Sales and Pricing

Ok, there's been a lot of reply's about this subject lately but no topics so I thought i would see if i can stir something up! B)

Since I'm the instigator here, I will open up a bit and give some more precise numbers, etc. than I normally would.

I pulled the files for April and did some research. I found that I had done 31 reroof estimates and 30 repair estimates in April.

Of the 31 reroofs I had only sold 3. That's a whopping 1 out of 10 or 10% closing rate. :woohoo:

Of the 30 repairs I sold 20. 2 out of 3 or 67% :)

Keep in mind that I have been bidding roughly $25 per sq.( or $500 to $1,000 per job ) over "what insurance pays" and "the going rate".

Also that this is a new business( just under 1 yr. old ) so there are not that many referrals and repeat clients YET!

I use better materials than the average company around here (No #15 felt and NO 20 yr. 3tabs) (Yes a lot of company;s around here are still using this stuff) and I work on the roof with the guys on every job supervising every little aspect and leading by example the entire way start to finish.

I also replace all flashings, including chimneys and walls. I use I/W in all valleys and I include turning the project into a properly ventilated structure.

I decided to call every reroof estimate that i had done in the last 2 weeks but had not heard back from to see what was going on.

Nearly all of them said that they were leaning toward my company but were presented with lower bids and chose another company based on price.

Two of them had still not chosen a contractor yet. One was shopping around and the other said she couldn't see any reason they wouldn't use me except for price because the insurance wasn't paying anywhere near the quote I had given her and they were selling the home with a couple years.

I don't care to pay for 10 leads, pay for gas to do 10 estimates and spend 2 days running all over the place doing chit for free just to get one friggin little job.

So, I will be lowering my pricing to "the going rate" for the month of May in an experiment to see what kind of impact this will have on the closing rate for May vs. April.

If it doesn't get any better I will either go back up in price or just do repairs only in the future.

PS. Most of my leads come from my web site which is consistently ranked somewhere in the top 3 spots with all the search engines. Frequently 1st.

:laugh:

Well, roofing has always been tough and competitive. I'm not sure if it's any tougher or any more competitive today than it ever was.

One thing for sure though is that it's very different from years past.

When replacing the entire roof, most home owners look to a bigger company. However, by the time repairs are needed, they have lost much of their faith in the bigger companies.

This opens up the door for us smaller outfits. By this time they are not really looking for a company at all. But they seek a very strange and evasive creature.

He is called, "A ROOFER".

Hi Mr. O this is Fernando with Home Depot. We are really clueless and not roofers at all, so I don't know about your leak. We have roofers we know about. They can replace this whole roof in a day. And the insurance company will pay for it!!!

Then when it, oops, I mean IF it leaks, we'll have an expert from that same crew come out and cover up, I mean caulk the problem.

And then if the problem persists, call Willie. Cause next week I'll be selling shoelaces in Taiwan

Um, that don't worry willie ANY! I can fix a roof leak faster than the guy at home depot can "finally" get you to the isle the things you need are on! :lol:

Here's what it will sound like for the customer rep from Home Depot who finally got around to the repair call.

Hi, Mr. X this is Fernando with the Home Depot. I was calling to schedule an appointment to look at your roof leak. Oh, I'm sorry Fernando but Willie fixed that 4 days ago!

Hi, Mr. Y this is Fernando with the Home Depot. I was calling to schedule an appointment to look at your roof leak. Oh, I'm sorry Fernando but Willie fixed that last week!

Hi, Mr.Z this is Fernando with the Home Depot. I was calling to schedule an appointment to look at your roof leak. Oh, I'm sorry Fernando but Willie fixed that day before yesterday, along with my neighbor across the streets missing shingles and He will be starting on my mom's full roof replacement project this coming Monday!

:blink:

I see Home Depot is now in the Roof Repair Business.

It has gotten competitive here. I guess. The same Home Improvement companies who don't know how to put on a good roof, will now take your money for repairs.

Go figure. I'd guess they prolly charge about $35 an hr. too.... :ohmy:

New construction is 99% cheap hispanic labor here.And not just roofing either. Almost all trades. The quality of the average new home built around here has all but been reduced to rubble.

I was on the roof of 2 different town home complexes ( both less than 10 yrs old ) just yesterday and the rafters were so unlevel ( and the plywood rounded accordingly ) that I kept twisting my head side ways trying to figure out which way the water ran when it rained.

Numerous areas of the roof too not just one. It reminded me of the hills of Tennessee. The old saying goes: "All the cows in Tennessee have short legs on the left side and long ones on the right".

GKRFG: [ RE: Sales and Pricing ] , Tuesday, April 30, 2013 @ 12:49 PM I am a : Roofer Maybe you could send a mailer to all your past repair customers and offer an incentive to use you on their new roof needs. I hate to lower my prices. I have done it on occasions but usually find that I can't keep them lower for long.

Being the company and person who removed their roof leak problem from their life when the repair work was done has already provided them with a tremendous amount of incentive. Many have sent me letters after my repair work was completed and numerous rains had occured with no more leaks stating quote "Making you my Roofer".

I was almost all new construction only for decades. I would sell a reroof and then not have an open window of time to do it. Now I haven't done a new construction job since 2008. I do additions, though. I still struggle to have an open window of time to do a reroof, though.

I rely on maintenance and repairs. I usually am booked for two or three weeks in advance and my sales spiel is to subtly convince the customer they better hurry and get on the waiting list. I just have one helper and enjoy not having to deal with all the personnel headaches of the past. I won't get rich, but it's nice to consistently net $6-900 more at the end of the day than when I got up that morning.

I will warranty a repair if I address every possible problem in the drainage area of the leak, usually giving two prices and letting the customer decide.

pgriz: You are spot on about most of that reply. Except the warranty deal and it being intermittent. I give a 1 year guarantee on everything i lay my hands on. To be able to honor this I simply will not do anything sub-par. After nearly 30 years I know what will work and what wont. This won't hold up but, performing all of my own repairs in the last 12 months, I have had ONE person call concerning a warranty issue. It turned out to be a seperate problem unrelated to the work I had done and yet another job was gained!

I either KNOW 100% what the problem and solution is or I will bid to redo that entire area of the roof.

Also some times the repair call turns into a complete roof sale at the time of the estimate. If not, then a repair is performed, a problem solved and a future repeat client is gained.

I often get the whole roof replacement within a couple years. Sometimes remaining the only bidder as the person i did the repairs for made me their roofer at that time.

Concerning repairs being intermittent, for the month of April, I took 31 calls for full replacement and 34 calls for repair. This was on the low end for repair calls .But I live and work in one of the most rainy areas of the country and the quality of the average roofer in this area is sub-par. And that's being friendly!

The thing about the repair business, is that it is a different dynamic than the rest of the roofing business. It tends to be small is scope, requires someone who is adept at problem diagnosis and many different techniques, and who can respond very quickly. On the customer side, whoever gets there first, gets the job, price be damned (well, usually, but not always). And there is (usually) not expectation of guarantees - "just fix it!". So it is a niche market that can be very lucrative while it lasts, but it is, by its nature, very intermittent. I am thinking of setting up one senior installer to be available to do exactly this kind of work, but at the moment, I cannot spare the experienced workers from the regular installations. However, it is definitely something to keep in mind, at least in our case.

GSD: I am very fortunate to have a loving wife who helps me with that end of the business and has been doing so for some 20 years.

I just can't stand answering the business calls while out on the road.

She texts the info to me immediately and usually I am near the area and respond as soon as I'm done where I was working at the time of the call.

If I can't make it there that day, then a simple call to set an appointment will usually lock the job up!

With repairs, whoever they get ahold of first is usually the one getting the job. If I'm not in the office, I shoot all my calls to my cell phone, that way I never miss a call.

most of the people say, "I can't believe someone answered the phone."

Well, so far this week the problem has taken care of itself. Hasn't rained in a while and I only took 4 calls this week so far. All 4 for repair and all 4 SOLD! :)

So now instead of 20 out of 30 repairs sold its 24 out of 34. Increasing the closing rate from 66% to 75%.

Improved from 2 out of 3 to 3 out of 4.

One thing I like about doing all this repair work is that I am rapidly building a customer base for this new business. This means more referals and repeat business.

I'm not doing them at Walmart prices either!

Most often, I am the "ONLY" bidder!

Maybe you could send a mailer to all your past repair customers and offer an incentive to use you on their new roof needs. I hate to lower my prices. I have done it on occasions but usually find that I can't keep them lower for long.

GSD, I did not know that about you. I have 28 years experience and I don't mean that i roofed a dog house at 19 yrs old and then half a mobile home at 33. etc. etc. I have roofed every single day of my life from before age 17 until now at 45.

Repairs are certainly a niche! Most of the big outfits don't care much about them and that's probably a good thing because they dont KNOW much about them either.

I had been roofing for 14 years before I started my own business and it was not until then that i TRULY began to learn about repairs. Over the years, I developed into a repair specialist in the same kind of way a cardiologist is a heart specialist.

After some more time, I may be able to make a good living of it at only repairs. But what doesn't make sense to me is all the future reroof customers I would be gaining by doing the repairs. If i tell them now that I don't do reroofs then all that work will go elsewhere when 80% of it could of been mine and much less price dependent.

One day in the future, I may do free estimates on repairs for anyone and free estimates on reroofs for returning clients and referrals ONLY!