Home Improvement Articles

Why "Free Estimates" Are Not Really "Free"
Monday, January 18, 2021

Why are "Free Estimates" never really free and how are they driving up costs for paying clients?
The excerpt below from a Facebook post made by PragerU explains this issue in a great way.
You can view the original post here.
"I would like to tell you a true story, told to me by people who run a large camera store in the Los Angeles area.
One day, a woman walked in and said she was looking to buy a camera. She asked one of the salesmen to show her various cameras. And then she spent about half an hour with the man figuring out which camera she really liked.
Finally, after deciding, she asked the man if he might give her the name of a website where she could buy that camera at a cheaper price.
Now, I hope that you realize something is very wrong here! But can you identify exactly what that is? Take a moment. Here's what was wrong: That woman stole that man's time and that store's resources. And she did so deliberately. In fact, had she taken money from the man's pocket or from the store's cash register, it would have been no different.
Why? Because this woman went into the store knowing in advance that she was not going to buy a camera at the store, but on the internet. She didn't go to the store thinking she might buy a camera there. She went into the store solely in order to use the store's building and inventory, which cost money to provide, and the expertise of a salesman, in order to choose what camera she will buy on the internet cheaper.
What this woman did was wrong -- yet people do it all the time. In fact, what she did violates a law found in a book called the Talmud. The Talmud is the second holiest book of the Jewish religion, after the Bible itself. And it contains a law that changed my life when I first learned about it: "If you enter a store, you are not allowed to ask the storekeeper the price of an item if you know in advance that you won't buy it." Now, let me make this clear. If you don't know whether or not you'll buy an item at any given store, of course you can ask the price. You can comparison shop. And if there's a chance that you will buy it at that store, you can legitimately take the time of the storekeeper to figure out what you want. But not if you know in advance that you won't buy it there. Then you're just taking up the store's time and resources, and that's wrong.
The power of this law to change a life is quite remarkable. First of all, it says to you that you, the consumer, have obligations, not just rights. We always hear about consumer rights. But what about consumer obligations? In our time, we are preoccupied with rights. Which is too bad, because in order to make a better society, people have to think of their obligations as much as they think about their rights. When I walk into a store, I have moral obligations as a consumer, and one of them is not to ask the price of an item -- or how it works, or how it compares to competing items -- if I know in advance that I won't buy it there.
I gave the camera store example. But this happens in all types of stores. People who manage department stores tell me that there are women who come in and "buy" a dress solely in order to wear it for an event on a Friday or Saturday night, and then come back on Sunday or Monday, saying that they didn't like the dress and asking for a refund. That is a form of stealing, not to mention deception.
And the storekeeper law doesn't apply only to stores. I once talked about this law in a speech to a group of singles. Afterward, a woman stood up and asked: "Does this apply to a man when dating?" This was a brilliant question. She was asking: Can a man tell a woman that he is "in love" with her when he knows that it's not her love he wants? That's another example of how this law applies to so much of life -- it's wrong to fool people into giving you their time or their expertise, or, for that matter, their body.
I'm Dennis Prager."
So that brings us to our main point. Why are "Free Estimates" never really free and how are they driving up costs for paying clients? Simply put, due to a loss of time and resources.

(Question) Have you always charged for estimates?

(Answer) No. There was a time, early in our business, where Tracey and I gave our time away for free, doing estimates at no charge, in order to help establish our business in the community and build relationships. As we grew, and added employees (and the associated payroll, taxes, insurance, & HR expenses that accompany hiring employees and subcontractors) the hard costs of "free estimates" had to be built into the job costs. As we have evaluated the number of proposals and quotes we have invested time to prepare against the work we were hired to do, we found that our loyal customers who hired us repeatedly for work were paying more than their fair share of expenses to cover the cost of all the "free" estimates we were providing to their neighbors who were merely exploring the cost an idea they saw on HGTV, or who wanted to use our number to negotiate with another party.

(Question) What do you mean?

(Answer) Take this example... If we provide 10 estimates/proposals/quotes... and we spend 1-hour driving to/from and visiting with each family, and 2 hours researching material costs, suppliers, writing up the proposal, quote, and contract... that's 30 hours of time. Our track record is that we get hired for 5 to 7 of those jobs... but there are 3 to 5 jobs that we are not hired for which is 9 to 15 hours of payroll expenses which has to be factored in and passed along to clients who do hire us. And as the jobs get larger, a proper quote can take 4 to 8 hours of time in the office. But what about that contractor who only wins 3 of every 10 jobs they bid? Ouch! Free estimates can get expensive quickly and it's their loyal customers who have to foot the bill for those "free" estimates.
We felt this was unfair to our loyal customers who truly appreciate the OUTSTANDING Customer Service Experience we provide.... so in order to keep our prices in line with industry standards given the experience and skill set of our team, and ensure that our loyal customers are not paying us to give free estimates to those homeowners who are not committed to their projects, COPE Construction and Renovation charges a modest job estimation/quoting/proposal preparation fee.

(Question) What's the benefit to me?

(Answer) Here's another way to think about it... Who wants to wait around all day for a contractor to show up to give a free estimate, only to find out that they can't make it after all.... because a paying customer came first? What is YOUR time worth? Free Estimates can quickly become very expensive.
Another contractor explained it well in his blog post...
  "I think a comparison is necessary in order to put the “free estimate” in the proper context. Let's say you aren't feeling well, you've had some digestive issues ranging from an upset stomach to heartburn to nausea. You can't keep it under control no matter what over-the-counter drug you take, and you've tried them all. You're like many of us, you avoid the doctor at all costs but you decided to cave in and make an appointment. So you go to the doctor's office and you fill out the paperwork because this is a gastrointestinal specialist and you're a new patient. You get called into the doctor's office and the nurse takes your vital signs and asks you what ails you. You let her know about your stomach woes, but you also tell her that because there are other gastrointestinal specialists in the area that you'd like the doctor to check you out and give a free estimate on what he or she thinks the problems are with your gut. You add that “times are tough” and you're just looking for the best price to patch things up. How long do you think it would be before you were escorted out of the doctor's office?"
Warren Buffet's number one rule in business is, "Don't lose money." And his second rule is business is, "never forget rule number one." If we just eat it on the estimates or pass it along to our paying clients, we are less equipped to care for our employees and their families. If a company wants to take care of their customers, then they should take GREAT care of their employees because the employees are the ones who take care of your customers. We provide a top-notch Customer Service Experience in-part because we take good care of our employees. If your boss asked you to work an extra 3 hours every night, without pay, to help bring new business into the company, you'd probably laugh at them. I'm sure our staff would respond to Tracey and me the same way, and current labor laws prohibit this... So someone has to pay for the expenses related to the time involved in researching and composing a detailed proposal. Doesn't it make sense that it should be paid for by the customer requesting the job today, rather than passing that cost on to an unsuspecting customer who will hire us tomorrow?
With that in mind, we do offer free virtual ballparks. You can learn more about that in step 5 of our process.
With over 150 reviews on our Facebook page Google Maps and countless photo albums and youtube videos detailing jobs month-by-month spanning several years... you can contact us with confidence that we are committed to providing an excellent Customer Service Experience and that we will complete your project in a professional manner. We look forward to serving your family with all your home repair, improvement, and new construction needs.
We are a registered and Insured PA Home Improvement Contractor with Registration number PA88078, verifiable here. - Certificate of Insurance available upon request, typically within 2 business days.
--Drew & Tracey Cope--
COPE Construction and Renovatio