Getting Plenty of Leads but not Closing Enough Jobs?
Increase Sales by Closing More Bids

For contractors the easiest, and least expensive, way to increase sales is to close more of the leads that are coming your way. Say you are currently closing one out of every six bids you put in. If you were able to increase that to just two out of every eight leads that come your way, that’s a near 40% increase! All without having to spend additional time and money paying for leads or advertising to generate those leads.

Easier said then done, of course. You’re probably thinking, well I’m currently doing everything I can to close the leads I get so what else should I be doing? First take a look at some of the basic fundamentals behind the sales process and how well you are doing them…

Appearance:
This may seem petty but it can play a major factor in a homeowner’s decision making process. I’m not telling you to put on a suit and tie, in fact I’m telling you NOT to do that, but a clean and well kept appearance goes a long way towards making a good first impression. Shirts with your company’s name and logo, or signage on your vehicle are the types of things that lend credibility to your business in the eyes of the homeowner. 

Punctuality:
Show up on time whenever possible. If you’re coming from another job, or are going to be late, make a quick phone call. Provide all estimates in a timely manner and by the date specified. If you tell someone you will provide them with an estimate on Wednesday and you don’t get back to them until Friday, you are indirectly telling them that their business is not all that important to you.

Take an Interest:
Right from your first meeting show that you are putting thought into the project. Taking a serious interest in the job before you even land it may be the difference between whether you get the job or not.

For example, a friend of mine was looking to have a new roof put on his house. He had three guys come out to give him an estimate. The first guy glanced up at the roof for about half a minute then gave him his estimate. The second guy got out his tape measure, measured the house, then provided him with an estimate. The third guy got out his ladder, got up on the roof, took a look around, did some measurements, then provided him with an estimate. The third guy got the job even though his price was slightly more than the other two.

Present Estimates in Person:
You will not be able to provide an accurate estimate for all jobs during your first visit to the site. If it will take you several days to prepare, it’s a good idea to present the estimate in person. This not only shows you’re interested in the job but also provides you with an excellent opportunity to close the sale.

Ask for the Sale:
Asking for a sale is something even the most seasoned professionals have a hard time doing. You want to be firm but don’t want to be overly aggressive. One of the best ways to approach this, without coming off as pushy or desperate, is to use a forced choice question. This is a question that forces the homeowner to make a decision regarding your services. For example: “How are you handling the permits for your addition? If you like that’s something that I can take care of for you free of charge.” Or “I will be finishing up my current job by the end of the week. If it’s alright with you I’d like to get started on Saturday.”

Differentiate Yourself:
Competition in the residential building market is fierce. It’s no longer sufficient to simply provide a service because there are a dozen other companies who provide the same service. You must make your business stand out so that people couldn’t possibly imagine NOT using your services.

*** The differentiating factor between your business and your competition should never be price alone. Trying to compete for a job by simply lowering your bid can only hurt you in the long run. ***

Right now you may be thinking: “I do all of these things well but I’m having trouble differentiating myself. Beyond providing exceptional service, how else can I make myself stand out?”

The best way to break away from the pack is by offering a guarantee that the job will be completed as specified. Contractors can, and in some cases are required to, take out a surety bond. A surety bond is issued by a third party, like a bank, guaranteeing that the contractor will fulfill all obligations to the homeowner. If the obligations are not met, the homeowner will recover his losses via the bond. Having a third party involved provides reassurance to an uneasy homeowner who may have had a bad experience with a contractor in the past. Conversely, the contractor can also take out a bond against the homeowner to ensure payment.

Until recently the surety bond was one of the only ways to provide a guarantee on your service and there were some drawbacks to using one. Surety bonds can be as high as 5% of the total job and usually require collateral from the contractor, increasing liability. Most builders usually compensate for the 5% by adding it to their final estimate, but the spike in price may be the reason you can’t close the job. Then if there is a dispute between parties the issue is settled through a costly, and often lengthy, legal battle.

An alternative way to guarantee your work is by using The Builders Trust Guarantee. The Builders Trust Guarantee is a warranty that protects both contractor and homeowner. Unlike surety bonds, Builders Trust can provide coverage for only 1% of the total job cost. Most seasoned contractors budget 1 to 3% for delinquent payments anyway. Now by using Builders Trust you can budget 1% knowing that you will not incur any additional loss. Builders Trust also uses arbitration to resolve disputes, handling most claims in just 7 to 45 days.  (http://www.builderstrust.org/contractors)

By putting a little more thought and effort into your job bids, and by adhering to the basic sales practices outlined in this article, you can increase your closing rate with minimal effort. By making sure everyone in your company follows these same practices, and going to the next level by differentiating yourself from the competition, you are sure to see a rise in sales. You can’t keep going through the same routine and expect to get different results, take the next step.

Article by,
 

Nick Denroche
VP of Marketing
Contractor Power
nick@contractorpower.com
609-693-9778

Builders Trust
Construction Peace of Mind
http://www.builderstrust.org/