Turn a prospect into a client

Sam is a good prospect. He invited you to his home to discuss more than $1 million worth of custom projects. He says he is ready to pick a builder. Sam’s architect referred him to you — the same architect whom you have been asking for opportunities from for two years.

Sam expects you to be an open and bountiful resource of information and expertise, willing to share your wisdom with him to prove you’re worth his choice as builder. He wants you to be a reliable guide for telling him what his project will cost even though the specification details have yet to be defined in writing. Sam adeptly dangles the carrot of his project while making you feel special about your chances of being his final choice. However, in response to your query about competitors, he answers that he is interviewing two builders referred by the architect, and one referred by his friend. He shows you plans that are developed schematics which are labeled in large letters, “Bid plans only, not for construction.”

As the meeting ends, he places the ball solidly in your court, “When can I expect to hear from you?”

 

Now you are at a critical juncture. You can confidently state that your proposal will be ready for him in short order, making your response typical of most builders. The up-side to this reply is that you are meeting Sam’s expectation. He tells you again he likes the idea of working with you. Sam anticipates that you will happily, and with great zeal for winning his project, agree to return quickly with pages of specifications and prices.

Your willingness to accept Sam’s offer to bid his project binds you to thousands of dollars of overhead expense for estimating and proposal writing. You are in competition with the other builders Sam invites and persuades to present a proposal. Your odds of winning are one in four … unless Sam failed to mention two additional builders … then your chances may be as low as one in six. Those are pretty good if you were at a casino.

You may be confident that your business record and estimating methodology puts you well ahead of all competitors, but in this market, the builders still standing are generally worthy competition. Sam will most likely attempt to complete an apples-to-apples comparison based on price after which he will use the low bidder’s price to negotiate with the builder he prefers. If my description of Prospect Sam appears a tad jaded, compare it with your typical prospect and take my advice accordingly.

Response B

There is another alternative to the typical reply. Explain that you enjoyed hearing about Sam’s project, and you were happy to share your experience and vision of how to build his custom project, but your dialogue has only scratched the surface of what is truly involved in the project.

You may elect to continue your response by shifting the discussion to the next steps your team will need to undertake. This includes site meetings with trades and suppliers, bid procurement and analysis, specification detailing, preparation of a construction budget and a working construction agreement, and a list of most but not all steps you need to take to be properly prepared for your presentation to Sam.

Then, if you want to continue this path, tell Sam you will get back to him with a proposal for how much he will have to spend to hire you to prepare a bid. Tell him your proposal will be in the form of a Professional Services Agreement that will outline the steps you will take, the goal of the PSA engagement and the timetable in which you will achieve the stated objectives. If you want to follow through with me on this approach, return next month for part two of Prospect Sam’s sales roller coaster.

Jay Grant, president of Grant Homes, a residential design/build firm in Mendham, N.J., focuses on building luxury custom homes and renovations/additions. He is the recipient of more than 20 industry awards including best website for granthomesusa.com. Grant is available for business consulting. Send email to granthomes@msn.com. Read past columns at ForResidentialPros.com.

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