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.

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".

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:

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".

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!

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!

Willie, as you guys know, I only do repairs, I have been only doing repairs for about 2-3 years now. Michigan was one of the first states that the economy went bad in, lowballers everywhere. I was being underbid by half my price. I let all my employees quit when they wanted too and when I had nobody left, I pushed all repairs.

Years ago, I laid awake at night hoping I sealed everything up when it rained. Work would be at a standstill when the weather was bad.

Now adays, I love when it rains. I get a call, check the job out, temp it if I can, go back and make the repair onn a good day. Rains alot? just go out and investigate leaks until its finished, then go back and make the repairs when its nice out. More rain, more repairs. If the weather is nice for a long time, I may do the inside repair work also, or turn to maintenance on the roofs.

Now this didn't happen over night like lots of people would like to think, it has been 20+ years of roofing on my own to have the referrals, contact and previous customers.

30 years of roofing has given me the education of the physics of water penetration and movement. I can almost tell what is leaking just from talking to the customer on the phone.

so would I rather work 10,11,12 hours a day tearing off roofs for pennies, or 4-5 hours a day making a good living........

I'll let all the other roofing companies fight for the reroofs, I'll go back and fix the lowball roofs when they leave....and thats quite a lot of them. most of my residential repairs are on roofs less than 4 years old.

I'll stickk to repairs !!

Pgriz: It's great to see you back on here! :) I always respected your posts. This is what i remember about you. Even the picture you use beside your name tells me what kind of person you are. Welcome Back! :side:

Ole Willie: same issues here. I've got about 40 estimates out this spring, so far sold 4 jobs. I'm using a broken business model - you know, the one where you do an good job for an educated homeowner who knows what they are needing and getting. Lately, I've been looking at a different presentation approach - which is to focus on the prep work needed to get the roof "roofable". Seems my competition is a little weak in that area, so it creates an opening for me, at least for those who care about having a good roof in the end. The real issue for me is to figure out who are the prospects who actually care about the details - with them I have a decent chance of coming to an agreement, and I'd say of the 40 that I estimated, probably only 10 cared about that.

I started this new company doing ONLY repairs for the first 6 months. I am one of only a few life long roofers that can handle repairs efficiently and profitably.

Unlike my previous larger business where I used subs to do the work, I now do all of my own work (again) and when it rains now days and my phone rings. It is a call for an estimate NOT a warranty issue.

I was able to survive on doing repairs only but just barely!

I only need like 1 or 2 re-roofs a week to thrive with this small business model.

The sob's do most all of the reroofing here. They have created a huge market for repairs over the last 10 years or so.

O.W Things have changed quite a bit here in the Sunshine state, since I was active. We to had a going rate, whih I never followed, if we had used the rate we would haved closed up way back when. When our market went to hell back in 2006 we closed up there was no way we could survive on a going rate unless we took short cuts on W/C and other items, its also why we got out of the residential market. We were working mainly commercial repairs and reroofing then that market became saturated with lowballers, so adios now I just sit around lol my son is working out of state on commercial special installations maintenance and NDL roofing systems, I had always said the reason for the collapse of our market was due to the contractors trying to make a ub standard living.You have to be competitive if you want to surivive, but how cheap do you want to go B)