The number one reason people don't build is risk, and it's
financial, emotional or time when we're trying to convert
someone, we need to be the least risky option for them.
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craftsman. Nick. I was just up in Connecticut last week
installing a pivot door with fine homebuilding and Anderson.
So keep an eye out for the content that we put together.
There real world, building a set, installing a door, sorting
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So keep an eye out not to I mean, while we patiently wait
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worth checking it out. Get it on the website and yeah,
or we're recording Yeah. All right. So Nick, we're on a quick
speed dating in Chicago. We are, yeah, bougie little restaurant
here. So we this morning. We.
We're kicking off the event 8am we dug into lead generation and
marketing. We scraped the surface of lead generation. We
did so we used a presentation that we've used before, we tried
to hone it down to a 45 minute conversation. It was still an
hour and five minutes, and I don't think that we touched on
everything that we could. I think it was, it was a good
topic to get people's
interest piqued, but there's just so much to it. And
something else that you had sent me with regard to lead gen was
one aspect of lead gen and marketing, which is what, well,
I mean, ultimately, lead generation is everything you do
to generate leads. Like, it's how you get clients to know you.
It's, you know, brief recap, it's all the branding, it's the
marketing. It's like creating awareness around you. How do you
get that client to know who you are? But after that, it's lead
conversion. And, you know, and I shared this presentation, I with
you, and I was hoping that we would get to it. I think we're
not going to have time to share it live, so I figured we'd
record a podcast on it. Lead conversion is really, you know,
you know who I am. How am I going to convert you into an
actual client? So this is after, like, any sort of marketing for
your business. And like, we always talk about a funnel, like
a sales funnel. So this is the people you've created the
funnel. You've created the marketing to back that funnel,
and you're bringing people into this funnel now, working their
way down through that funnel. Let's talk, yeah, let's talk
about the funnel, like, how people are getting into this
quote, unquote funnel. It's awareness. So it's they saw my
sign, they saw my truck. They see that they follow me on
social media. They saw the an ad in a magazine. They were
referred by a client, an architect, referred us something
like some way they became
aware of who we are and what we do. So that would be them
entering this quote, unquote funnel, and in terms of getting
them from there to essentially coming out of the bottom of that
funnel would be like they turn into a client. So just for for
reference, I may I mentioned earlier, 100 people that enter
our funnel, meaning like they, well, actually even further
down. But like, not only are they aware, but they reach out.
100 people that reach out, only one of them, so 1% convert into
a client. So when I first went into business,
I was so concerned with landing every single job that came
across my plate as your yeah, as you would be, which is actually
not what you want. Like, I hear one out of 100 Yeah, that that's
ideal. Like, that's a great fit for you, but you have to make
sure that the more specific you are with your ideal client
profile, you need less customers that are the right fit. You
actually need a wider top of funnel to bring in more people,
because if you're only capturing or landing 1% of that funnel,
and you need three jobs. Realistically, you might need to
bring in 300 people, 300 leads, right? And like the more
specific you are. It's counterintuitive, but you need
more people to enter that funnel. Well, I think the
marketing can be widespread, and you get people interested for
different reasons, where it's like some people just are
interested because they like what you do, not because they
want to actually convert, where you get hyper specific with the
client in terms of, okay, now they're a potential client. They
and, you know, you want them to self qualify ultimately. And you
know, we've talked about how the more process you can put in
place in terms of the qualification process, the
better. So you know, on simplest form, and what most people have
is a form on their website. They fill it out, it's like, name,
budget, like, what's the project? Give me a description,
and we're getting that email, and then you're vetting that,
like, is this a is this a good fit for us? Or you're emailing
back with additional questions, or you're hopping on a call, and
that's where you're typically determining whether or not this
is an ideal fit, or at least, does it seem like it's an ideal
fit? And then you go through the in person meeting and kind of
continue them down this process. But how do you, you know, say,
say, we're at that point, we hop on a call. Your budget's aligned
with my expectation. You know, you build in my area. You seem
like a good client. We meet like, how would I? What I
outlined here is, how do we take that and then bring them all the
way to, hey, we're building your house. Before we get to that,
what do you why do you want, in your opinion, why do you want
clients to self qualify, or potential client, clients to
self qualify, because it allows for the 300 to actually make its
way through the funnel. But how is that help like, how is self
qualifying helping you? Well, I think ultimately it allows them
to understand. It basically means that they understand our
process ahead of us, you know, engaging in a long.
Your conversation. So for me, it's you're saving like I'm a
super small business. If I'm spending time qualifying leads
and vetting leads, I can't make money doing things that make me
money, so it's saving me money and time and effort resources by
allowing clients to self qualify. But then another thing
that's huge for me is I don't have to tell a client that they
don't fit my client profile, which is like rejection, which
I've told, like, I've literally told people that, and they've
gotten so upset with me, like, my money's no good with you,
right? It has nothing to do with that, but for them to not feel
the shame for whatever reason that they don't fit your
profile, whether it's financial, whether it's needs, design,
whatever that may be, you're not the bad guy at that point. And
you don't have to physically reject someone, which I think is
huge from a business perspective as well. Yeah. I mean, just
tactically, like, you know, one of the things that we've tested
in the past and plan to re implement, is this conditional
questioning form. And ultimately, like we found that
it was, it was too complicated in the beginning, like it what
people weren't even getting into the funnel at all, because they
were like, I'm not I'm confused here. But ultimately, what it is
we built this in type form actually is a website you can
build conditional form forms, and conditional questioning is
based on what you answer for the one question Will will feed you
down a certain path on the other side. And we actually built it
to the point where, as you filled it out, you were taking a
path to determine whether or not you were so like qualifying. It
wasn't saying, Hey, you're qualified, but what it did is
essentially based on what you answered. It would, you we had a
scoring system so it would score like, Hey, if you know, if the
budget's 1000 bucks a foot, scoring is 10 out of 10, yeah,
you know, if it's $500 a foot, it's like, yeah, that's probably
like a four, a three or four. Because we just know we can't,
we can't build that. We would score all the questions, and if
they scored, say, 85 and over, we determined that that was a
good fit. And what that did is it brought them to you should
get like here, schedule a call with us so we can talk about
your project. If it wasn't a good fit, but it was close, we
said we would say, it doesn't sound like we are a good fit for
this project. You know, happy to, if you'd like to reach out,
you're more than welcome to. But it wasn't like, a direct, Hey,
we should talk on the phone. It was just an opportunity where
it's like, you know, if you'd like to further the
conversation, here's our contact and if it wasn't a good fit,
hey, sorry. Like, this isn't a good fit for us, but we'd still,
you know, put them into our email marketing so we would stay
in touch. That right there, I think is a really important
note, because we had a client that six years ago, reached out
to us and we had a phone conversation, and we the phone
conversation was, you know, high level, what it cost to build
with us. And they were like, I'm so sorry. Like, we're this way
over our budget. You know, appreciate the time, and I never
thought anything of it, like those calls happen all the time
six years later or five years later, that client came back to
us and went through, you know, some professional changes and,
you know, and could afford to build with us and re engaged us.
And it wasn't until, like, a few months into that that process is
he's like, do you remember what? Realized it was them, and I was
like, I don't. I force. I was like, truthfully, I don't. And
he tried to, like, jog my memory. I'm like, I'm really
sorry I don't remember that. And then years later, I or a year
later, he was more specific about when we talked, and I
actually remember exactly when that was. But the point is, is
we kept in like, We kept in touch. And now in that case, I
don't think it was email marketing. I think he followed
us in social media and was like watching what we did. But the
point is is like you keep them interested, and you continue to
educate them in the process, because ultimately, that's what
you know, you want them to be educated. And one of the I have
this written down in front of me, but the number one people
don't build, is strictly, you know, risk the number one reason
people don't build. The number one, yeah, the number one reason
people don't build is risk, and it's financial, emotional or
time. And you know, so for us, you know, when we're trying to
convert someone, we need to be the least risky option for them.
For any like, no matter how you cut this, like, that is how
they're determining who they work for, and risk is relative.
It's relative to each client and each experience too. Like, risk
isn't just financial risk, no, right? Like, there's a ton of
risk involved with every project. You have to understand
what your client's needs. What type of risk are you talking
about
in order to make sure that you're, like, fitting that
client's needs, but also, like, how are you going to base
everything on this project? Is it timeline? Is it design? Is it
budget? What is what? What's the risk with regard to, and there's
that famous saying, like, you know, quality.
Be price and time. Pick two. You can't have all three. And I've
always pushed back and like, you can have all three, you just
have to prioritize. Yeah, it's like, you know, just because you
want budget and time doesn't mean quality goes out the
window. It just means, like, that is a third in priority. So
for us, understanding the risk isn't necessarily saying, what
do you what? What are you concerned about? It's listening
to them talk about the project. And one we're going through
right now in pricing is that, you know, client came to us,
their budget's $2 million to do this renovation. You know,
they're in schematic design with the architect. Architect puts
together a very schematic level of drawings. We go through it,
and we realize that what is, you know, assumed in the design is
probably, like, closer to two, seven to eight. And so we put
together this high level schematic price. And we, what we
used to do is we used to go back to the client and say, Hey, what
you're designing so far is actually 20 million. And, you
know, forever we were like, we would the it, the process, like,
unraveled from, yeah, and I'm like, what's going on? Like,
we're being super honest. Like, that's our whole thing. Like,
we're transparent, we're honest. Like, that's great, but you got
to remember that they're paying you for pre construction, and
we're their advocate. And they communicated that their budget's
$2 million the design is at schematic level, meaning, like,
there's very little information, and we're telling them that
right out the gate, you're 800 over. So now they're like,
they're why we hired you. Yeah, they're spiraling. And now it's
like, Now this seems like a huge risk. And it's like, in this
case, the house is, like, partially demoed, and like, they
bought it and they're paying rent elsewhere. It's like, this
seems like a massive risk, so we didn't do that. Now. We said,
okay, that's where it's trending. We need to go through
this and understand what's it going to take to do a project
for $2 million because there's still enough information where
we can help guide that. So we looked at the scope, and we
actually worked backwards and said, All right, in order for us
to hit that 2.8 I mean $2 million number. Here are the
things that we need to consider, and some of them are removing
scope, reducing scope, or deferring scope, meaning
there's, you know, oftentimes millwork in rooms that they're
like, I actually won't ever use that. Yeah. So we can turn that
into furniture or do it later. So for us, you know, we
basically put together this $2 million option. So now we need
the client, and I say, hey, we you know, we're at schematic.
This is where we're at. This has been our process so far. We have
two things to look at. Today, we've put together a budget on
how we hit your budget of $2 million and we walk them through
that. I said the second budget we're going to walk through is
exactly what is designed with the assumptions that have been
communicated. And I want to be upfront like that is trending
$2.8 million we have both options, because now it's not,
oh my god, this is over budget, and we're never going to get
there. It's, here's what I can do for what I can afford, but
here's what I've been asking for from a design and ultimately,
where that conversation ends up is they look at 2,000,002 eight.
Okay, let's end up here. And that's two, one or two. So for
reference, what are like this? The constraints of this project,
new construction. This is a renovation, renovation. How many
square feet? 3200 like full gut renovation. It was originally a
full gut, and when we prior to the schematic, we said, if
you're going to do a full gut based on historic, you're going
to be that this was a 3.2
3.5 number based on other similar projects. So they said,
Let's not do that. Let's look at partially gutting it and rent
and working within the confines, like not stripping out
mechanicals, not redoing all the plumbing. So what's like, the
scope difference between two, seven and two. What in this, in
this specific example, it is, there's three staircases that
are on the plans to be torn out and rebuilt. So we recommended
not removing them and working within the confines of the the
existing are they getting relocated? Nope, one of them for
the roof was so we said, let's not relocate the roof one. And
ultimately, it was a nice to have, not a need to have, yeah.
So don't, don't change the roof access. Now. You're not doing
roof work or removing the hatch. Don't remove the two staircases
on the lower levels. Instead, modify the existing simplify the
molding package, because the molding package is super
complex, and multiple multiple profiles being built up into,
like, heavy molding,
go from 100% custom cabinetry to 100%
semi custom. Now I say that knowing that they'll come back
and be like, I'm fine with all semi custom, with the exception
of, like, the kitchen, yeah, we want to do custom there. Great.
Like, this is how we do the volley.
There was masonry repointing on the whole building. It was a
again, like, you probably need to do it. But it was also scope.
That wasn't part of the original deal and but we are recommending
it. So we said, we'll pull that out. You don't actually have to
do it now.
Now you can do it anytime, but it is something that you should
recommend. So ultimately, we gave them the path to get to
that $2 million and they get to look at that and say, All right,
I understand the difference between the two. I know I
definitely don't want the 2.7 I see the 2 million, but there are
a few things in there that I feel like I'm not getting the
house I want. Yeah, so in the she actually asked the question
is, like, so since I'm not getting what I want, Does that
just mean it's going to be more than 2 million? I said no. It
means, like, I want to see what we're missing out of that 2
million and then see what the difference that might be a 2.2
number. But then there might be things in the 2 million that you
still are okay, deferring, yeah, where it's like, All right, we
went from all semi custom to we don't even need mill work on the
third and fourth floor. So then it's like, all right, it's and
ultimately that the point of that meeting is, you know, in
talking about conversion, is like, the point of that meeting
is to get them to understand that we are here, and we are
ultimately able to get them what they're looking for, whether
that is the full design or whether that is the the intended
budget. How many, how many clients do you feel make their
way through the self qualification, through your
funnel that you land like, okay, so I feel, I'm confident that
this is an ideal client fit. We're gonna take this to the
next level. Like, how many do you feel you're signing for pre
construction out of 105 out of 105
out of 100 and then, you know, I mean, I say one, like one of
those converts, but, yeah, like, realistically, those five, I
mean, probably convert into full construction. It's probably
closer to two or, yeah, half. So a lot of people think that pre
construction is this like golden ticket to getting paid and then
building a job, which we've spoken about it before. There's
so there's like a consulting aspect of that. And, yeah, we're
the builder. We're hoping to build the house, complete the
renovation, or the remodel. But in in the aspect of pre
construction, we are just providing a service. Like, it's
not a guaranteed build at that point. It's not and I think that
the sooner people realize that, the sooner they can they will be
successful with the pre construction, yeah, because,
like, Sure, you're the whole point of pre construction. I
know you don't think this is the word, but is to de risk
construction, and that is the intent. I think it's de hyphen
risk. So I mean, I would assume that that would be de hyphen
risk. I feel like maybe de escalate the risk. I don't know
whatever de risk the construction. I keep saying, it
sounds good, it's good copy, and Doug said, lower the risk. But
ultimately, like, that's the goal of pre construction. And to
your point, a lot of guys are, like, so focused on flying
through pre construction so they can build. It's like, Dude,
you're like, the client has high anxiety about the build. You got
to get you got to make sure that you they don't have anxiety
starting construction, and this is your time to do it. Now, for
you as a builder, it's a really easy way to get a client on
board to to, like, get an understanding of the project and
help develop it. It's exactly why the wrong way to go about
that 2.7 example is, like, you price it, it's 2.7 you deliver
2.7 great. You've delivered bad news. Yeah. I mean also, like,
for pre con, even in that instance, right, two seven, you
have to have some sort of baseline metric to go off of,
right?
Maybe that number is one seven, but like, you don't know where
that's going to land, but you have to have a baseline to work
off of, where we're good here, we want to go up. We want to go
down, like one seven, right? We really anticipated doing a
little bit more, and we can stretch that, but like, there
needs to be some sort of basis reference point, like, in order
to work off of. And that's always that first round. I
always call it napkin budgeting, where, yeah, it's like, my
budgets always come in high initially. But the difference
here is, like, that's fine. You can you can come in high but
don't deliver a high budget. If they've asked you for for a $2
million you also just have to understand that that's just part
of the process. In order to get to where you need to be, it's
not a seamless process. It's not one and done. That's just one
aspect of this. And if you want to land those leads, if you want
to convert those leads, you have to understand that, like, You're
not always going to deliver good news. It's not always going to
be ideal news, but you do have to convert that. This is why,
like pre con is consulting. It's like helping them to get to the
goal. And too many people just focus on the wrong, wrong
outcome. It's like, Yes, you got to, you got to create a
baseline, but you got to be the advocate for the project. You
know, you the amount of times I hear people like, well, that's
what was designed. It's like, yeah, you're being paid to
consult on the design. Yeah, you're being, you're being paid
to help them get what they want.
For as close to what they want, for what they can afford. And
you also have to understand at that point, like, you have to be
able to
quantify that design with regard to
concrete numbers for Construction and Management, but
also what's the most critical, what's the most important for
this client? Right? Right? Like, yeah, we're a two, seven. What
is the most important aspect of this project? What can you not
do without what can we push what can we possibly face? What can
we get rid of? Who's to say that the initial design, like,
without any sort of
numbers apply to that from the architect, where there's that,
like, there's so little any understanding of what's going
on, what they're the client really has any understanding of
what that's going to cost. I mean, the clients, like, why,
you know, why are you factoring $100,000
for HVAC? It's like, I don't know. We're just right now,
that's a number. And, like, because we've done a project
that has a similar size, and we were able to accomplish that for
100 grand, and we got a pretty nice system out of it. If I need
to cut my HVAC budget, that's fine. We can target an $85,000
install, but we have not defined what that install is, so the
wrong way to go about that is apply an $85,000
budget and then go hire an engineer or your and talk to
your HVAC guy and be like, hey, I need to price it on this. And
then have come, have it come back at 100 grand. It's like,
Oh, it's 100 grand. It's like, Well, what was established like
instead, it's like, Hey, we're trying to accomplish an HVAC
design for this project at 85 grand. Yeah, okay, so we're
definitely not gonna be able to be able to do a heat pump
system, but what we could do is a traditional, you know, forced
air system with a hydra loop. It's like, Great, let's propose
that they might not want that. But if you're ideally, like, we
they're asking for 2 million like, show them what they get
for $2 million and that might be a hydra loop HVAC system, which
most clients don't even care. Yeah, but you like, we like,
forget that that is a decision that could be made in order to
save costs. Instead of creating this like, well, we only do, we
only do heat pumps. It's like, that's fine. If your budget is
not the concern you only do heat pumps, then you need to cut your
budget elsewhere and explain to the client, like, you're gonna
spend more money on HVAC, because that's part of our
ethos. And it's like, well, the client doesn't value that, yeah.
Like, we're in a different position here, where it's like,
set the parameter. It's similar to the mill work, where it's,
you know, this particular job, we had 350 grand for projected
millwork costs. So in the VE exercise, we said, Well, why
don't we cut that to 175 and the media question is, like, how are
we going to do that? It's like, how are we going to do what?
Like, cut it to 175 only half the amount of molding. I'm like,
no, just, I mean, just the cabinetry. Like, well, we don't
even know what the cabinetry is. We we have assigned a value to
it. So if someone said, Hey, I have 175
grand in my on the table right now,
put cabinetry in my house. You could put cabinetry in my house
for 175 grand. What it is is TBD, but if you know, you'd have
175
grand, you could deploy that money all in the kitchen. Or you
could deploy it with semi custom here, and like Home Depot vanity
here, or whatever the case is like, you can deploy that. I
mean, you could spend 160
on the kitchen and then 15 on the rest of the house, right
where it's like, we're just gonna put we're gonna all we're
doing is set from now. All we're doing is setting a target and
then working backwards from that. And that's part of this
whole pre construction consultant. And as far as
converting these leads like, obviously, they're through the
funnel now, converting them from a potential client to somebody
who's ready to sign up for pre construction, all of this
education, all of this consulting, is just instilling
that trust in that client, that they're willing to take the next
step in the relationship with you, where it's like, we're
still not sure we love what you do. We don't understand the
cost, but like, you don't have them signed. You don't fully
have their trust at this point. So to come in and say it's two
seven, this is just what, hey, I'm not the architect. You hire
the architect, whatever that conversation, yeah, like,
whatever that conversation, they still don't trust you at this
point. So if you're automatically not a team player,
you're pointing fingers like you just jaspered, yeah, like
they're not gonna hire you to do that job. But if you come to
them like you said, present multiple options. Here's what I
don't love about the two. Oh, here's what I don't love about
the two. Seven. Like, here are your options, here's pros, cons.
Here's maybe good, better, best. Here's where I think that you
could save some money.
At the end of the day, I'd like to see you in this range. You're
just you're building, the rapport you're creating, the
trust you're being a steward for that client, a steward for that
project, and you have their best interests in mind. They feel
safe.
They feel protected. They feel as though the risk has been deed
or lowered.
Right where it's like
getting them through the funnel is not enough. You can't stop
there. And it's just like, even at pre con, you can't stop
there, like you're not contracted to do the job, yet
you may not be nailing the numbers, you may not be hitting
the client's program. The design may not be what they want, like
it's not done until it's done, and then you obviously have to
play the dance at the song and dance for all of construction.
But converting that lead is such a critical aspect of this that I
think a lot of us, once we ensure client fit, we get
excited about the project and we're ready to sign this. Like,
you have to understand this job is doable based on all the
parameters and information that you have, and you don't have a
lot right now. So like, you're gonna get in bed with somebody
and sign somebody to a job and pre construction, and then get
into this and be like, Well, yeah, this job literally is not
doable anywhere close to this. And how's that helping anyone?
Right? It's not helping you. It's not helping the architect.
It's not helping anyone, like any of the project stakeholders,
and it's not the right thing to do. So like, you have to
understand what is, what is your lead gen process look like. But
then also, how are you going from now I've distilled that
down to five out of 100 How am I going to sign this one out of
that five, like the 20% How do I get the client what they want
within the parameters that they can afford? And so much of that
is like we spoke about in the lead gen of marketing,
understanding what makes your business profitable, viable and
sustainable,
while in developing that and like completely immersing that
in the needs of your client. But you have to protect yourself,
which I think a lot of people drop the ball on, or you get
excited about a project, numbers look good. You want to sign
this. Let's move on without really dialing in, what that
that conversion looks like,
Guys, if you want, I have a whole presentation on this for
lead conversion. If you guys want that, head over to our
Instagram, find the clip that is associated with this, or just
send us a message and DM us lead conversion, and we'll send that
presentation to you so you can comb through it and see all the
fancy graphics I added. Wait live from CCS.
See you guys.