I took a sales call to do work on a home in a nearby residence. The guy I went to see owns the home in a beautiful neighborhood 15 miles away. He wants me to fix some drywall from a busted pipe that burst during the winter, install a new high-efficient toilet in the bathroom and add rubbed-bronze fixtures to the sink and tub. Photo: urlesque
I agree to work up an estimate on these items and decide to get back with him the following day — to go over details of cost. I head back to the home office, pour over the internet for supply costs and recommendations for the homeowner, estimate the time it will take to complete the project, multiply my hourly rate, procurement fee, error/omissions percentage, mark-up, ect., ecetera, ect.
I call the homeowner the next day and schedule a meeting at his house. I go through the details, ask for input, and a start date — should the customer sign and is in agreement with the quote.
He reads and looks over the estimate, then pauses, for like 15 seconds.
“Is there a problem?” I blurt out.
“Well, yeah. How much is the materials? I’d like a breakdown of each of these things are gonna cost!” he replies.
How do you handle that? Should you give him a revised estimate, or should you hold firm with explanation?
Would you ask for a cost breakdown of a meal at a fast food restaurant?
“Umm. How much for the pickles? I need to know the cost because it seems kinda off. What is the price breakdown of a slice of cheese, the meat cost, and the bun cost. Also can you tell me how much each french fry will set me back?”
“Now go back and work up another estimate for those items so I can see them listed, because I feel like you are overcharging and I don’t trust you.”
Sounds about right, huh? Wrong!
First off, when a customer asks for line item cost, it could indicate they are extremely cheap and will beat you up on those line items. Listing line items gives way to nit-picking — on every line. You have already invested time and expense to prepare a written quote and drive over there to submit it. Now they want another printed explanation.
I’m not saying that all people that ask for price breakdowns are not trusting you; they may have been conditioned this way with doing business in their everyday lives from listening to others. Lawyers and accountants.
What I’m saying is that if a customer wants a price breakdown of materials and labor, they must be charged for it. Calmly explain to them that there is a fair amount of time involved in preparing a quote (although they may not believe you — with the “free estimate thing” permeating our business, lol). However, it is the truth.
I don’t know one contractor that prepares written estimates and drives them all over God’s Green Earth, who doesn’t incur gas costs and time spent putting these quotes together.
Sale your services as a full package deal.
In order to avoid headaches, which take the form of the client knowing your profit on their job and asking you to lower it, as well as taking away your material mark-up (by way of line item breakdowns), simply sell your company’s worth as a full package. This is completely fair and legit. Your profit on a job is proprietary. You control the information: the secret recipe of Kernel Sanders chicken with it’s delicious herbs and spices didn’t get out from a customer’s squeeze play did it? Should yours?
Decide: should I give a breakdown?
You must decide if you are going to agree to separate things for them, so the customer can see the prices of each item. In standard contracts, I break down work procedures to be performed and materials to be installed. But these blocks of information are general in nature — standard contract writing procedures. Photo: kfc.com
However, if the client wants each and every line item broke down and the price indicated next to it, there is a cost associated with doing that for them. That cost is purely decided by you and what you think your time, effort and energy is worth.
“I charge $75 per hour, and it will take 3 hours, Mr. Homeowner. I’ll have that prepared for you in a day or so, no problem.”
If they are willing to agree (pretty sure they wouldn’t; as cheap clients usually request these things and will balk at the site of an added cost), then more power to your construction company..
Control the power
Dealing with certain customers, it becomes about control and power. You are the contractor and have it. Don’t let the client take it away by breaking your will to succeed and profit. Having a calm, steady demeanor when dealing with the general public — and not sway because of emotions — will take you father in your business pursuits of success than not.
“Grow some of these, too… They’re needed in construction!”
Remember: Don’t loose your cool when confronted with problematic clients. You can always just walk away. The next prospective client won’t be so bad. Photo: friendsoftheprogram.net