Deck Estimates: Part 3 – It all comes down to price.
Here’s the most important thing you should know about pricing a deck: The best way to know how much a deck is going to cost you is to add up all the receipts when you’re finished. Yet, the deciding factor on whether or not that customer will purchase supplies from your store will likely come down to price.
So there’s a balance that has to take place while you build a relationship with your potential customer, and that’s why the estimate is so important. Remember that your customers likely will want to know the price as quickly as possible, but you’ll want them to learn about you and your store. In our earlier conversations about the deck design that they have in mind, you have already laid the groundwork to establish yourself as the decking products expert to justify the price you’re going to ask for in the estimate.
You and I may know that an estimate is simply an educated guess at what a deck is going to cost. But to your customer, that number floated out in the estimate is often seen as an absolute final cost of the project, especially to a DIY homeowner who may only build one deck in their lifetime.
In a retail deck supply store like mine, many customers build their own decks. Time and again, I’ve seen that I could give two homeowners an identical pile of lumber for an identically designed deck and they’d find two different uses for that pile. Preparing your customers in advance for this is really important. So many decking materials are specially ordered and you can’t return the excess. As you go through the estimate process, you have to prepare them for this possibility. If the homeowner makes changes during the building process, it’s going to have an impact on the end-of-project cost. We use a contract with our customers, which is a written agreement outlining all these points. We have them sign that agreement before we do an official estimate.
As a professional, you have a good sense of how much a deck is going to cost. If it’s all returnable product, you treat that a little differently than special order products. With special order products especially, remember that you can calculate how much decking should be used on a deck, but you can’t calculate how the customer is going to use the decking. They could be really efficient, or they could find themselves with a large pile of scrap at the end.
We try to always start by calculating how much decking we think the customer is going to need, and then we short it. We tell the customer, “let’s order less than you think you’ll need because you can always order more specialty decking, but you often times can’t return any that is left over without a return penalty.”
When we make a reduction in the estimate to avoid returns, we’re also increasing the likelihood that a customer will have to come in to purchase another board. It’s the best example of not knowing how much it will cost until you add up the receipts.
Before we give a final number, we type up a materials list. We also state that it’s the builder’s responsibility to proof and verify that list for accuracy. As I’m sure you know, contractors are notorious for nothing being their fault, so one of the line items is the responsibility as to who is going to proof read the materials list.
They can call and say they’re short, and that may be accurate that they don’t have enough decking remaining to complete the project, but they may also fail to mention that they changed the plans halfway through the build.
You have to anticipate that stuff’s going to happen and have to protect yourself.
Making sure you have compatible products is key. Often, when selling a certain brand’s decking, you’ve got to sell the recommended fasteners to go along with it. Even if a customer says they don’t want to use the fasteners, I insist that they purchase them, so that the fasteners are on the sales receipt. It’s up to them if they end up returning them. The same is true with all the components and railings.
Finally, put everything in writing. As easy as it is in this business to seal agreements with a handshake, it’s best to have a contract. Once a customer signs, then at that point it no longer becomes an estimate, but a sales proposal.
With a successful estimate complete and contract in hand, you’ve gone from introducing yourself to the customer, to talking materials, design, cost and have now entered the point now when they consider you their “deck guy.” When your customer is building his deck, check in during the process. After all, once the deck is complete, it will be your store that he recommends to family, friends
WEB EXCLUSIVE: For more detailed tips on estimating and deliveries, visit LBMJournal.com/BHMay.