I didn’t even want the job, yet there I was again, driving my truck down the highway on a hot summer day, on my way to give a free quote for a gutter repair.
I was new in the business and didn’t know any better. I thought all handymen gave free quotes.
So, there I was, taking precious time out of my day for a job I didn’t even want.
After my long drive, I got out my 65 lb. ladder, dragged it and positioned it beneath the gutters, climbed it, and immediately noticed that I needed a special bracket to repair them. I didn’t know where to get the brackets.
So, I turned down the job.
An hour and a half of my time gone with nothing to show for it.
During the drive back I was annoyed and frustrated about wasting so much time and gas. Even if I would have been able to do the job, it wouldn’t have been worth the extra trip for a quote.
Since then, I’ve stopped giving free quotes because they simply aren’t worth it. Here’s why.
The Allure of Free Quotes
Offering free quotes will get you more customers, no doubt about it.
When you show up to a customer’s house and meet them in person, the relationship instantly changes. You go from unknown handyman business to a real person in the customers eyes.
The potential customers gets to see your face, talk to you, and will naturally be more comfortable with you than with a handymen he or she hasn’t met.
This face-time with your customers will build trust and help you close more deals. Period.
Free Quotes Just Don’t Make Cents
As a former engineer, I’m a numbers guy. So, naturally I just geeked out and broke it down by the numbers. Let’s take a look:
In 2013 I painstakingly tracked my billable hours for the entire year so I could calculate my average hourly rate. As the saying goes “what gets measured gets improved.”
By doing this, I was able to look at some eye opening metrics.
Here are some numbers from 2013:
Average Job Size: $270
Average billable hours/job: 3.3 hrs
Average cost of materials/job: $44
Average Billable Hourly Rate: $68
Looking at those numbers, you can see that my average job size is pretty small at only $270 and taking me only 3.3 hrs.
Now, let’s take a look at what is required to provide a free quote.
On average, I estimate it takes the following:
- 1 hr of time (30 minutes driving to and from + 10 min looking at the job + 10 min formulating the bid + 10 min presenting it to the customer)
- $10 in vehicle expenses.
Based on my current average billable rate, that means the cost of giving a free quote is $78! ($68/hr X 1 Hr plus $10 to drive) In order to make up for that cost I’d need to tack an additional $78 on to the $270 average job price. I’d need to increase my prices by almost 30%!
That means a job that would normally cost $270 would cost the customer $348 for the same amount of value.
I doubt my customers would like that too much. In fact, they may even look elsewhere for a handyman.
The Truth About Free Quotes
You may be thinking that providing a free quote is another way to be helpful to your customers. Maybe to provide better customer service or to provide more value to the customer or something.
Here’s the deal, though.
Free quotes are never free. Let’s just clear that up right now. Usually, the expense is covered by an increase in hourly rate or hidden somewhere else in the pricing model.
You call it a free quote, but the customer is paying for it in the end. Or, even worse, you are paying for it.
So, you have to decide if they actually provide more value to the customer.
I’d have to raise my rates by 30% in order to justify giving them. For my business, that just doesn’t make sense.
Knowing that, I can explain to my customers a very good reason why I don’t offer free quotes. A reason that has their best interests in mind. That’s a good reason I’d have to say.
So Free Quotes Suck? Well, Not Exactly…
The bottom line is that free quotes simply do not make sense for a handyman business focused on small repairs and services.
But, that doesn’t mean they don’t make sense for you. Maybe you do bigger jobs. Maybe you only service one neighborhood. Maybe you’re just getting started and need all the face time you can get with customers. Or, maybe you don’t do this for the money and just like to meet people.
Those are all good reasons. Me? I’ll stick with higher profits, higher efficiency, and more enjoyment in my business.