Lupberger: Selling the Design Agreement

by Patrick OToole

Building contractors work hard. Too many contractors work too hard. Their experience has been hard-fought and comes from years of working in the trenches and learning what does and does not work. Those past lessons serve future customers as that learning curve allows a contractor to share that experience so that cost-savings and appropriate design suggestions are brought to every future project. You deserve to be paid for this experience and expertise.

When contacted by a potential customer and they ask for a free estimate, here is your new response:

“Do you want a free estimate, or do you want a real estimate?”

Most homeowners will rightly ask what do you mean? Let’s review of what goes into the preparation of a real estimate. We can take this time to begin training our potential customers as to the value that a real estimate provides.

The challenge we face here is that the media has not been helpful when telling homeowners to get multiple estimates for the projects they want done. A free estimate might be appropriate with a single trade project involving electrical or plumbing work but with remodeling, there are multiple tradespeople, material acquisitions, and an understanding of the total labor and overhead that will be required to complete a project. That is a challenging calculation with multiple moving parts.

Let us review this challenging process and what homeowners have been told to do when searching for someone to do their project?

  • Contractor search
  • Getting 3 – 4 estimates
  • Here is what is at issue here:
    • Is there a common estimating “template?”
    • Do homeowner know how to read an estimate?
    • What do they (initially) base their decision on?
    • Are all contractors created equal?

Question – are all contractors created equal?  You already know the answer to this. All contractors are not created equal. It is our job to show potential customers what goes into a real estimate and the value of paying for this needed service. Here is a list of what can go into the preparation of a real estimate:

  • Meeting with the clients
  • Comprehensive needs analysis interview
  • Jobsite measurements
  • Preparing conceptual drawings
  • Meeting with clients again
  • Design/floor-plan consultations
  • Meeting with subs to optimize the design
  • Revisions as needed to the floor plan
  • Meeting with clients again
  • Any blueprinting costs
  • Copies
  • Telephone expenses

Who can spend all this time and not be compensated?  Architects and designers are paid for this expertise. You also deserve to be paid for your time.

The first meeting with a potential customer allows you to review the scope of work to decide if this is a project you want to do. This is simple customer engagement, and this is where your experience comes into play. You can begin to create that vision of what is possible. This is why you are at that customer’s house – to review next steps in the project development process. At some point in the meeting, someone will ask what comes next.

This is your opportunity to review what goes into a real estimate (see the list above). If a homeowner has not done a project like this before (and most have not), an understanding of the process is required. Review the list of steps above. Review the research and planning that goes into this process. This is what will be required to begin to understand the scope of the project including the accompanying cost.

Do not stop there – bring a sample estimate that reflects the work that goes into a real estimate. Show potential clients an example. A good estimate will begin to demonstrate your expertise. I have found that good clients will pay for this service if they understand what they are paying for. I will also tell potential clients that I stopped doing “free” estimates because I could not take the time needed in a free estimate to truly evaluate the total project scope and cost. Giving a half-baked estimate is not what potential clients need. They need real numbers and if that takes 10 to 15 hours to complete, you should be paid for that time.

Some of the best sales training I ever received was when I told my sales trainer that a potential client asked me for a free estimate. He said fine, and he blurted out a random number. I asked what that was for and he said that I had asked for a free estimate – in response, he gave me one. He demonstrated the absurdity of the question. Again, do your clients want a free estimate or a real estimate? It is our job to detail what a real estimate looks like and the time that it will require. If you as a contractor are investing 10 to 15 hours of your time, what are potential customers investing? People will better value what they pay for. Show them the value of your service!

Getting a signed design agreement creates some powerful results. When the homeowner writes a check (however small), they are off the market because they will not sign a design agreement with more than one contractor. They are now your customer. With a design agreement, free consulting stops after the first sales call. QR

If you would like to see a sample design agreement, contact David Lupberger at David@RemodelForce.com. He will send you one for review.

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