Aug 04 , 2014

Why You Shouldn’t Offer Free Quotes….Unless

Waste time waste money

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 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 pound 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.

Yet, I did this same thing dozens of times. It was one of the many ways I wasted money as a handyman.

Does this situation sound familiar to you? Do you feel like you’re wasting time with free quotes?

I think we’ve all done it.

However, I’ve since learned my lesson, and giving free quotes is no longer something I waste my time with.

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. To the customer, you instantly transform from an unknown handyman business into a real person.

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 3.3 hours.

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 (gas, wear and tear)

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, and I’d bet they are willing to forego the free quote and just hire me. Actually I know they will, because I’ve tested it.

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 with your wasted time and energy.

So, you have to decide if free quotes actually provide more value to your customers.

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, and it’s a reason that has their best interests in mind.

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 to give free quotes. But for Me?  I’ll stick with higher profits, higher efficiency, and more enjoyment in my business.

P.S. Giving free quotes is only one way handymen leave money on the table every single day.

If you’re tired of leaving money on the table, then make sure to check out my Complete pricing course so you can start earning more money with less time and effort.

You’ll not only learn how to price your services more effectively, but how to schedules jobs more effeciently and how to talk money with customers.

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