types of people coming to you, no matter what lead source you use, no matter how you have set your business up, no matter what filters you set in place. It is going to happen.

If you're going to be higher than the cheap people, then you need to be different. You have to learn how to set yourself and your company apart, how to create value in their eyes, not your eyes.

Putting on stupid booties, wearing a white pressed shirt, having each tech. with an iPad.... Big deal, most of the competition is doing that these days (or some version).

What value are you brining to them to show you are worth more than what the other guys are charging?
A couple of things I have learned:

Pre-qualify over the phone. If youíre going to make a site visit, make sure the odds are in your favor first.

Donít tell the customer how you are going to do the job. He will either take it as advice and do it himself or hire a hack artist to do it your way. I just tell the customer I use magic.
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Old 02-27-2019, 04:41 PM   #14
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I have had customers buy material . If they must we do it this way . I go to supply house . I get the material I WANT to use . Call customer to pay for it . Rare do we do this but it has worked out ok . You as the customer pay me to shop and pay me to transport material . You will also pay me to screw around for a bit so all in all we made are money off you and you don't know it .

We bid a 60,000 foot grocery store . Customer gave bid to guy that knows electric . 6 months later for T&M we fixed what electric guy screwed up . We worked really slow , like super slow , like extra ordinarily slow .

As my boss tells the new customers we didn't call you and we don't need you're work . This is the price pay it and we will get it done .
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Old 02-27-2019, 06:33 PM   #15
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"Your price was higher than the others."

"Sounds like your problem not mine."
This is 110% accurate- I have seen more contractors drop their prices during the estimating process for a job than I ever care too.

I don't know how that head-trash got into their heads- let alone mine years ago, but it's the customers job to find the damn money for THEIR project- if they want to hire your level of expertise and value.

The OP has to look at that comment as a filter for price shopping customers in order to find VALUE purchasing clients. CHANGE YOUR MINDSET! These are the obvious symptoms of a troublesome customer. Look and apply your talents to clientele that want the experience of being catered to without having to ask and are willing to pay for that service.

How would I reply to it?

You're absolutely right Mr Customer! How would you like to move forward? (At this point I shut up- no talking at all) and watch them either say one of two things:
1. I think I will be going with the other cheap talentless hack.
OR
(And this is the most fascinating part to watch)
2. The actually talk themselves into going with you- this is AFTER you have explained the value that you are providing them.

Another note, we do not accept others providing the materials- they never get the right stuff- EVER!
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Old 02-27-2019, 06:58 PM   #16
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I agree with most of you I'm probably going to start telling ppl I dont allow them to buy materials other than light fixtures. As far as the lead service (thumbtack) I've never liked them and didn't really want to use but things have been slow lately so thought I would give it a try probably wont happen again. It's not as if I was expecting to make alot of money off them. wanted to start there and hope it would lead to more word of mouth.you never know who they know but lesson learned.
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Old 03-01-2019, 06:01 AM   #17
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We started a 30k shop wiring project for a customer of ours. The agreement was that I dont tell them how much its going to cost him until the job is complete.

Just finished another 6k plus switch change.
Customer: How much is this going to cost?
Me: I have no idea.
Customer: OK

Its a little risky but, I keep the price off the table and focus on producing.

I learned this with a national chain tire/repair shop I take my truck to.
I see people getting written estimates, looking for discounts and coupons.
I go in, leave the keys and Uber home. They call, the truck is ready and I pay.
They love that and they are happy that they dont have to hustle up some unnecessary work to make their money.
I respect their business and the fact they need to make money. I get in and out quick and they are there when I need them.
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Old 03-01-2019, 06:37 AM   #18
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A couple of things I have learned:

Pre-qualify over the phone. If youíre going to make a site visit, make sure the odds are in your favor first.

Donít tell the customer how you are going to do the job. He will either take it as advice and do it himself or hire a hack artist to do it your way. I just tell the customer I use magic.
A couple things I have learned.

Residential service sucks, and residential customers suck..
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Old 03-01-2019, 06:51 AM   #19
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This is 110% accurate- I have seen more contractors drop their prices during the estimating process for a job than I ever care too.
Just this week I was present while an HVAC trunk slammer gave a customer a quote. The guy went from $3600 to $1800 just because the customer paused quietly while considering the estimate.
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Old 03-01-2019, 07:22 AM   #20
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Just this week I was present while an HVAC trunk slammer gave a customer a quote. The guy went from $3600 to $1800 just because the customer paused quietly while considering the estimate.
I'm cringing thinking about that.

It's just a complete lack of confidence.
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