Customers who want your business
Hello and welcome to part four.
A Recap of our last lesson
There are plenty of ways you can get work, so find what works best for you and be strategic when using tradesmen platforms and/or directories, working as a subcontractor (be someone’s contact), social media and paid advertising. Eventually, with your good reputation, you will build up to gaining your customers through word of mouth.
Look at the small jobs, leave no stone unturned as these smaller jobs can often be the quickest and cheapest way to building up your customer base leading to much bigger jobs.
Having an attractive personality
Customers who can count on you
How much is a job worth
Risk and value perception
Adding detailed information to your quotes
Using Subcontractors and labourers
Using extra help
How to avoid underpricing
Using trade accounts
We use around 200 muscles to take a single step forward and yet we don’t even need to think about what those muscles are doing at any one time. We simply do this through experience.
Once you have learnt the mechanics of running a business and do it well, you simply will carry on doing this through experience and if you fall you will also learn how to get up again.
Just like those muscles in our legs, many people seriously underestimate the power of customer service and what it can do for your business. Once you have mastered this, running your business will be a walk in the park.
Customer service begins from the moment the customer knows who you are and does not end. We will be looking much closer at customer service in these last three sessions
Talking to and getting to know your customers is part of being friendly. This allows them to get to know you and what else you can do for them. Giving tips and advice to your customers while both on the survey and the job also adds value to you, making you more valuable to them. All this adds value to your business and is amongst the key ingredients to maximising your profit.
Remember having an attractive personality involves many things. Being humble, honest, sensibly dressed, making conversation and no swearing are just some of them.
Having an attractive personality most definitely involves being reliable and flexible, a tradesman your customer can count on.
For some, this is much easier said than done. Being reliable means the customer can reach you anytime within reasonable hours, you will return their call ASAP, your yes means yes and you are punctual.
Visiting customers within 3 or 4 days from the first contact, returning the quote within 48 hours and chasing it up within one week all contribute to winning the job.
Taking your time returning a customers quotation will only put the customer off as this will raise questions about your reliability.
I hear this from my customers a lot and because I am so quick in returning their quotation this is one reason that I get the job.
My survey template covers most work in the home and garden.
Using these will help you developed your prices and pricing strategies.
In the past, I have fitted kitchens and bathrooms for Wickes, fitted bathrooms for bathstore and discovered other tradesmen quotes and prices. From this, I can tell you that I am competitive up against commercial retailers and still cheaper than some tradesmen while offering a complete service with value for money.
Additionally, one crucial lesson I learnt from the above is that information is worth money and therefore, another key ingredient to maximising your profit. I will explain this in detail below, in the risk and value perception section.
Per day, per hour, per item
The easiest and quickest way to understand pricing is by firstly deciding on how much you think you can charge per day or from the whole job and then break it down into work items consisting of per item, per square meter and linear meter. This is known as price work and doing it this way allows you to earn more money while giving the customer transparency and flexibility. This also looks highly professional.
What you earn in a day depends on factors like your skillset, what level of service you are offering (eg supply of materials and waste removal) and the area you serve eg city of London, an area with low house prices and rural.
Hanging standard doors can cost from £30 to £50 per door depending on where you are, what work is involved and how much confidence you have. It will also be adjusted based on how many doors you can hang in a day or how much time you will spend on it as part of a bigger job. This is why it is impossible to tell you directly how much YOU should charge.
Furthermore, if you only come out of your way to fit one single door, the charge must be higher than it would be fitting 10 doors. Why? Because, as customers will understand, you will not be able to do anything else on that day. Also, the prep and finish (setting your tools, putting everything away) have to be included in the price, it’s your time to them.
Remember you can make an additional profit when supplying the door, door furniture and painting if required while doing the customer a favour. This is all part of the value ladder we talked about earlier in the course.
An average painter and decorator usually earn between £100 and £150 per day. What you need to remember is whether you are hanging doors or painting and decorating, you can make around £300 per day when these jobs are part of a kitchen or bathroom refurbishment project.
Taking this into consideration, you can set your prices per item, combine your skills and offer the full service. eg you need to paint a room so why not offer to remove, repaint and refit the radiators.
When work is itemised on the quote, the customer can simply deduct this part of the work if it falls outside their budget.
This is also why having a detailed quote is so important. I used to think that customers wouldn’t like my prices but in fact, they appreciate the transparency.
Adding a discount and some items free of charge looks professional and flexible.
Always charge more for building materials then your actual cost. This will help prevent you from accidentally going over this budget.
risk and value perception
Ok so let me explain something that is a real game-changer when pricing customers and winning quotes. The bigger the job, the higher the price. The higher the price, the more risk is involved in the customer’s point of view. Think that, they might be parting with their lifetime savings. Your job is to bring that risk down by using trust and confidence. Here is how: The more detailed information you give per line of work, the less risk is perceived. The less risk is perceived, the more value you add to your quote. With this course, you will also have access to a detailed work description matrix.
Using subcontractors and labourers
In the past, I have sometimes used labourers to help push the job along but I mainly used subcontractors such as plasterers, electricians, gasfitters, plumbers, carpet fitters, bricklayers, and carpenters for joining kitchen worktops.
Doing this allowed me to take care of the whole project which not only takes any stress away from the customer, it truly maximises your profit as you are offering a high-value all in one service.
Most of the work I do is fitting kitchens and bathrooms which means I usually only need to mainly use an electrician, plasterer and sometimes a gas fitter.
Whether its time, lack of skills or hidden costs, what might seem easy can turn into a nightmare
Most tradesmen have underpriced a job or two. Underestimating a project can be painful.
Sometimes you may have underpriced the work to ensure you get the job if there is not much work about (eg the holiday period) or due to a little mistake here or there which is not so bad but sometimes underestimating work can really knock your confidence which is why using a quotation document on a survey is so important along with allowing your self enough time (around an hour) to take down all relevant information.
Before I was using this method, I seriously underestimated a job in a big house which involved lots of wallpaper stripping, papering, plastering, painting, brickwork, sanding floors and lots of carpentry. I went from a subcontracted plasterer and a labourer to haveing 3 additional labourers which completely slashed my profit. I was totally honest with the customer and he was ok with readjusting the workload allowing us to at least finish on time.
Unforeseen work is different. For example, if you strip wallpaper off a wall and the plaster also starts to come off, then this was unforeseen and should be first discussed and agreed with the customer before work and additional costs take place.
Holding on to your reputation is more valuable than trying to make up for your losses. Customers appreciate honesty
Wickes, Screwfix, Howdens, Topps tiles and many more have trade accounts which mean you can sometimes save a lot of money with your trade discounts but beware as sometimes you can get totally ripped off on some items, so it’s always worth keeping your eye out for competition.
Be careful with your accounting if you choose to use a trade credit account as you could lose track of what you owe.
Of course, there are some advantages to using these trade credit accounts but you have to work out what is best for you.
Be in control
You can make lot’s of profit when supplying a customer with the goods needed to get the job done and this way you are in control of what is supplied and where it comes from. This will avoid you having to rely on the customer for the rite quantities and getting it delivered on time. The profit you make from this is like a handling fee (at no extra cost to the customer) and is well deserved if you have to reorganise anything. As for the quote, it’s best practice to make sure your customer sees pictures with full descriptions of what you are supplying.
On the other hand, if you are not supplying your customer, then you can still let them use your trade account which would also add value to your quote and entice the customer to accept.
The one thing that I always would advise anyone not to supply is coloured paint for the risk of getting it wrong.
Get to know your suppliers and stick with those who work best with and for you. Once you get to know the sales and design teams, they will make your life much easier when it comes to pricing and the installation process.
When you, the customer and a trade department work well together, it can make a good sale and a good job well done. Howdens, Magnet and Wickes are leading kitchen and bathroom suppliers with excellent tradesmen discounts in order to attract more business through you guys.
Polite, helpful, friendly, and flexible are some qualities which will help you be the one who the customer wants for the job
Honesty and punctuality are also qualities which will help you get the job and build a strong reputation
Understanding how formatting an itemised quotation is key to being transparent while maximising your profit
Risk and value perception
Adding more information per line of work in your quotes adds value to your work lowering the risk perceived by the customer
Using Subcontractors and labourers
Using labourers help get the job done while using sub-contractors enable you to offer a complete high-value service to your customers completing work that either you are not able to or haven’t got the time for
Take your time to get it right and avoid mistakes by always use a survey document
Save money using trade accounts and make money supplying furniture but remember you also take the responsibility if anything goes wrong
In the next lesson, we will be looking at....
Preventing problems from occurring and what to do if and when they do occur like
- Accidental damage
- Liability insurance
- Negotiation skills
- An unsatisfied customer
- Falling out with the customer and
- Using a job sign off document