Estimates are the first step in completing a transaction between you and your prospective customer. The estimate initiates a formal relationship with your client, presents the first impression of your business, and sets up what the actual materials and labor will look like over a certain timeline.
While some home contractors offer these preliminary estimates without charge, others find the potential advantages to doing so are not worth the loss of payment for their time.
So when is the best time to offer free estimates for your customers, and when should you charge a fee?
Here’s What to Consider
Many factors fall under consideration when deciding whether to offer free estimates, particularly when it comes to home improvement. Often, the reasoning may be based on industry and regional standards.
Overall, the type of work your company specializes in, the number of techs you have available, and even the location(s) of your business are all points to consider.
While some work is generally straightforward with minimal anticipated surprises, other work may involve complete inspections, potential revisions, or research back at the office. Complex or more labor-intensive work generally requires more detail, more time, and more expertise.
Other cost considerations may be case by case, including the distance of the job site from your location, the scope and duration of a particular project, and even your company philosophy.
Some companies want the estimate to be completely accurate from the beginning. In contrast, others want to leave it more open, in case the work takes more time than initially expected.
When to Offer Free Estimates
For many home improvement businesses, offering free estimates is a popular tool to get prospects in the door.
By extending free estimates to prospective clients, you’ll potentially attract a larger number of new customers who might just be shopping around or who are more budget-concerned. There’s no obligation on the customer to commit, so they automatically feel more comfortable beginning the process.
Offering a free estimate also allows you to sell in-person, talk about the project more in detail, and start a relationship with the client. Many customers have been Googling for months but have yet to hear real advice from an actual expert. Free estimates can act as the first step in earning a customer’s trust to complete the job.
While this can be an excellent strategy for your business, here’s how to decide if it works for your company.
Is the job straightforward, and does it make sense to offer an estimate for free? If a client comes to you with a clear problem that doesn’t likely have any extra hidden complexities, you’ll likely know the expected cost for the service based on similar services you’ve completed in the past.
Whether it’s painting a room where you are given the dimensions and know the current condition of the walls, or installing a certain number of lighting fixtures, it may be simple for you to offer a free quote without needing to invest too much time.
When Should Home Contractors Charge for Estimates
On the other hand, if an estimate requires a comprehensive inspection and has the potential to be more time-consuming or difficult than what can be seen on the surface, it may be in your interest to charge for your estimate.
When you do decide that it’s necessary to charge clients for estimates, you should do so on a sliding scale. An estimate for a single project in one room would be a lower rate than an estimate for a project that’s throughout an entire home or office space.
Take your time to research what competitors are charging in your area for similar projects, and communicate with your clients about their expectations and budget for services needed, before giving any quotes.
Consultations requiring multiple revisions, diagnostics, or several steps in the planning process could also warrant the need to charge for an estimate.
In this case, however, you should specify with your customer that they’re paying for the inspection and consultation, along with the additional planning required for the job – and not solely paying based on the number of estimates.
Another reason to charge for an estimate is if there are multiple parties involved in the project. If the contracting job requires you to communicate and plan a timeline alongside subcontracting companies and specialty professionals like electricians or designers, the time involved in scheduling and coordinating should be taken into account when charging for the overall estimate.
Deciding What’s Best for You
Remember, the decision whether to charge for an estimate comes down to what makes the most sense for your business. While some believe that offering free estimates will attract more customers, others have found that charging for estimates ensures your customers are more serious about moving forward and are hiring you for the duration of the project.
Either way, always be upfront with your client about what cost they can expect and what service they’re paying for when setting up any kind of inspection and estimate appointment.
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