Combatting low-ballers

[plainpainter 217]

Just curious how some of you combat low-ballers in your industry. I have tried to diversify to combat low-balling. For example the last couple of months of my painting season - I lost 3 house painting quotes all in a row and my schedule was bare for a two month period. I had knick-knack work here and there, painting a door, pressure washing a couple of homes, resealing a really small deck. But nothing that would amount to me being able to pay the winter bills. So I took on a roof job - and made 6 grand for a week and half of work. Much higher profit margin than painting and was able to not have to compete with the low-ballers and it has gotten me through the winter so far. Perhaps lots of you here are really well established and even if you lost 90% of your bids - you'd still be chock full of work. I still go through feast/famine cycles.

[RyanH 14]

It's your integrity and the way you present yourself that combats the lowballers. It's not something you actively do to work against them, it's something you do that sets yourself apart from them. Effectively, you are in an entirely different class of competition. Ken Fenner has made some truly fantastic posts here on this concept, much more elegantly than I can reproduce from memory.

[Doug Dahlke 114]

I'm with Ryan. I have customers that hardly glance at my quote before they ask how soon I can do the work. Other people say they want to get more bids and sometimes I hear from them, sometimes I don't. There will always be people out there who look only at the price and they get what they pay for. If you present yourself as a knowledgable professional people are more willing to pay what you are worth.

One other thing I am doing to combat the low ballers is to get some commercial work. Once again some businesses could care less if you have insurance, etc. Some companies won't even let you quote without proof of general liability, WC, etc. The upfront cost of that keeps the beer money guys out of it.

[R L S 14]

Its real easy man, just low ball the low ballers and soon they will be out of business and it'll all be yours:sinister:

Other than that the above posts are great as well=)

[GymRat 14]

Image has a lot to do with it also. Potential customers see you out with a nice trailer with fancy equipment (even if you don't have a clue what you are doing), vs seeing someone with a home depot pressure washer in the back of a pickup truck, with no signage--get the picture, who appears to be the proffesional.

[Celeste 341]

In a word, prequalification. Lowballers in our area serve a nice purpose - they get the cheap customers who are price shopping rather than quality shopping. I don't want that type of customer anyway. We prequalify all of our potential customers over the phone before scheduling anything.

Celeste

[Don M. 14]

I'm with Celeste. 90% of my marketing is going to be towards prequalifing people this year.

[plainpainter 217]

Well this begs another question - how do you go about prequalifying? What are the techniques to distinguish cheap customers from good paying customers?

[Celeste 341]

I have no qualms about giving what our minimum rates are on the phone. That pretty much gets rid of the first level of price shoppers. If they want to proceed further and can provide details about the job, I'll roll that around in my head and see if it's a job we want to pursue. I'd much rather spend 10 minutes on the phone than make a trip with the associated expenses.

Celeste

[PressurePros 249]

Pre-qual is a great thing but it still may not have solved Dan's problem. I try to do as much as I can via my marketing and then again with phone follow up on leads but still, you don't win all the jobs. Dan, everything you do has to be geared towards gaining trust with your potential customers. The points above are very valid. Face to face contact, image via professionally designed literature, reputation, your appearance, your ability to answer customer concerns, overcoming price objections, closing the sale and your follow up all come together to determine your closing rate.

Educating your customers is time consuming. Most guys aren't willing to do it. Short sightedness in this arena will cost you in the quality of your referrals. Dan, on the other contractor board we both visit I see a ton of guys that have huge egos standing in the way of becoming successful. They may do awesome work but yet have no clue how to grow. They chase lead services, home shows, printed advertising etc. when if they focused on customer service they would double the amount of work they land. You have to continuously put the needs of your customers first. That means you are going to feel abused sometimes. Its all for the greater good for when you bend over backwards for that one customer, they become your most productive salesperson.

Dan, treat every sale like it is do or die. Once you have made the decision to pursue a job and assuming you priced it properly, its well worth spending extra time to close it. I would also say this in closing. If your painting is not getting sufficient margin to keep you afloat, abandon it. Keep the paint jobs going but use the money generated to market your other higher profit services.

I have a three year plan to phase out deck sealing. I don't want to do anything but property washing. The sealing is not profitable enough for me and developing a hands off system is not working.

[Jarrod 22]

Ken & Celeste, good points. Prequalification is huge. There's a few different ways to do this:

Form of advertising, demegaphics, & asking questions over the phone.

In the heat of deck season, I don't have the time to waste on lowball lovers. I would rather spend a few short minutes on the phone qualifying them than driving all the way to their home for nothing.

[James 625]

I would say 80% of my wood jobs are pre-qualiphied by the deck builders who just built the deck and refer me. Or by a deck I've done that somebody visited or the house I've done. My calls are by people who want the service. If they call three time's I know their serious. LOL...

[FCPWLLC 233]

Another way to combat lowballers is by reaching customers that the lowballer doesn't or can't reach. Of the internet based leads I recieve, a majority are no compete bids. They searched and found me either prominently or solely. Direct marketing can do this also. If your prospect has only recieved a post card form you and the lowballer hasn't happened to knock on thier door, you have eliminated a low-balling situation.

[plainpainter 217]

Lot of good advice in this forum. I would agree with you Ken, property washing has been the most lucrative for me thus far, along with roofing. Albeit much less difficult than sitting on 9/12 pitch roof and removing old shingles. Sometimes I feel abused for washing and sealing a deck for $1.50 sq. ft rate - only considering the actual deck part, not railings. But then again - it's all relative, I use to think plasterers made great money, dying art. And I trained to do that - and you have to fight tooth and nail to make $1.50/ft to hang board, tape, and veneer - materials supplied. And one day while my arm was about fall off - after the 3rd wet trowelling - enough was enough, total dog work. And I decided not to pursue it any longer. It's hard to sometimes decide to drop a service - but business is business. I refuse to work for less money than house cleaners - and I hear they are making $50 an hour sometimes.

[Jarrod 22]

I used to give this to every potential customer with every bid. I also had it in one of my advertisements. It was in a mag. that I advertised in. There were 4 $99.00 idiots in there with me. It got a lot of laughes from callers.

How to tell the difference between a professional contractor and a typical.doc

[seymore 90]

I would say 80% of my wood jobs are pre-qualiphied by the deck builders who just built the deck and refer me. Or by a deck I've done that somebody visited or the house I've done. My calls are by people who want the service. If they call three time's I know their serious. LOL...

Jim you took the words right out of my mouth refferals...refferals and more refferals who never haggle on price!

Most jobs are sold when I tell new customers that we've been in buisness for 16 yrs and specialize ONLY in wood restoration.We are able to justify our prices with our company's experience and reputation.That''s the main reason why we are a specialized comapny in wood restoration only!

Most people call me especially for the Gray Away stain i use and being we're the ONLY comapny in town where they can but it helps! :cool:

It used to bother me losing jobs to lowballers but in the long run those customers will call me again to fix the mess the Joe BLOW made.Then their bid is at a higher $$ to strip the crap that was applied.Most customers are getting smarter from the internet about what stains are worth using.They are getting a better understanding for what it takes to maintain their deck,fence,arbor etc.Now also most H.O have wasted their $$ on Behr crap from the Depot and realize how hard it is to apply.So they call a professional company like Wood Savers of Texas to do the right

When customers ask me why i'm higher than Joe BLOW...It's like comparing apples to oranges especially when I ask the kind of stain they will use IE:Behr, Sherwin Williams etc.When i show them my Texas Forest Service letter recommending Gray Away as a high quality stain it sells the job for me!

LOW BALLERS DO NOT BOTHER ME! :D

[Beth n Rod 1,279]

It's hard to sometimes decide to drop a service - but business is business. I refuse to work for less money than house cleaners - and I hear they are making $50 an hour sometimes.

We did the same with gutter cleaning. It was overly time consuming and not profitable. The majority of roofs had a pitch that made walking them unsafe. Especially when they were covered with morning dew or ice/snow.

I tell ya, climbing 3 - 3 1/2 stories to clean a gutter with a roof you cannot walk for $25 - $65 isn't worth it, and every job had 2-6 gutters and the terrain was mostly sloped. Try carrying a set of 36' or 40' ladders around townhouse complexes with slippery hills and fences and decks as obstacles to get around, climb, pull up the ladder you used to get on the deck to use it to get to the roof. We tried doing everything from the ladder to even using a pw'er with an open wand to shoot the debris out but it never compensated for the costs and labor...so we stopped the service.

Instead, we concentrate on other avenues that work much better for us and this way we get to leave the flying trapeze/high wire act jobs to the desperate. There's no good money in it with the pricing other companies charge. It's low-balled to death.

Rod!~

[Jon 533]

James, Seymore and others who get work by referral do you offer a referral fee or in some other way do anything for all the referrals they send your way.

Example clean and reseal their deck free or take them out for a nice lunch or send gift certificates for meals at nice restaurants etc.?

Or do simply say thanks for the referral.

Jon