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AHEM
08-09-2005, 10:53 PM
I preface this by saying that I'm not used to, nor do I want to get involved with "submitting a bid" for potential jobs. There's certainly exceptions to that thought, but "bidding" on middle end, single family residential just isn't part of the long term plan.

99% of our clients are prequalified and aren't in the habit of shopping around, so I really haven't had a prior need to instill any sort of up front design fee.

After receiving a call from a potential customer who was referred by a mutual friend, and having an initial meeting at the new house site, they let it slip that they've received another bid for the job, and will be anxious to see my proposal.

Had I know that beforehand, I probably would have approached things a bit differently. I'm not sure if I'm offended that they've neglected to tell me that they're shopping for the best deal, or if I'm just being overly arrogant about actually expecting to compete against someone.

I'm sure that this has happened to all of us at one time, and maybe it's time to put a policy in place.

I'm curious about how everyone is approaching this aspect.

Let's say that the phone rings.

Caller: Hello there, my name is John Doe and my new house is in the framing stage and you've been highly recommend to us by Customer X. We'd like to meet with you about wiring our new home for audio/video/technology.

What's your next move?

RobbieS
08-09-2005, 11:04 PM
For us it depends on the person.

We have an initial meeting and get a feel for what they are looking for. We ask them flat out what there budget is. If it is realistic to their goals then we will design a complete system. Bring them back and go through the entire thing page for page. They don't get any drawings or schematics unless they make a deposit. Just an equipment list with spec sheets.

We have gotten almost every job when we were competing against another company. The clients always tell us that our presentation is much more professional, understandable, and our employees in general seem to know what they are talking about.

Now if their budget is unrealistic, we explain that and see if they want to up the ante or cut out features. If they wish to do neither then we just give them a quick quote and send them on their way.

If they are just looking for the best deal then we again provide a quick quote and see where the chips fall. Some we win some we lose. No sweat either way.

And then lastly, some people we just send away. If they are not willing to make a commitment we are not going to waste a lot of time on them. To many other fish in the sea.

sirroundsound
08-10-2005, 08:53 AM
It's a tough call isn't it. No one wants to toss potential business out the window, but at the same time we don't want to spend hours and hours of our time preparing quotes and details, only to have the client use them to get other bids. Many of us here do things differently, depending on their clients, and even where they are and how business is done in their area.

One simple solution, when dealing with a client or builder that you don't know and isn't a direct referal. The first sit down meeting generally is to discuss what they can have and find out what they want. You should be able to get a set of plans at this point. Based on the wish list you should be able to put together budgets for each system, this still takes some time, but your not going into detail. You need to go back to them with YOUR numbers and see if they are still standing. I feel that asking the client for their budget isn't realistic, it forces you to try to come up with solutions that fit a number in their heads. How would a client know what budget to give you, all they may have to go on is the fact that they see plasma's at BB for 3000.00, and they think that a lighting system might be worth 25k. You need to go to them with a system that is going to be great and fill their wish list, and that you know will work flawlessly. Now if you have to you can start to scale back, but you don't have to ask them to go up from here.

ATOH
08-10-2005, 12:23 PM
I agree with sirround. We meet with the client the first time to get an idea of what they want and to give them other ideas. We then work up a basic estimated budget type of proposal, which in our market is WAY higher then they typically want to spend, but then we work down from there to get it within the budget they want. We then put together the detailed proposal which they sign as the final.

The budget proposal gets rid of the tire kickers quickly. We live in a small area so meeting with the client is typically only a 5-15 minute drive. If you live in a city maybe there's a way you can put together some type of spreadsheet that would calculate an approx. budget amount in your first meeting. Just an idea.

We've asked for budgets before but no one seems to want to give us one. Again, it also makes us have to squeeze in everything we should do into a $ amount. The budget proposal makes it easier to make sure I have all the things I must use and we can trim the A/V receiver, projector, other things to get within their budgeted amount.

Kelly
08-10-2005, 05:31 PM
My feelings on why the client is reticent to tell you how much they can/will spend?

Client doesn't want you to "know" their budget, because they think that you'll just design a system to fill that amount, even if something at less cost would do the job.

I run into this with regard to what the builder has in the "allowances" all the time. Clients are often shocked when I come back with something that is well below the allowances in their contract. Of course the builder has initially asked me for guidelines on what amounts should be in the allowances anyway. :)

But back to your inital question.

In a case such as this, where you're bidding against another company, I'd just do a quick, down and dirty ballpark estimate with no itemization at all, rather than a full fledged proposal.

And I'd explain to the potential client that you can't justify spending several hours designing a system, and doing a detailed proposal, without having at least a design fee, or a commitment.

AND......

If you don't get a warm fuzzy feeling about them, you probably should quote a number that is totally off the wall... :twisted:

That way, if they do decide to use you, you're at least going to be well paid for putting up with a client you really didn't want in the first place..... :lol:

lowvoltguy
08-10-2005, 09:43 PM
I often find it hard to get "budget numbers" from clients ... Which is a shame ... I'm a salesman (and part time installer :) ) ...Trying to convince someone you have their best interest in mind when you ask for their budget is difficult at best ... But, I try to tell them "If this was my personal home, this is the system I would suggest" ... Trust is the key ... Get that and you've got them hooked ...

Gary
08-10-2005, 10:46 PM
Try this, ask if they have a budget for this project? They will usually answer with a number (great, you're done) or yes/no. If the answer is yes, ask is they would share it with you in "round numbers". To most people this is disarming and most of the time they will just give you a number. If the answer is no or they still won't give you a budget, try bracketing, "are you comfortable spending between $xxx and $xxx". Keep bracketing until you get a good idea of the budget.

Matt
08-10-2005, 11:02 PM
I think Gary is right on. With Cedia so close, you should be charging by the beer for info. :lol:

AHEM
08-10-2005, 11:04 PM
I'm not so much concerned with their budget as I am with the idea of quote shopping.

Granted, I'm not about to put 30 hours into design in this project without a firm committment, but at the same time, I did drive one hour, one way to meet with them only to find out that I'm bidding against someone else.

Am I wrong in being taken aback by being first told that I was highly recommended and then being told that they're comparing bids?

Isn't that something that should be disclosed prior to even having the initial meeting?

Matt
08-10-2005, 11:22 PM
We live in a world full of cheap people looking for a deal, some of the richest in the world have homes in my neck of the woods, yet they seem to shop prices even more (not all). I think the overall point to be taken from this thread is that it is important to qualify potential clients even more than we have in the past, a simple referal doesn't mean the same as it did in 99. There are a lot of hungry new companies out there and the clients know it. Dont waste your time being upset, just learn and apply it to the next potential client so you can minimize your time invested for services rendered yet unpaid (free quote). I would also fully expect this to be non isolated incident and prepare for more of these scenarios. No one is fully immune.

Kelly
08-11-2005, 07:49 AM
I'm not so much concerned with their budget as I am with the idea of quote shopping.

Granted, I'm not about to put 30 hours into design in this project without a firm committment, but at the same time, I did drive one hour, one way to meet with them only to find out that I'm bidding against someone else.

Am I wrong in being taken aback by being first told that I was highly recommended and then being told that they're comparing bids?

Isn't that something that should be disclosed prior to even having the initial meeting?

Well, in a perfect world, you would never have to bid on a job, or have someone "shop" your proposal. But this is just a normal event that you'll have to contend with now and then. Sadly more often than any of us would like too....

Try not to take it personal. This is just a normal thing for most sales related business. Besides, if they had told you ahead of time, would it have made a difference? Would you have just passed on the opportunity to make another sale?

Been there done that....many, many times....

sirroundsound
08-11-2005, 08:25 AM
We haven't done this, yet... but there are a few people around that charge an upfront fee for the proposal, they get paid for their time, the client gets their undivided attention and a system design that is right for them. After that point the client can just say the heck with it you have the job, or they can now take this and shop it. I have heard numbers up in the 1000.00's for doing this, or if they are awarded the project it becomes nothing (built into the proposal I am sure)
Not something that would be easy to get all clients to agree to, but certainly could be SOLD to many.

ssamsal
08-11-2005, 05:27 PM
I have gone through both ends of this spectrum. There was a period of time when I charged design fees prior to any porposal being submitted to a client. This was good and bad at the time. The good thing is I tended to get the much higher end jobs which is what I was going for without much hassle. The bad thing is that I wasn't given the opportunity on a lot of projects that I could have won to propose a system and sell our company more.

Now we put out proposals all day long, unless it is a scope that would dictate a design fee, which i'm working on one now.

I'm just not scared anymore. I very confident in my designs and my value in systems overall. I assume that a client I don't have a long standing relationship with is going to get more than one bid, if anything just to verify my design. In the commercial world, I have to work my ass off and put designs out for the oppurtunity to submit a bid. It costs alot of money to do this , but that is the cost of doing business in the commericial field. I guess residential bid shopping is small potatoes compared to what I deal with on the commercial side that I perceive it as standard now. I would rather saturate the market with my name and proposals. You get more fish with a net than a hook. Now with that said, this works for me and might not work for your business model, you might not be going after a days catch.

sharrison
08-13-2005, 02:06 PM
It happened to us. After we got burned for time and effort. What we do now is supply a bid with the brands of equipment without their model numbers. We also try and get the point across to the customer that when compairing bids that they are compairing apples to apples.I'm sure you guys also do this,we try to sell our company over trying to sell on price.

OEX
08-13-2005, 02:44 PM
I just won and lost jobs today but was given the same response by both clients as to why. "Based on the gear you spec'd....." One guy wanted cheap. I didn't even get a chance to rebid. His wife wanted remote mounted gear so I spec's in a pantry with a MA rack. The new guy - no rack, no remote, no remote located gear, no power protection, $300 receiver, $125 DVD, $75 in walls, no keypads. Get the drift.

The other guy wanted the better stuff and was INTERESTED in why my stuff was better or how my stuff could be better. The two hours spend in educating this guy made him want me even though I was a lot more dough.

Here's the great part. The jobs are in a duplex and these guys a neighbors. I can't wait for the finished projects. Hmmmm "Why didn't I get that?"

idodishez
08-15-2005, 12:19 AM
The other guy wanted the better stuff and was INTERESTED in why my stuff was better ..........made him want me even though I was a lot more dough.

It is just TOOO easy to take this out of context. :mrgreen:

Maybe its just my sick mind :twisted:

aforlano
08-15-2005, 08:58 PM
Hey,

From a salesman's point of view, here's what I do:

I ask them a MILLION questions to try and qualify them into SPECIFIC needs (price range and sometimes brand). Once I do that, I tell them flat out...we are in the business of providing a custom solution. If they are price shopping, we are NOT the cheapest they can find. We will match LOCAL brick-and-mortar stores, but not the internet for one reason - SERVICE.

If they decide they want to shop price anyway, I LET THEM WALK. Why? Simple...I don't want the support headache. I've had too many customers who bought stuff off the internet, then want someone to come rescue them from their poor purchasing decisions or to fix someone else's mess. Ours is a world of 'you get what you pay for'. Let the trunk-slammer take the calls at 9:00pm on a Saturday when the customer can't watch HDTV because they used cheap cables or they mounted the DirecTV dish too close to a tree...

Occasionally, I take jobs on where I lost the initial bid and the customer realized they made a mistake after the fact, but under a few conditions. I tell them flat out, they are being billed at our straight labor rate (not discounted, if they had been a parts customer of ours), and they will be billed for every single hour we spend working to fix their problem, which includes drive time, picking up parts, researching their off-shore equipment, etc.

The bottom line is, if a customer wants to shop the internet, or wants to play 'let's make a deal', don't waste your time. Most of the time, you won't win, and if you do, it's not the customer you want to have. Too many other fish to fry out there.

Just my $.02 worth.

Fred Forlano
Higher Definition

AHEM
08-16-2005, 02:17 AM
Thanks everyone for the response.

I submitted a bid, and the pricing was fair without even thinking about the fact that they may be price shopping me. In other words, like Fred just mentioned, I'm not about to play the price war game. Take it or leave it right?

I guess we'll see what happens next.

AHEM
08-16-2005, 09:36 PM
Ok, so pretty much as expected, I get a call from them this afternoon.

"You say that Brand X is the best, but the other guy says that Brand Y is the best"

"You've got three wires to this location and he's only got 2 wires, but in another area, he says that I need THIS and you say that I don't."

"We're still comparing the quotes, but we need to make a decision soon because it needs to be wired this week."

LOL, THIS WEEK????

To quote Gary Marshall in Lost In America.........

"We're finished talking"