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#156991 - 08/02/05 01:20 PM Free Estimates
Dnkldorf Offline
Member

Registered: 12/12/04
Posts: 1091
Loc: nowhere usa
I wanted to start another thread, by itself here that would continue onlong the lines of the service call thread.

I have read some good "pro's" towards charging trip fees/charging for estimates, but am still not convinced that is the way to go.

I need something that will prove to me, this is the way to go.

I asked 8 people today, mostly "blue collar" people if they would pay someone for an estimate and they all said no way.

So this is what I pose. I am going to ask people, my own kinda marketting tool, about wether they would, or would not use a contractor based on these fees. However, this is where I am stuck. Any question can be asked, and the answer can be manipulated by knowing how to ask the question. So rather than me asking the question my way, which would I guess be biased in some way, I ask you guys for help.

How would you word it? Or how can I non-biasedly(if that is a word), ask this question to both "blue and white" collar folks.

Here was my way:

Would you call a contractor, to give you an estimate for work you needed done, if you knew in advance, that the contractor was going to charge you for the estimate?

Like I said, so far 8 for 8, were no's.

Any takers?

Dnk...

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Business, Office, Estimating, Legal:
#156992 - 08/02/05 02:04 PM Re: Free Estimates
LearJet9 Offline
Member

Registered: 04/24/05
Posts: 196
Loc: Millis, MA USA
Well DNK, I'll throw in my thoughts. If we were doing residential work I'm sure we would have to offer 'free quotes' or we wouldn't get any work. It's expected in that market and most, if not every EC offers it. In the retial/commercial market we have found over the past 10 years that they "shop around" just like a homeowner. We have established a good customer base that we rely on. Customers that use us because we are a proven entity. They seldom ask for quotes and when they do we can offer a 'ballpark' without ever having to make a site visit because we know the location. They accept the ballpark and 99% of the time just give us a green light. Then we have the shoppers, and we know who they are. We also know they are "shopping" and our response to "we would like you to quote a job for us" is always, thank you but NO thank you. We get those jobs 50% of the time w/o a quote.
Bill

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#156993 - 08/02/05 02:50 PM Re: Free Estimates
Dnkldorf Offline
Member

Registered: 12/12/04
Posts: 1091
Loc: nowhere usa
Yup, I'm in the same boat.

Most of my customers are repeaters, that never ask for a estimate. They know me, trust me, and know it will get done. They do ask me to "ballpark" as you say, but that is just to get a PO cut. Never been held to one yet.


The newer ones who get referred, do the same, ask for the ballpark number. I do that for free if they are reffered by someone.I get most if not all of those.

I ask the above question, due to the probability of growth, acctracting new customers.

Dnk.......

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#156994 - 08/03/05 03:58 AM Re: Free Estimates
LearJet9 Offline
Member

Registered: 04/24/05
Posts: 196
Loc: Millis, MA USA
DNK - While our SOP is no free quotes, that doesn't mean if we see a certain opportunity we can't offer a free quote. We are a very flexible and progressive company. While we do not advertise or generally offer free quotes, doesn't mean we never do it. We do occasionally.

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#156995 - 08/03/05 09:59 AM Re: Free Estimates
Zaney Offline
Member

Registered: 08/01/05
Posts: 11
Loc: eastern pa & new jersey -usa
Dnk,
In the service & repair type EC business trip charges are not a problem. Our closing rate is 90% on the phone and 85% in the field.

Remember.....when they asked people "Would you pay for bottled water" I'm sure the first 8 people they surveyed said Never!

Zaney

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#156996 - 08/03/05 03:08 PM Re: Free Estimates
Dnkldorf Offline
Member

Registered: 12/12/04
Posts: 1091
Loc: nowhere usa
I agree Zaney, and after 15 yrs if the trend is charging for estimates, I may lean that way.

However, using one of your posts, you stated when you did "free estimates" your conversion rate was 60% of them, when you went to charging you got 86% of those.

So by this count, you now have 4 new customers if you provided free estimates.

If you charge, you have none.

If I was reading your post correctly.


But this is just in the prelimanary stages, I'll let you know how I make out.


Dnk.....

(Editted for being a bonehead again)

[This message has been edited by Dnkldorf (edited 08-03-2005).]

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#156997 - 08/04/05 02:57 AM Re: Free Estimates
wilkie Offline
Member

Registered: 04/29/05
Posts: 39
Loc: South Carolina
How much does it cost to run a free estimate call and not get the work? How much does that lost time cost your business? Are the customers getting your free estimate also getting two or three other free estimates? Does this drive the overall profitability of their requests down? Who ends up paying for the lost time? Does the lower closing rate percentage coupled with the usual lower returns on those free estimate calls help or hurt your business? What about our trade in general? Does it really matter what the other ECs in your area do?
The real underlying questions are- where do you want to take your business and how will you get there? Charging for an estimate or not, are simply byproducts of your fundamental planning and vision you hold for your business.

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#156998 - 08/04/05 07:23 AM Re: Free Estimates
Tiger Offline
Member

Registered: 05/04/05
Posts: 714
Loc: Crystal Lake, IL USA
I've thought about free estimates for months now. It is a substatial expense in time. What I've thought about the most lately are good clients who I got over the years by giving a free estimate.

There are many factors involved. Half of the display ads in the phone book here mention free estimates. While we don't want to reduce our business to the lowest denominator, we are in competition.

There are a few ways to handle free estimates.

1). Give the time away.
2). Consider it an overhead expense and include it in your rate.
3). Charge it in advance to those that want it as a prequalifying measure to weed out clients that want low price more than quality service.

From a personal perspective I want low price AND quality service. I usually have to call 10 contractors to get 2 or 3 to call back. Of those 2 or 3 I may find that none of them are insured (a real recent experience).

My conclusion so far is to do free estimates when I have time. If I'm sitting around praying for the phone to ring I'll do free estimates for anyone. If I'm installing 40-50 hours per week and doing 10-20 hours of office work when I can, I'll try to weed out the people that are only interested in low price.

Dave

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#156999 - 08/04/05 03:50 PM Re: Free Estimates
Tom H Offline
Member

Registered: 01/31/05
Posts: 74
Loc: Milford, Ct, USA
What I commonly do for new customers is give them a written, non-itemized proposal with no time and material break outs. That I bring with me in a seperate sheet set. Then if they ask for a break out, I explain to them that if I give them a break out, it will cost them for the time it took to put it together. When they ask why, I explain that by giving you a itemized break out, I have in essence given you a tool by which you can either do the job yourself, or hand the list to some one else and say, do this cheaper and it is your job. And if the customer accepts this, pays and then hires me, I deduct this cost from the overall contract price.

So far, I have lost two jobs that way and later found out that the customer was a cheap bstrd and wouldn't pay in the end anyways.

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#157000 - 08/05/05 05:05 PM Re: Free Estimates
ShockMe77 Offline
Member

Registered: 06/11/05
Posts: 823
Loc: Rahway, New Jersey
2). Consider it an overhead expense and include it in your rate.

That's the best idea I've heard yet. It makes total sense to me, but I do not own my own business yet. I think when I do though, I'll ber doing free estimates.

Great discussion here folks.

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