Are You Confident When Sizing a Heating Job?

I was doing a seminar and during the morning break a contractor told me a story about something he has been doing for the past few years. I thought you'd enjoy this as much as I did.

"We do a lot of radiant heat," he said.

"That's great."

"And we do a lot of it in a very-high-end neighborhood," he added, and then he mentioned the area. It's a place where they pave the streets with silver dollars.

"It must be pretty easy to sell radiant up there," I said. "That's where they use currency as a fuel, isn't it? They burn their old tens and twenties, don't they?"

He laughed and told me that the truth was, most of the people in that area are cheapskates. "That's why they have so much money, Dan. They don't like to part with it."

"So how do you sell them on these higher-end heating systems?" I asked.

"I begin by giving some of it away," he explained.

"How's that?"

"Well, when they're pouring a slab – and they're always pouring a slab – I install the PEX tubing for free."

"You mean you give them the tubing and charge them for labor, right?"

"No, I don't charge them a cent. The tubing's free and so is the labor. I just tell them that I'm going to work with the concrete guy and that I'm going to make the slab radiant-ready – just in case they should change their minds later on. They don't have to pay me a thing unless they want me to hook it up. Up until that point, it's absolutely free – labor and materials."

"How can you afford to do that?" I said.

"I can afford to do that because each one of them has called me back to finish the system. One-hundred percent. We have never lost on this. Not once."

"Do they know what the radiant system would cost?"

"Sure, they do," he said. "I always give them a price for a radiant job, but they often balk, saying it's too much and they don't need that sort of heating system. It's too much of a luxury. They can do without it. That's what they tell me. So I give them a price for a lesser system and I tell them that I'm putting the tubing in the concrete for free. They can call me later if they change their minds."

"And they do."

"They sure do. A funny thing happens to a homeowner, especially a rich homeowner, when he's walking on a cold floor. He knows that it doesn't have to be cold, and that's what finally gets to him. He knows it doesn't have to be this way. He doesn't have to be miserable. All he has to do is pick up the phone and call me. I'll take good care of him. And since months have passed since he spent the major bucks on the house, what I'm going to charge him to finish the system now seems cheap to him."

"And when you go back, do you charge him for the tubing and the previous labor?"

"Of course," he said.

Doesn't that make you wonder why more contractors don't approach their customers this way?

Now, here's another angle on the same situation. Another contractor sent me an e-mail recently. He wanted to tell me that he has been offering clients free PEX tubing for any slab they're pouring. This sounded very familiar. This guy, however, included a BUT in his proposition. He told his customers that he needed to get paid for his labor. "So far, though, I haven't had any takers," he wrote.

So what do you think? I think the homeowners figure this guy is going to hide the cost of the PEX in his labor charge. People are always on the lookout for a scam, and the way the guy is presenting this deal, it sounds like a scam. Even if the guy is honest, it still doesn't smell right.

I sent him an email and told him about the other contractor. I suggested that he give it all away.

"I don't think I can afford to do that," he wrote back. "It's too risky."

I got in touch with the first guy and asked him if he thought giving up the labor (even though he really wasn't) was too risky.

"You know how long it takes to tie down some tubing?" he said.

"How long?"

"Not long."

So I got in touch with the second guy and suggested that giving up the labor (temporarily) might not be such a risk after all.

"Ahh, I don't know," he said.

I'll bet it won't be long before he quits making the free-PEX offer to his customers. He'll probably go back to taking the path of least resistance and offer the least-expensive systems he can think of.

The first contractor gets his way every time because he's not asking the customer to do anything other than get out of his way. The PEX and the labor are free. This contractor is supremely confident. He knows that he's going to get that job within a year after laying that PEX. For him, the PEX and the labor aren't an expense; they're an investment.

And there's something about a guy who is standing on a floor that's as cold as an ice rink. That guy is miserable and he will always be miserable because there's no tubing in that slab. At this point, he knows that he made a dopey decision, and his wife reminds him of this all winter long. He should have gone for the warm floors. But now it's too late.

And then there's this other guy. Redemption for this guy is just a phone call and a few bucks away. He can have warm floors and a happy wife in just a few days. He is the Prodigal Wethead.

The contractor who offers it for free right from the start wins every time, but it takes confidence to make an offer like that. Confidence. You think like a winner; you become a winner.

I met another guy at a seminar not too long ago. He told me that he does accurate heat-loss calculations on every job that he bids, and that his boilers are usually smaller than what the competitor is bidding. "Radically smaller!" he said.

"So what's the problem?" I asked.

"The customer doesn't believe that I can get the job done with a boiler that's too small," he said.

"Is it too small?"

"No," he said. "It's accurately sized. I'm positive of that."

"So what's the problem?"

"The homeowner is scared because of what my competitor told him. I don't know how to handle that situation."

"Are you sure of your calculations?" I said

"I'm positive."

"Then put it in writing. Give the homeowner a guarantee that if the boiler you propose doesn't get the job done, you will install, at no charge, the same boiler that your competitor is proposing."

"Ahh, I don't know if I can afford to do that," the contractor said.

"Why not?"

"It's too risky."

"But you're sure of your number, right?"

"Yeah, I am."

"So what's the problem?"

"My competitor is pushing the bigger boiler. Maybe I'm missing something."

Fascinating, isn't it?