Contractor’s Corner: Selling mainstreet commercial jobs - Jan 2020
By Dave Safford
Selling mainstreet commercial jobs can be a special challenge because you are dealing with a different type of buyer. Decisions are often made more from emotion than specific facts. If you understand the subtle or glaring differences between these buyers and your typical commercial clients, you’ll be doing them and yourself a big favor and paving the way for your success in this niche.
Varying levels of perspective and experience differentiate mainstreet clients from other commercial projects rather than size of building, location or type of business. For instance, a small dental office, restaurant, law office or local independent church may utilize similar flooring products but have completely different requirements from that of a chain of corporate-owned dental offices, a national law office, corporate restaurants like Olive Garden or the Church of Jesus Christ of Latter-day Saints with its multiple units.
With single locations, those making purchasing decisions are inexperienced, unsophisticated buyers who have limited funds and are not familiar with products, installation and site preparation parameters. Following a site inspection, you must create an educational presentation. The more you can provide helpful tips and money-saving ideas, thereby relieving the buyer’s stress, the less you’ll have to focus on price. Unlike a standard commercial job, price is usually further down the final-decision list.
Become someone the client can relate to and work with easily. The most helpful preparation you can make for a meeting with this type of client is aligning your own mental outlook. A hard sell and aggressive pricing may sink your chances of the job. Make a friend, listen, probe for concerns and then find points on which you can agree.
On one recent flooring purchase, the buyer decided to forgo an aggressive price on installation and pay almost double for the convenience of a slower production schedule-the space was furnished, so it had to be cleared and the flooring installed in sections-but a high-quality installation job. Here, the material cost was about the same, but the buyer was impressed with the installer credentials (CFI II certified) and a project management outline that included several phases to benefit the client’s remodeling schedule. What sold the client was emphasis on a quality end result rather than how quickly the work could be performed, “Jeff was someone we trusted; he outlined potential problems, how they could be solved, the potential time, extra cost to us and how we could save money.”
SELLING THE JOB
A chance to sell the job starts with the initial contact. Whether this is from a phone lead, drive-by of your retail showroom or from a friendly architect or designer, make the most of your opportunity by asking questions. You may only have one chance to make a personal visit. “Tell me a little about the project and what you have in mind. Have you selected the general type of flooring you’d prefer or are considering? Have you seen something you like? Do you have a budget in mind? How soon would you like to have the project completed? Are you the person making the final decision on flooring, or is there another person involved? I want to have time to pull some samples, so would Tuesday or Thursday work for you, say 10:00 a.m.?”
Ask as many leading questions as possible since this will guide you to picking the right samples with a myriad of acceptable colors. There is no accounting for taste. I have seen clients with terrible color sense make poor choices. As a professional, point out possible choices but don’t dwell on them. I asked an old sales pro why he didn’t give a more direct opinion to a client; he smiled and said, “It all looks good from my house.” You’d do well to remember that. Just don’t make them feel like an idiot for inane questions or their lack of understanding. And for gosh sakes, don’t wait until the last minute to pull samples and then take along ten sample books. I still have nightmares about my mistake with that; I grabbed a number of samples (which were heavy) and lugged them up to the third floor, confusing the prospective buyer to the point that they said, “We’ll think about it and give you a call,” which they never did.
When making your presentation, always start with a short introduction to your company, similar to an elevator speech. Then, look at your notes and review with the buyers their responses to questions you asked of them. “Jim, when I spoke with you last week, you said you were most interested in carpet tile with ceramic in the entrance area. Is that right? You’d like to complete the entire job by mid-March? Have you refined your budget for flooring? I know you said you were working on it. Is Elaine going to be joining us? I know you said the two of you would be making the final decision.” Allow time for Jim and Elaine to provide any additional information. Don’t be in a rush.
Follow up your introduction with, “After our last conversation, I looked at a number of samples and selected these as the best value for meeting your requirements and color theme mentioned; all are high quality, available for prompt delivery and within a good, better, best price range.” Show the samples starting with the standard or good range. Allow for questions, and if you have gotten some idea of project size or have inspected the site, be prepared with “ballpark prices” in each range. “Elaine, should you choose this style and color, I’d guess you’d be around $11,500 or so, but I’ll refine this number.” Always set the ballpark number somewhat higher to give you room to refine and trim.
Welcome questions that show the buyer is interested. When you don’t have questions, worry!
One critical question I always ask is, “Have you seen anything you like that I haven’t presented here and from whom?” What you’re probing for is your competition. With a smile on your face, you can also ask, “Who’s my competition for your job?” If you do this right, you’ll get the information needed; if not, at least you are demonstrating your interest in them. Another great question is, “What would I have to do to get this project?”
It’s a good idea to find out how they anticipate the project stages being performed. This should uncover uncertainty, possible frustration or worries about components of the overall job. This can open up opportunities for you to include other services in addition to flooring replacement, if you are willing. Moving, storing, delivery of fixtures and furniture, painting, interior repairs and cleaning come to mind. We landed one nice project because we were willing to provide carpet cleaning for ancillary areas after the remodel was done and also have some minor wall repair and painting done.
Site evaluation, requirements, prep and feedback are critical to developing your proposal and the rapport with a mainstreet buyer. Most have no idea what is required to turn their vision of a new space into reality. Look at existing furniture, if any, files, equipment or existing flooring removal and disposal. Gauge the extent of floor prep or repairs that will be required and explain in as much detail as you can. If there is a complaint heard from most buyers, it will be that they did not understand and were embarrassed to ask. An extra $700 for floor repair and file cabinet removal will be readily understandable if you’ve explained the steps and time involved.
Always proffer a series of products where you have an advantage. If the buyer has locked in a product or design package, find out if he will accept an alternative. “Jim, we buy a lot from this mill and get key dealer pricing and priority delivery consideration, which could be important with your project schedule.” If he insists, at least offer to provide an alternative (or supplemental quote) for your product selections. Using that approach has gotten me another chance to get the job when I didn’t have the low price.
I would always suggest giving a detailed quote separated into product quantities by area, floor prep and repairs, product installation, applicable taxes and a total price. I would follow this with a detailed Scope of Work document that outlines product, color, approximate quantity, attic stock (if any), define floor prep versus floor repairs, method and type of installation and some idea of days for completion. Make it readable, not incomprehensible. While easier to give a “one lot furnish and install,” that approach does not allow you to sell the components of the job.
When you are getting client feedback, always ask how they are expecting to pay for the completed project. In commercial jobs, most include progress payments, invoicing and full payment within 15 to 45 days after completion. With mainstreet projects, ask for a minimum of 25% to 50% upon signing the order with balance upon project completion and approval. Find out if a company check or credit card will be used and the name of their local bank. All along the way, be sensitive to the nuances when asking these questions. “Uh, well, I guess we’ll just write you a check” doesn’t fill me with great enthusiasm. When I got the name of their local branch bank, I called the manager and asked for a reference; I was met with a thundering silence. Back channel info from another source was that this company was over-extended, had used up their credit line and had bounced a few checks recently.
An indication of a possible collection saga is when there is resistance to providing a deposit or when receiving a smaller amount than requested. A delay in getting the promised deposit on the project is a red flag! After my third follow-up on getting a required deposit check, I finally gave up and notified the buyer of my unwillingness to do the job. I heard they selected a competitor and stiffed him on the amount of final payment even after he had filed a mechanic’s lien-a messy outcome to a tough job.
Getting the job and shutting out your competition is a process. By now, most of your questions have been answered, you’ve done a site visit and analysis and should have an idea of what it will take to convince the buyer to choose you and your company. Take a few minutes and review. What other crucial questions should be asked? Perhaps another phone call to your buyer?
This is also an opportunity to find out if he has received other bids or is still waiting. I have always wanted to have my proposal in last, so the client could do some comparison. “Jim, you said you’ve gotten in some other quotes on your project. Are they coming in higher or lower than you expected?” If higher or lower, you may have missed something. Now’s the time to find out. “How do we look in comparison?”
“Honestly, I’m frustrated,” Jim said. “One of the guys just gave me a total price including taxes, and he’s lower. The other quote was for materials and labor, and the quantities seemed high. Your proposal was higher, but you did include more detail and a Scope of Work, and I was impressed with that.”
“Jim, I reviewed our bid, and it was priced pretty tight. When were you looking to make a final decision?”
There was a pause on the other end of the phone line, and Jim responded, “I’m expecting one more bid, and then we’ll decide.”
I responded with, “Tell you what, I really want your project, so let’s do this; go ahead and get your last bid in, and I’ll give you a call to follow up. In the interim, I’m going to look at our quote one more time and see if I can save you some money. Fair enough?”
Jim agreed, and I followed up with him. Our quote was still the highest one but apparently had the most detail and solid Scope of Work. Finally, I asked, “Jim, what would it take to do business with you today?” He asked for an 8% reduction, and we negotiated a higher deposit and 5% reduction to get the job. The real reason we were successful, though, was not price; he understood our quote and the multiple conversations had given him the sense that he could trust us to be fair and perform the job.
Often, the trust factor and great company credentials and references are the key. Having been guilty of being penny-wise and pound-foolish, I remember the great quote, “The bitterness of low quality will be remembered long after the sweetness of low price is forgotten.” Use this to remind the buyer of what’s really important.
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