Defining "Success" in Sales Rate

      If you're getting every job you bid on, you're probably not charging enough. October 4, 2005

Question
Can anyone give me an idea of the success rate of proposals given out for new work? Sometimes it seems we land almost everything we estimate and other times nothing is landed. Do you think it's possible people can sense when you need the job?

Forum Responses
(Business and Management Forum)
From contributor H:
When you feel like you're getting every job you quote, it means you're the lowest price or you give something others don't. When you don't get any, or very few, you're either way out of the ballpark or you're way too low. The latter is more common. Apples for apples is the key. Be sure that what you propose has the same specs as anyone else bidding for the job. My accountant told me 20+ years ago when I started out that "getting every job is worse than getting none."



From contributor S:
When you land almost every job you estimate on, you should raise your rates. When you get land hardly any jobs from all your estimates, you should improve your product and/or the way you present it. Simply put, learn to sell yourself better.

I have gotten a little fatter of late and as I don't have hips anymore, I have started wearing suspenders rather than a belt. My usual dress code is: T-shirt, short jeans, boots (Dr. Martens), cap (free from Makita or whoever), suspenders (black from Home Depot - 11 dollars), and a pencil (under cap just in front of ear). This is how I show up when I go to estimate. I blow the dust off before I go.

Many of my clients have given me work because I looked the part (and said so afterward, when I asked why they chose us over the competition). Also, I take a ton of samples and ideas with me.

When you don’t sell a product that you consider marketable, you should look at your pricing and see if you are competitive. Can your product be made better than the competition’s product? Look at yourself and ask “would I buy a cabinet from this guy?” One of my competitors wears a suit to his presentations. Now, I might buy insurance from him, but anything handcrafted is going to be a tough sale for him to make, as he simply does not look like a tradesman.



From contributor V:
I agree with the above. If you are getting every job (from different sources), your prices are too low. This is, of course, unless you are so specialized that you are the only shop that can do the project.

A good rule of thumb that my former employer told me before I went out on my own is to expect to get one out of three proposals. If you are getting fewer than one out of three, you are either too high in your price or you are coming off like a jerk to the prospective client. I have found that to be mostly true, although we do get a little more than 1/3 of the jobs we bid on.



From contributor K:
I noticed that most everyone here is saying that if you get most of the bids, you are too low, and that you should charge more to be competitive with other woodworkers. I agree that you should be competitive and I usually have problems in the estimating field. How do you know what the competition is charging? I thought about just outright asking, but feel that it is rude.


From contributor J:
I liked contributor S's approach, and I will add to it that he probably comes across as very confident. I think that showing confidence is very important. If you show the slightest nervousness - if you are worried about doing the right thing to get the job - the homeowner is likely to pick up on it and assume that your lack of confidence is due to your being the wrong person for the job. The price might well not be the most important aspect of your proposal. What the customers really want is to feel safe from making the wrong decision.


From contributor S:
You will never get a straight answer to the question if you do ask it. Every cabinet shop I know of has a completely different approach to estimating. No two will give you the same formula. Always remember that you are a business first and a cabinetmaker or furniture maker second. You have a responsibility to bring the clients to your shop or to get them to call you as much as possible as often as possible, and on every hour of every day if possible.

Many great cabinetmakers have great comprehension for case construction and poor marketing skills. You can build the greatest furniture in the world, a mere glimpse of which might ensure immortality. However, if nobody was aware that it was there and for sale, you would not move one piece. Many believe that they should charge what others charge to be competitive, but if we all charged the same, what would that do to our free market economy? The trick is not to charge the same, but to charge what you think you are worth and then market your work accordingly. When you sell every estimate you present, that is the good old supply and demand thing kicking in, so raise your rates. That way you will have better clients and you will be working less for same or more money.

I have many people call me and say they can give me lots of work. I always respond the same way. I don’t need work; I need money. Your goal as a business is to be profitable first. Your goal as a woodworker is to do good work at a relaxed pace that will allow the art to come forth from within you.

So, to answer your question… It's not what others charge that matters to you. It's what you make from your work that matters. Keep raising your prices to a point where your clientele is manageable. In short, your clients will dictate the grade of work you do and the price you charge for it. You just have to make a living at providing that work without killing yourself doing it.



From contributor M:
When I first started, we got 90% of proposals. (Way too cheap.) We now get about 30% or less, but bid way more projects. Keep marketing, keep raising your rates, select your clientele - don't let them select you.

You are absolutely correct. When you need the job, you won't get it. They sense your weakness and look at it as a sign of no confidence. When you don't need it, they want you. You truly need to believe that you don't need any particular job whether you do or not. That kind of confidence level goes a long way to making a sale. Don't be cocky; be confident. I am working with a new contractor just on his own. I can see his desperation come through when we have meetings with potential clients. They misread his wanting the sale to get money as him being unsure of himself. It is not good.

Also, percentage really means nothing in the short term. You can change nothing and land 5 in a row, then lose 5 in a row. A very wise and successful businessman I met said "20% of the people are going to go with you cause they like you, 20% will go with someone else because they don't. The other 60% are yours to take with the right presentation."



From contributor A:
I dress much like contributor S, just no suspenders. I go to the local YMCA and shower before I go so I don't stink, but I'm still in shorts, company shirt, hat, etc.

But the most important feedback I received from customers is I get the jobs most of the time because I show up when I say I will, or I call them, and I follow up. Believe it or not, people have a hard time finding someone to build for them that will show up for an initial meeting. I also listen to what they want and incorporate those ideas into the design. My customers say, if anyone else did show up, they designed what the shop wanted, not what the customer wanted. I shoot for 30-40% acceptance rate, depending on current workload in the shop.



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