Steve Payne
Charging for "consultations" with renovation clients: Can it be done? Are you doing it?
Canadian ContractorThe idea of a consultation fee to weed out "tire kickers" is not a new one. We invite all renovators and builders to post a comment on whether they've tried this technique, and let us know if it helped (or helps) their business.
I read an interesting article in Fine Homebuilding this morning. It’s part of a series called the “Self-Taught MBA.” The idea is to give homebuilders and renovators the negotiation chops they almost certainly have not been formally trained for. Credit to their writer Fernando Pages Ruiz for making this stuff available. Here’s the online article.
The article contained one idea that you hear a lot lately: Charging for consultations with prospective clients.
The theory goes: if you charge (Ruiz suggests $500) for a “preliminary design and budget proposal” you will weed out the tire-kickers and have fewer customers waste your time when you were never likely to be a part of their renovations (if they do them) in the first place.
So, Canadian Contractor online invites you to share.
Have you tried charging a fee for consultation?
Did it work? How much do you charge?
Is this a regular practice of yours?
All opinions welcome!
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We started charging $500 for a preliminary design and proposal about 7 years ago. It has grown considerably since then. We have now started a second company to handle the preliminary designs, White Willow Design (whitewillowdesign.ca). We charge up to $5,000 for preliminary designs (including 3D renderings and interior design construction materials selections) and a fully guaranteed quote proposal. The type of clients we attract are of a much higher calibre than they used to be.
We charge estimate fees. But give a quality estimate/drawings. Offer a credit for same amount if we get the job – it separates the serious buyers and does weed out the tire-kickers looking for free advice.
I have also recently charging an initial “consultation” fee 2 yrs ago on all new clients for larger renovations.( I have alot of return clients and have a built in trust with them that the project will go ahead) This fee is credited back if they hire me to do the work. At first some clients baulk at it because “everyone gives free estimates” but when I explain how much work goes into doing a thorough quote and that the fee does not even cover my time most understand. It really stops the guy who is just seeing if they might have the budget for their dream reno.
Just one more comment on this issue. Many clients do not realize the difference between an “estimate ” and a “quote”. I can give you all the free estimates in the world off the top of my head but when it comes down to the time to hire someone to do the work most people want a firm dollars and cents # that you will do the work for to get the end product that they wanted. This is a “quote” and the only way to do that is spend some time as a contractor pushing a pencil around in the office, calling suppliers, meeting with the clients (more than once) and of course making changes that the client decides on.
A sure way for a contrator to loose good client’s and thousand’s or millions in Sales over the years.
thx
As a 30 year renovator, we started working this way in the early 1990’s and have not look back. The average free estimate takes 10-15 hours including 2-3 site visits because the client always changes his mind. Once you realize that your time is valuable $60-90.00/hr are you willing to give $600.00 – 1,350.00 to a complete stranger in the hope they might hire you to do work. If so have e-mails in my junk folded you might be interested in.
A fee of an on site assessment of a strangers renovation is simply fair to both parties. Anything else just abuse.