Selling is About Being Prepared

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It's difficult to build your business by being the low bid on every project.  With some homework and preparation you can more accurately price your services.

June 01, 2006

Doug Dwyer
Contributing Editor

Most sales training you will attend will discuss techniques and steps of selling. There are many great systems you can invest in, and it is critical to have a system.

Being involved in sales for more than 20 years now, I have found one thing that is often overlooked: being mentally and emotionally prepared for making a sales call. More specifically, are you personally convinced your work is worth the money you are charging?

Your answer may be "yes." The next question is, is that good news? That's a strange question, you may be thinking — or is it? Most remodelers underprice their work, so they are not really selling. Rather, they are taking orders based on being the lowest-priced company.

The point is not to stay lowest-priced too long. Most of the top consultation companies, such as Business Networks and Remodelers Advantage, teach that you must have at minimum, 50 to 67 percent markup, and with some specialty work, it should be at 100 percent to truly build a company that can operate without you someday — one that can produce the owner a nice salary and 10 percent or better net profit. I would have to agree with them.

Back to the question, but stated a little differently: do you believe your work is worth a 50 percent, 67 percent or even 100 percent markup? To say "yes" and to actually sell jobs at those rates is where the rubber meets the road.

How can you sell at margins like that and be convinced you are worth it? First, generate enough leads so that it doesn't matter as much if someone says "no," because you have more qualified leads to call on.

Second, know your numbers. If you have a grasp on them, then you will know that you have marked up your work at those rates to build a business. What I mean by building a business is one that can pay you a fair wage for all the work you do, afford you to hire "A" players to help grow your business, to consistently give world-class service, and to have a strong net profit. Most remodelers I know are good and hard-working people, and they don't ever want to be accused of taking advantage of someone. The reality at these types of markups is that you are not taking advantage of anyone; you are charging what is necessary to grow a business with a fair net profit in the 10 percent range.

Third, make a list of all the features and benefits your company provides to your clients. Most companies and/or salespeople focus too much on features of the products or services and not enough time on the intangibles or benefits of doing business with your company: benefits like developing a trust in your relationship with them because you use a systematic approach or your taking care of the job from beginning to end equaling peace of mind, or whatever benefit you can or now deliver over and above the physical product.

Let me give you an example. Even though Sears has a mixed reputation in remodeling, they are able to sell at 200 to 400 percent markup. Why? Because people, for the most part, trust Sears to deliver. I spoke with a contractor in Massachusetts that bid a siding job at $11,000 while Sears came in at $22,000 — and got the job. Then, by chance, they called him to be the subcontractor to install it.

So Sears didn't have better installers, but they did provide peace of mind and trust. You can do the same — maybe not to the same degree, but yet at a competent degree to get the price you need and deserve.

If you have more than enough leads, then know why you need to charge with the appropriate markup and sell not only features, but benefits. Then you will sell more efficiently and profitably. Test it out and see it work for you. PR


Author Information
Doug Dwyer is president and chief stewarding officer of DreamMaker Bath & Kitchen by Worldwide, one of the nation's largest remodeling franchises. He can be reached at doug.dwyer@dwyergroup.com.


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