Quote:
Originally Posted by PressurePros
Larry, if your close ratio is 90% your prices are too low. 60% is considered an outstanding close ratio. If you go over that you are working harder not smarter (more jobs, same money)
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60% is an outstanding close ratio in
what business? Is it the same for pre-paid funeral plans as it is for mobile homes sales or home alarms? I wonder what the closing rate is for the guys who sell meat out of their trunk? I'd like to see some documentation on closing rates for deck restoration in Missouri (or better yet, my zip code). Now that would be informative! How does that percentage account for ad placement and design? I don't claim to be the best closer around but...
If your theory is right, everyone everywhere should advertise anywhere and everywhere it generates the most calls without regard to a targeted demographic, and let your 60% closing rate theory increase their business. Is it possible that I just get more calls from people who are truly interested due to my ad placement and design? Or is it possible some schmuck somewhere only closes 30% of his calls, so we average each other out?
My advertising theory (from here forward to be known as "The Larry Davis- Don't compete with your competition," theory)is this...I
don't advertise
beside pressure washing companies, even though the daily paper I run my ad in has a specific heading for that. If I did, I would only get the readers who are looking for a pressure washing company to work on their deck. I advertise under Home Improvements, and spend a bit for for color (not many do), double the ad size (not many do that either), and get position at the top of the page by purchasing at least three months at a time. If I decide to try Roof Cleaning, I will do it exactly the same. My ad stands out enough that people can't help but see it (the only Deck Restoration one in the paper), and it reminds them that they need my service.
My ad finds them, not the other way around. A lot of my customers say they saw my ad, and were compelled to call. In other words,
they weren't even looking for my service until they saw my ad! That's what keeps me from having to compete with other companies, and gets me the business. My customers call me first, and often don't look any further. I also keep my truck clean, try to present a professional appearance, and try to price the work fairly.
Given your 60% closing rate theory...Let's say you send out 1000 flyers and get 20 calls for bids. Would you expect the same closing rate from them as from as from customer referrals? Of course not. Some callers have greater potential than others, and those are the ones I look for.
I've talked to, and seen bids, from others in my area who do decks, and our prices are nearly identical. In fact, in the example given earlier in this thread, I believe they would be identical. Like I said earlier in this thread, I try for about $70 an hour on the job. That may not be enough for you to keep your head above water, but I have relatively low expenses,
and only do decks. I have a cold water 4GPM machine (now three years old), airless sprayer (also three years old),chems from RPC and Pressure Tech, and stains from Sherwin Williams ($17 gallon) and Ready Seal. Of course I also have business licenses, insurance and such, but those costs are under $1000 annually. Another benefit of only doing wood is that I don't have to own a huge hot-water rig and trailer, along with the maintenence and other costs associated with them. Lower overhead means I can make more $$$ even if my pricing was identical with someone with the bigger rig and higher overhead.
I just re-read this before posting and see that I'm getting defensive. I'll let it go now.