Monday

What is Your Closing Ratio?

Many contractors talk to good prospects on the phone and they set appointments to meet with those potential project owners. The ultimate goal is get the contract signed so that work can soon begin. Part of the selling process is to give them your pitch about your services and products you work with. Since price is a concern with every project owner, your first instinct is to pitch your experience, past projects, quality workmanship, and timely scheduling.

You're probably lucky to close 1 in 10. For some, it might be 1 in 5, but in a competitive market some close 1 in 20.

How can you improve on that ratio? Knock their socks off. Instead of pointing out how many years your company has been in business, give your potential client powerful information about how you will be changing their lives. Your pitch could be a lesson or news story titled, "9 Ways Money is Pouring Out of Your House." Or it could be "12 Ways to Improve Your Property Value by 25% in One Month." What about, "Save Money, Save Time, and Save the Planet"?

When you provide tips, techniques, tricks, and valuable information during your sales pitches, several things happen. You will become the expert in their minds. You will
be offering potential clients something above and beyond your services that will have them talking to friends and family. You will be turning the attention of your pitch to the project owner and away from you. And people love to think and talk about themselves. When it becomes about them and the ways that you will help them, you'll see your closing ration creep higher and higher.

Provide them with information that they value, that goes beyond your services and products, and it will create a need over maybe just a want or a desire. And that is the secret to bumping up your ratio.

Is the Housing Downturn Affecting Your Business?

The slowdown in the housing market is affecting more than home builders and the mortgage industry. Many remodeling and home repair contractors are feeling the pinch. And for some companies, it's business as usual. One contractor told us business is still good but the jobs are not as ambitious. He said it seemed to depend on what business you are in and what part of the country you work.

If the phone doesn't ring often where you work, it's going to be a matter of riding out the storm. Many are saying this downturn could last through 2008. Of course, most saying these things have a vested interest in a quick market recovery, so it could mean the housing and renovation industries won't come back around until 2009. For some companies, it's going to mean cutting expenses. For others, it will mean finding more work. More than likely, it will mean a combination of the two.

Monitoring expenses and bringing more jobs is easier said than done. But you should resist the temptation to under bid to get a job. Maintaining cash flow is great in the short term, but cutting into your profit margins could really hurt your business. On the opposite end, pushing up prices to give you a higher margin might be tempting as well. But money is tight with many people and higher costs to them could mean even your most loyal customers will stay away or put off their projects.