Oftentimes, remodeling prospects ask to have their proposal broken out in detail and or price. If this is something your business is willing to do, here are a few critical considerations to explore with them before you leave to prep your proposal.
What is their motivation?
Ask them why they are asking for the breakout and how they plan to use the information. By asking, you are likely to learn whether their reason(s) for asking makes sense for your business and your sales process. For example, what if they are considering doing part of the project themselves or involving a handy relative; is that something you will allow?
Keep in mind, too, that it’s possible they might not even have a good reason. Maybe someone else told them to do it that way. So be careful not to make them feel stupid for asking.
How and when will they make their decision?
Make sure there is a recognizable logic between what they are asking you to do and how they say they will decide. If they want the breakdown so they can compare your bid to another’s, but they haven’t shared a budget they are willing to commit to, you and the other contractors might be wasting your time and energy.
Just as important, get a clear answer on when they will make their decision. If they won’t decide for several months you will want to let them know how long your price will be good for, and you may need to adjust material and labor costs based on when you are actually producing the project.
Another possibility may be that the prospects have no idea how or when they plan to make their decision. By asking the question, you can find out if they are really serious about the job. And perhaps by being a “decision engineer,” you can help them discover how to make a confident decision. That will help your business stand out from other contractors they are interacting with.
Remember: If you don’t know how they will make a decision you can’t expect or help them to make one!
What format should the information be in?
Should the information and pricing be broken out by room, by work category, by project milestones, or by some combination of these considerations? You must be able to give them the info they need, in the way they need it to make a decision, so they can actually make a decision.
Whose process will you use, theirs or yours?
You need to decide: Are you willing to participate in your prospect’s process for specifying the project and how your proposal will be broken out, or will you hew to your own process for doing so? Such a decision has a long-term affect on your business. You personally may be able to use a custom approach with every prospect, but if you plan to have others do sales at your business, consider whether they too will be able adjust on the fly for every prospect and still successfully sell at your required margins.
As an alternative, if you want to keep your selling, estimating and proposal generation process simple and consistent, it could be better for your business to define and dictate the process you and your business will use. Keep in mind that deciding to do so will also require you use a strategic marketing process and supportive tactics that share your process and attracts prospects who want to embrace it. I call this your target customer type.—Shawn McCadden founded, operated, and sold a successful design/build company. A co-founder of the Residential Design/Build Institute, he speaks at industry events and consults with remodelers. [email protected]
What do you think? Add your thoughts in the comments below.