November 8, 2012 at 2:52 pm #156129Mike TravisParticipant
For fourteen years we have closed an average of 50% of the business we have come in contact with. I was happy with this, until I started to look at how much time and money , ( now that I have a design team and sales staff ) we were spending to close a project.
With fuel always going up I really started to dive a little deeper into this “accepted” lost business category.
We started an online parallel company along side our construction company to give our customers a more confident and controlled starting point.
Curious to know if anyone else hase taken the time to assess how much they spend to close their clients’
MikeNovember 12, 2012 at 3:30 pm #156136mark fosterParticipant
I took a good hard look at this several years ago, and was amazed how large a percentage of overhead it represented. And, I don’t think your 50% “closing the sale” figure was much different than mine at that time.
The best thing I did was to charge for anything past the first meeting (we specialize in construction, so most projects need to be designed and detailed, which entails more than one meeting)– not much, but enough to determine if the clients were in earnest.
The most surprising thing for me was that our “close rate” has actually increased about 30% since then. Could just be a coincidence, but I think it has something to do with the psychology of the sale.November 13, 2012 at 7:32 pm #156135Mike TravisParticipant
Thanks for adding your comments Mark.
I currently incorporate the cost of the design into the construction project, but I’m not sure I’m recovering the appropriate cost of that either.
I build my projects on mostly cookie cutter lots, and it appears that the clientèle are not willing to pay more than $150 to $ 300 for a custom design. Some rather you just spray it out and tell them what it costs. I can understand that these are simply not my clients, but by the time I found this out, I have already been 30 min. at their home. Ugh!!
It opened up a can of worms for sure.
MikeNovember 13, 2012 at 9:14 pm #156134
I do residential and “residential sized” commercial landscape plans, sit it is a but simpler than some other markets. I spend an hour and a half to two hours discussing a project (usually on site, but sometimes in an office prior to ground breaking on new construction). Then it is half an hour to an hour customizing my proposal for design work to the particular project and client,. An pdf is sent by email and a hardcopy by mail – usually three to five days later. Two to three hours is what I invest. Nothing else happens until there is a retainer and signed contract. I ran an 80% closure rate so far this year …only two project management jobs (not what I like to do) and the rest were design only.
One thing that I learned from one of my previous employers, the most high end that I worked for, was to keep a low profile and try to be noticed only by people who are likely to hire you. This is simply to avoid dead end leads that eat your time. Balance between a low profile and getting any work at all is difficult at first, but once you have a big enough footprint and network the work starts to find you instead of the other way around.
One of the more common problems that used to be discussed on LA and LD messageboards prior to the crash was cutting out dead end leads. Ironically, to me, was that the most common discussions were about how to get your name out in front of everyone all of the time. Be careful not to over market.November 14, 2012 at 12:40 pm #156133
“Do your clients know what landscaping costs”
My answer to that is that if they don’t know what design costs while they are prospective clients they will find out upon receiving a proposal. If they don’t know what the implementation costs, they’ll find that out when they receive proposals to do the construction.
What things specifically cost has never been an big issue for me. If they are shocked by what my design costs when they receive my proposal, they don’t sign the contract or send a check and they move on. I moved on after sending the proposal and only move back when it comes back signed with a check.
The cost of the construction really is not that different as far as I’m concerned. I never ask for a budget for three reasons.
First, I don’t want to be crunching numbers every time I put an item into a plan.
Second, I want to give them everything that they are asking for in my design so as not to disappoint – they can decide what to change to reduce the cost in consultation with me, I’m never the bad guy.
Third, people are much more at ease when someone is not constantly interested in their money.
What I certainly do is work people for and listen closely for a qualitative budget. Talking about materials such as stone vs. pavers is going to tell me a lot. Suggesting features and getting reactions to those suggestions are good indicators. Some people will be very direct about not being in the same league as some of the jobs in the portfolio. No one wants to pay for a design that they can’t afford to build – they’ll give you hints if you pay attention and certainly if you ask the right indirect questions.
I know a Benz costs more than a Kia, but I can’t tell you what either costs. When I shop for a car I generally know what I can look at and what I can’t. I might find that what I want costs more than I thought, so I either have to dig a little deeper or compromise on what I get. It is the same thing.
I don’t see that a viable prospect needs to come into the process with a great understanding of the cost of a landscape. Cost is part of the design product no matter who does it. It starts and ends with whether we are dealing with viable prospects or not. We all need to know the difference and not try to make a client where one does not exist.
One trip to the site, one proposal (if it seems viable), and then it is out of my hands until/unless I have a retainer. … no big deal.November 17, 2012 at 4:43 am #156132tobyParticipant
“…I’m never the bad guy.”
I’m the opposite.
I’m shaking my head ‘no’ before the potential client can finish the question about a water feature. And I’m doing it to save myself (and them, but mostly myself) the frustration of a boondogle that will be non-functioning within two years.
I spent the first 17 years after graduating doing maintenance, installs, and the occasional design. In that time, I have seen maybe three well thought out, appropriately constructed water features. The rest were collecting leaves and mosquitos.
Oh, and I do the same thing when they ask for a bench in the garden !November 17, 2012 at 1:52 pm #156131
You are absolutely right that it makes no sense to put things in that are either unaffordable or unsustainable by the property owners. I certainly don’t put in a fountain on a whim whether it is mine or theirs. Those bigger issues are vetted out early on.
When I say “I’m never the bad guy”, it is that I don’t adjust what are already set as the goals of the project by reducing or dimishing them in order to meet a target budget. The goals of the design don’t change, so there is no disappointment in the design. The design is priced out and the cost is what it is. Unless I changed the goals of the project, I’m not seen as the cause of that cost. The client can choose to expand the budget in order to get all that they want, or they can choose to reduce amenities, change to some lower cost materials, phase the project, or a little of all of these. I’m part of that process, but it is not me who decided how to reduce the cost for them – just me explaining the options and the cost savings that go with them. They create the goals that give birth to the cost, they decide where to cut if they don’t want to meet the budget. This is why I say that I’m never the bad guy.
Frankly, it is very seldom anything is ever cut. Also, almost noboby phases a project despite how many tell me that they expect to when we start the design process. Once they get going, they find a way to finish it up.
Much like you, I had 17 years in the design/maintain/build arena, but mine came before my degree (at 35). The last 15 years I’ve been mostly in just the design end (12 as an RLA).
If someone wants a fountain, unless there is a practical reason why they should not have one, my job is to try to design one that works for them. If there is a compelling reason that tells me that they can’t afford it or some other reason why they are in complete fantasy land, it won’t be an issue because I won’t give them a proposal … I try not to work for nuts. So far, in the design business, I have not had any nuts sign a contract – I wish I could say the same when I was a contractor.
A relatively big retainer is a good way to separate the unrealistic people from the people who are committed and stay on track.
I never ask for a budget, no one has ever volunteered one, and I’ve never had a project not been built because it cost too much.
I don’t see client knowledge of the cost of landscaping as a problem either now or when things were booming.November 26, 2012 at 4:59 am #156130tobyParticipant
Yeah, I’m still the opposite.
The client lists the goals, and I cut them down to what [I think] is appropriate for their probable level of mainenance. If they insist, I’ll oblige with the design, but they get an earfull of the costs and time involved on their end.
I’ve seen too many water features that are nothing but calcium’d leaf collectors because the mowblow isn’t getting paid enough to bother with cleaning the filter or washing the deposits off with vinegar.
As for the nuts, I’ve often said (too often, it seems) to my contractor (he finds the work) that it would have been far easier to pull a twenty out of my wallet, hand it to them and say ‘bye,’ than working for the $.
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