Multiple Choice

Marketing, sales and estimating are the three most basic systems in a remodeling business.

May 31, 2004

Mike Gorman

Pop quiz: Which phrase best completes the statement below?

When price drives sales, the remodeling company...

1. doesn't have a marketing system to produce enough leads.

2. doesn't have a sales system.

3. doesn't have a quick and accurate system of estimating and writing specs.

4. all of the above.

Marketing, sales and estimating are the three most basic systems in a remodeling business. Marketing gets us in front of the prospect. A sale happens next. The estimating system either streamlines or bottlenecks the road to the outcome.

When these three systems perform well, we may need more systems to handle the growth created by a steady flow of profitable business. When they don't perform well, we may get stuck with jobs that suck all of our energy away and leave us with no time and no money.

Without marketing a terrible thing happens: no sales

When we find ourselves with no leads, we may become desperate, perhaps forced to take work at prices lower than necessary to sustain business. Marketing should be ongoing, continuously putting our name in front of the prospect. This system doesn't function well when tied to an on/off switch. Unlike an air-conditioning system that can cool the room in short order when the thermostat demands, the marketing system doesn't have a rapid or predictable response time.

Got too many leads right now? That's like having too many tickets to this week's lottery drawing. If you have a lot of leads, enjoy the situation and work on improving your system of screening leads. Never eliminate the marketing system.

Without sales a terrible thing happens: nothing

The only resource that limits our effectiveness in sales activities is time. Swamped with calls from prospective customers, we are not required to provide more than the courtesy return phone call unless there is reason to believe that the caller is a prospect who is likely to pay off.

We know that there must be three elements - need, ability and trust - present for a contract to be signed. Screening leads to determine which prospects inherently bring more of these ingredients is the first part of a sales system.

Only after we have screened the leads do we proceed through the appointment, enhancing trust, educating the prospect, defining and refining the solution to the prospect's needs, and, finally, presenting the proposal in exchange for a signature and a deposit.

Quick, accurate estimating avoids bottlenecks

No matter how efficient the marketing system is at producing good leads, and no matter how well the sales system works, an inefficient estimating system can cancel out all of those advantages. A realistic goal is to estimate and create the specifications of smaller jobs while in the customer's living room. On larger jobs, we create a budget and leave the first call with a design/build agreement.

This is accomplished best by relying on a laptop computer and portable printer. A unit cost system of estimating relies on a database of costs per unit of measurement (square foot, lineal foot, cubic foot, each, per pair, etc.) Using a simple drawing created either by hand or computer, we can quantify how many windows of which size and type or how many square feet of floor sheathing, for example. We plug this info into the unit cost system, which allows us to print out the agreement, payment schedule, specifications and allowances on the spot.

Mike Gorman has written a sales training manual for remodelers, teaches seminars and coaches individual contractors. E-mail him at mgbok@aol.com, call 800/218-5149 or visit his Web site at www.techknowledgeonline.net.

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