You Could be Losing Gold in Your Screening Process

I frequently hear contractors talk about qualifying or screening customers. They imply a few simple questions will tell them all they need to know about a customer. Unless you are psychic—and if you are, why are you painting houses—you can’t do it.

About fifteen years ago, we painted two small bedrooms for a customer. Each year they would hire us to do a little touch up, maybe paint a few doors, and do some other minor maintenance work. They always seemed to be rather picky, the jobs were small, and we often thought of dropping them as a customer. But they were accommodating regarding our schedule, so we often used them as a filler on rain days. So we tolerated the hassles.

About six years ago they moved to a much larger house. They hired us to paint a portion of the house, and have hired us each year since to do a sizable painting project. Long ago they quit getting bids from other contractors. And they aren’t nearly as picky as they once seemed to be.

If I had “qualified” these customers, I might have never painted those two small bedrooms. Even after working with them for several years, I often wondered if they were worth the hassle. Today, I look back and realize that I would have tossed away $50K or more in work, simply because they didn’t fit my notion of what a “good” customer should be like.

I’ve had many similar experiences over the years. My initial impression of a customer is often correct, and just as often, it is completely off base. The problem is, it takes a lot more information to know when I am right and when I am wrong. And in the meantime, I could be dismissing a lot of potentially good customers.

Having said the above, I do “screen” customers. But my criteria is very simple: the customer must live in my service area, he must want a service I provide, and he must be willing to meet with me. Other than that, I don’t care how big the job is, whether it is in the hood or the richest part of town, or anything else. He wants to pay somebody to do painting, and I want to be paid for painting.

My goal is to sell paint jobs. I can’t do that over the phone. I need to see the job, meet the customer, and try to create a win-win situation. I can’t do that if I demand that a stranger know the secret answers to my questions.

Knowing When to Shut Up

Customers don’t really care how great you are. They want to know what benefits they will receive by doing business with your company.

The Eye-ball and the Low-ball

At one time or another, most painting contractors have used the “eye-ball” method of estimating. They simply look at the job—eye-ball it—and come up with a price. While this method can be reasonably accurate at times, it is fraught with potential problems. It can be easy to overlook details of the job, it is not systematic, and it lacks any scientific precision.

If you have been in business long, you have likely lost a job to a competitor who offered an outrageously low price—a low-baller. While there are certainly exceptions, low-ballers generally share much in common with eye-ballers (and indeed, they are often one and the same). Both fail to recognize the crucial role of understanding their numbers.

As a general rule, low-ballers do not understand their financial numbers. They claim that they have little or no overhead, and thus believe that they can charge low prices and still be profitable. As a result, they do not charge an accurate price, that is, a price that allows them to recover their actual costs.

Similarly, eye-ballers do not understand their production numbers. They don’t know how long it takes to prep and paint a particular surface or perform a specific task. As a result, the time they allot to a particular job is often inaccurate, that is, they do not charge for the time that is actually required.

The low-baller cannot properly correct his errors until he better understands his financial numbers. The eye-baller cannot correct his errors until he understands his production numbers. Both need to understand the vast improvements that they can make by measuring certain aspects of their business.

A measurement is simply a quantification of some characteristic or action. But it does considerably more than just tell us how much there is of something. It allows us to make informed, objective decisions. It allows us to separate fact from fantasy.

Consider the low-baller: If he really understood his numbers, he would realize that $25 an hour isn’t enough to pay for marketing, insurance, office supplies, depreciation, and other overhead. And he could do something about it before it is too late. Similarly, if the eye-baller really understood production rates, he would realize that he could produce consistently accurate estimates.

It may seem like a lot of work to learn one’s numbers. And it can be. But running a successful business isn’t always easy. Knowing your numbers makes it more so.

Click here to learn more about estimating paint jobs.

Selling paint jobs while you sleep

On occasion, my company will be hired by a homeowner’s association or property management company to do some painting in common areas of a small community of town homes. Many times, while doing this work, an individual home owner will ask us to do some small job for them, such as paint a door. These requests usually create a number of problems.

Painting a single door is seldom an efficient use of our time. After applying the first coat, the paint must wait for it to dry before he can apply the second coat. If his only job for the day is painting a door, I have to charge an outrageous price to make it worth doing. Most customers understand this, but don’t want to pay $350 to have a single door painted.

A few years ago, I realized that there was a way to create a win-win out of these situations. If I could arrange for the painter to paint five or six doors in the same group of townhomes, I could charge a reasonable price, keep the paint busy for a day, and make a profit. That is when I discovered that I could sell paint jobs while I slept.

When I am contacted to provide an estimate for one of these jobs, I survey the community for other work that might be desired by the individual home owners, such as refinishing doors or painting balcony railing. Because these communities are small (usually less than 20 homes) and the homes are similar in design, I can quickly work up a price for this work for each home.

Once we are awarded a contract, we begin marketing to the home owners. We explain that we will be working in their community, and while we are there we can offer special pricing on other work. I direct the home owners to a web page that describes the work we are offering and the price. And–here is the really cool part–I provide a link for them to order the service and pay for it through PayPal. I literally sell paint jobs while I am sleeping.

The first time I did this I turned a $1,000 job into a $5,000 job. Because the home owners were paying via PayPal at the time the service was ordered, I didn’t have any collection issues. Other than a few hours working up the pricing, setting up the web page, and doing a little marketing, it was almost painless for me. And it was very convenient for the home owners.

Because we have been hired by the HOA or property management company, we have instant credibility with the home owners. The convenience we offer greatly reduces the chances that they will seek another estimate. I don’t have to spend hours giving multiple estimates for small projects. And we can schedule our crews much more efficiently.

Looking back, this seems like such a simple idea that I am surprised it didn’t occur to me much sooner. However, as is often the case, many ideas seem simple in retrospect. But whether the solution is simple or not, sometimes all we need to do is think out of the bucket.

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