A research paper published by Harvard university did an in-depth study of the entire renovations and contracting industry in North America. They found that the low barrier to entry and lack of sales experience resulted in many inexperienced contractors to under-pricing jobs as a strategy to acquire customers. This ‘strategy’ has infected the entire industry and made it difficult for great contractors offering quality work to sell their services at a fair price, without getting undercut. Often times, because homeowners know so little about contracting, they make poor decisions, like hiring the cheapest quote. Out of all contractors that we have interviewed, this has been the most cited grievance. However, there is an antidote to this infection. This is the solution that I've personally been able to deploy in my contracting business as a 19-year-old. I consistently beat more experienced contractors who placed lower-priced bids. How? It was TWO things: targeting, and system. Two things that most contractors didn't know to use or were too stubborn to try.

Targeting. I targeted neighborhoods that have a mentality and belief that PRICE IS NOT EVERYTHING. I can already hear you thinking, “well he is just talking about rich neighborhoods who have a lot of money.” No. In fact, over 90% of my business came from middle-class neighborhoods, but there are ways to filter and find key neighborhoods that have a belief of VALUE over price. There are three ways to target the right neighborhoods. One way to find these neighborhoods is by using Every Door Direct Mail by USPS. If you are you are located in Canada, it is by using Precision Targeter by Canada Post. These services allow you to sort neighborhoods and streets by income. The other methods allow you to sort home by interest, for example you can find out if a household has been googling phrases like “how to fix ____” making them key individuals to target and help solve their problem for them. The importance of finding these neighborhoods is one thing, but deploying the right sales strategy is another.

System. The sales system that I used in my business allowed me to close over 95% of my clientele in one meeting. I HATE when a client tells me “this looks pretty good, but we want to get another quote before we make a decision.” Whenever I heard that sentence I knew that I'd simply failed to deliver value in my quote and process.

To combat this I have developed a system that had three major pillars, that if I deployed, the client was almost guaranteed to sign with me. One of the pillars is a four-step process that filtered the right people for my service, this saved me money and more importantly time, because I did not have to chase across town to meet with people who were simply ‘price shopping’.

The four steps were: fast appointment setup, budget conversation, presence of both homeowners, and comfort of decision.

1. Fast appointment setup simply meant that I would lock-in the homeowner to an appointment as soon as they showed interested. I was sometimes able to do this 5 minutes after making contact with them for the first time. Speed is important because you need to catch the client at a time when they are most interested, which is usually right then and there since the attention of this project is at the top of the ‘to-do’ list in their mind.

2. A budget conversation was a very vague ball-bark of what the price of the work would cost. To emphasize, it was a VERY VAGUE ball-park. I do this because some people might simply have a totally different expectation of what a project would cost. For example, I was once on a call with a lady who was interested in getting a project done that I knew would cost around $15,000 to $30,000. When I told her this during the quote, her jaw dropped, she was expecting around $3,000. Needless to say, I wasted my time and I did not get the job. If I had just mentioned this over the phone then I would have saved myself 4 hours of my time, instead of driving there, pricing the materials, writing the quote, etc.

3. The presence of both homeowners is crucial to getting a decision right then and there. Otherwise, you will be greeted with the sound of “I have to talk to my (wife/husband) and then I’ll get back to you.” This is a complete waste of time. Furthermore, by having both homeowners present you are able to provide a quote that actually speaks to both of your clients' needs. It prevents future conflict, creates happier clients, and usually results in more work because what the wife might want to be done might be different than the husband; allowing you to provide more options for both of them to choose from.

4. Finally, you must set the expectation that before you leave the person's house that they are going to make a decision on whether or not they will choose you as their tradesmen. A YES or NO is actually fine here, because if you are able to check off the previous three steps then you are in the right place to be. The LAST thing that you want to do is get a ‘maybe’ and end up wasting time following up with them. This step is the simplest to explain but the hardest to implement, which is why the majority of contractors fail to use it. There is a saying out there that “the fortune is in the follow-up,” the saying should be “the fortune is in the follow-through.” Contractors and tradesmen don’t have time to be chasing someone around, let alone calling them again and again, getting half-assed answers that lead nowhere.

Get in. Present your offer. Get out. It’s that simple.

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Given the above, some contractors that we have talked to cited a worry around asking questions regarding the budget, partner presence, and decision making due to the FEAR of offending or angering the person, however, there is a very specific way of wording that would have the opposite effect and have the client get on the same page as you, working hard to make sure their partner is with them when you show up, their budget is figured out, and their minds mentally prepared to make a decision when you show up.

This filtering process is one pillar of the three needed to close the client, but what do you do when you actually show up at the house? How long should you be there? How do you present the agreement? What should you wear? These questions are all answered in the second pillar where we go over the actual quotation process.

When do you ask for the job? Where should my prices fall within my trade? How do I ask for a deposit right then and there? These questions are all answered in the third pillar where we go over the actual close and how to get a yes 95% of the time.

The truth...

The truth is most contractors have already tied HUGE anchors around their ankles, and the entire industry has been moving at a snail pace. Their belief system, lack of a sales process, and failure by trade schools to teach business skills have made it easier than ever for a rookie to enter the space and establish themselves. The contracting industry is due for a reformation. Age, experience, and background are all myths to what a client really looks for.

Clients want speed, value, and peace of mind. It is my understanding of these principles that has allowed me to scale from $0 to $500k per year by the time I was 21 with over 35% profit margins.

What's next?

This article has covered a lot of ground and all the things we have not been able to cover here will be covered in our FREE Case Study where we go more in-depth into targeting, scripts, and the other two pillars.

Click on the “Take Action” button to get that info FREE.