Lost out to a cowboy again!
Local builder Josh is fuming. He’s just learned (through the grapevine) that he’s missed out on the King Street reno. The local cowboy has undercut him again! By nearly a third this time.
But there’s no way he could have made any money at a rate that low. At that price, would have only covered the materials and labour.
He’d had an inkling when scoping the job that Mike (the client) might be shopping around. The job looked relatively straight forward initially, but from experience, Josh knew there were a few extras that would be needed.
Josh didn’t have time to explain all this to the client that day; he needed to be at the next appointment. “Mike, don’t worry about the details mate. I’ll put it all in the quote and email it to you when I’ve got time”.
That job he thought was in the bag is gone.
These cowboys are starting to affect business. There was another job a while back where the same thing happened. That job had come back to him when it turned to custard.
Josh won’t forget that one for a while.
Homeowner Jess came to him in a panic: “We need to finish the extensions. The baby is due next month! There are a few things that don’t look quite right, but every time I ask about them, [rogue tradie] says ‘its fine that bit won’t matter when it’s finished’, and the project is going on and on… and then he asks for more money! I don’t think he knows what he’s doing… can you please come and take a look?”
What a mess. Josh and his team did massive hours that month, but they got the job done. It took as long to fix as it would have taken to do the whole thing right the first time. Todd and Jess were so grateful.
But Josh felt it put too much pressure on his guys. He didn’t see much of the family that month either. These cowboys, they do it on the cheap and stuff it up every time.
What went wrong?
When Josh first scoped Mike’s job, there were a few opportunities he missed that would have put him in a better position against the lower price:
- Asking the right questions early on to see if the job will be a good fit (so he didn’t waste time quoting a job he couldn’t make money off – or was never going to get). Josh still doesn’t really know if Mike wanted a cheap price no matter what, or if he took the cheap price because he didn’t know any better
Checking if Mike was the decision maker or if others were involved in deciding, like maybe his wife Didn’t take the time to listen to what aspects of the job were the most important to Mike (like perhaps time- frame, quality of work, dealing with the unexpected, staying on budget)
- Making sure Mike understood what was involved in doing the job right. Giving him some context around what could go wrong if the job doesn’t follow the proper steps
- Identifying the budget Mike had available for the job
- Making a detailed estimate/quote and making sure Mike understood each part (and knew what he was getting when dealing with a quality tradie like Josh). So if Mike compared the quote to another one, the difference would be obvious
- No follow-up to show he was serious about wanting the job and to address any concerns Mike might have about proceeding.
What went right?
Josh is a good builder and has a great team behind him. So although he didn’t get the job, he also knew that at two- thirds of the original price, it wasn’t worth having.
Josh knows his numbers and he has a good reputation. His business is in it for the long haul so he:
- Priced the job for profit (not based on gut feel, guesswork, or how he was feeling on the day) and knew that it wasn’t too high or too low
- Knew his margins and at exactly what point the job wasn’t worth doing
- Didn’t panic and slash his price and lose money on the job
- Has high standards of workmanship and was not going to take cowboy shortcuts
- Has a professional mindset. Josh knows he delivers top outcomes and quality work for his clients and that he deserves a fair reward for his efforts.
The client’s viewpoint
We all like a bargain. It’s human nature. So clients will always be tempted to go for the cheapest option if they don’t understand the reasons not to.
Here’s the thing though. Most clients you quote aren’t tradies or don’t know the details like you do. They simply don’t know why one price is more expensive than another. Unless you show them.
Remember, a certain low percentage of all buyers will decide purely on price no matter what. Let’s recognise that those jobs are often the ones that no one makes any money off and have the most problems.
Weed these ones out early. These are not the jobs you want.
You want to attract the much larger majority who appreciate good workmanship and want something that will last. Who want to sleep soundly at night, with peace of mind that the work is done right and there won’t be any nasty surprises.
To give prospective clients the reassurance they need when quoting – and play to your strengths as a quality tradie – use these:
5 KEYS FOR WINNING JOBS
- Turn up on time (i.e. a few minutes early)
- 84 percent of homeowners rank ‘punctuality’ as the most influential quality when they’re looking to hire a tradesman
- Tradies have a reputation for not being on time – use this to your advantage
- Block time out for pricing work rather than fitting it around everything else
- Quoting is an essential part of your business – so don’t label it “a hassle”.
- Build trust
People do business with people they know, like, and trust.
- Show genuine interest in the job
- Respect the clients home or workplace (eg taking boots off)
- Be well presented, in clean uniform • Have a professional looking van.
- Understand your client’s motives
Your goal here is to understand exactly what the client wants to achieve – and the ‘why’ behind it.
- Spend more time listening than talking
- Ask lots of relevant questions
- Make sure you understand what they really need
- Parrot back their answers to make sure you have it right (also helps them feel understood).
- Educate and explain
- Tell them what goes into a job and what it includes, so if they are comparing, its apples to apples
- Educate the client with expert advice on the different options
- Let them know how you operate and why
- Your job here is to help them work out the best solution for them – rather than trying to sell them.
- Show them you’re the best
- 78 percent of clients want to see a professional quote
- BRANZ found “quality and reputation” is the most important feature NZ homeowners look for when choosing a builder – by far
Personalise your quote emphasising the client’s needs and priorities
- Include trust builders like a professional blurb saying what sets your company apart, your quality guarantee (46 percent of clients look for this), awards, your trades association membership, qualifications, license etc
- Include testimonials from happy customers, with before and after photos of your previous work
- Get quotes completed quickly
- Go through the quote with the client, making sure they understand exactly what they are getting.
These things will position you so that price is not the main thing.
Now you’re competing on your strengths.
When the tradies I work with get these steps right, not only do they win more jobs, but they also find clients are more appreciative of their professional expertise and are happy to pay for it.
Doing it this way won’t get you every job, but it will get you a lot more work you want at the right price.
In the clients mind, you go from being just another tradie or salesperson looking for a job – to a trusted advisor – an expert whose time and expertise is respected – worth more than Joe Average.
Some of these ideas will be new, others you may have used before. But to get results it’s about consistency – good systems that ensure these strategies happen every time, even when you’re busy.
Want to next level your profit?
Find out the five simple steps to make your tradie business grow financially and get more cash in the bank. Get your free guide here: https://nextleveltradie.co.nz/guide