As the digital age continues to expand, more and more homeowners are using the Internet to research remodeling projects and potential contractors. Now it’s no secret that business isn’t exactly booming at present, yet many homeowners want to remodel. Homes still need repair and while the slumped housing market is discouraging selling, it is encouraging home improvement.

So we have a market that encourages remodeling, however hesitant consumers are to spend, and an Internet that is fast becoming a home improvement tool in its own right. This combination has spawned a major rise in online referral services. These companies, such as CalFinder, offer homeowners an online resource on a smorgasbord of home improvement topics and an easy-to-use link to contractors in a given area. You, the contractor, pay to have these homeowners connected to your company, in the form of their contact information.

Working with these Internet leads can be a bit tricky, requiring more work on your part than traditional leads. As Dave Lupberger pointed out in a related post for Qualified Remodeler, an Internet lead will likely fall short, in terms of information provided, when compared with traditional referrals. Unless you work with a service like CalFinder that pre-qualifies every lead, you generally won’t have a personal view of the homeowner, you won’t know how serious they are, you won’t know their budget situation, and you won’t know when they want to start.

What you will have is their contact information, which is something to work with. Homeowners are generally serious about wanting to remodel, but they may be very hesitant, given today’s economy, to jump right in. Therefore Internet leads may require a little work on your part, some more aggressive marketing. Lupberger put it very nicely when he stressed the importance of developing “a good marketing pipeline.” (more…)

I recently read this blog about soliciting bids in the midst of our current “housing bubble.” The article advised homeowners against low-balling when examining contractors’ bids for their work. It reminded me of where I was working when the housing boom finally started to go flat. At the time I was working in southern Oregon. It was a hotbed for new construction during the boom as retirees and newlyweds flooded the area, known worldwide for its landscape and moderate climate.

The town also flooded with contractors. Anyone with a hammer and a pick-up truck was in the business. But when things started to collapse (last I heard the number of homes on the market was up roughly 1000 percent), many contractors were left holding their hammers. That’s when the undercutting started. Bids dropped like Wile E. Coyote off a cliff.

Suddenly we were losing work, right out from under our noses, because everyone was trying to cut costs. For a time, quality of work gave way to quantity of work, often awarded to the lowest bidder. Not surprising, this only complicated things. Just a few months later we found ourselves being hired to finish work left incomplete by low-balling contractors who were either fired or just disappeared.

The moral of the story here is that underhanded bidding is not only unfair but unhealthy as well. Unhealthy for business, unhealthy for everyone involved. Even in a time of recession, the traditional rules of bidding still apply and contracts are not won, nor is work retained, simply through low bids. (more…)