How much is a Sold Job worth to a Roofing Contractor?

I am thinking about starting a roofing leads generation business. I would canvass homes, talk to home owners and secure high probability leads. I would then give this list of leads for free to 3 quality roofing contractors. I would only get paid a percentage if a job is sold.

Question: What do you think is a reasonable compensation % for a sold job ? 5% ?, 10%?

More questions
What is your average materials cost percentage ?
What is your average direct labour cost percentage ?
How much is your average residential job sale ?

Thanks

I am in London Ontario if anybody needs help securing leads contact me.

Normally when canvassing the canvasser does the selling. For a lead like that and they do not have a high ratio of turn over unless you are very good at sales, canvassing is not easy. I would rethink you idea due to what the lead is really worth vs what it will bring. Typically a canvassed lead that works is work 50 to 100 bucks not 10% of contract price, thats what the salesmens job is. Service majic is like that to a point and i have heard many many stories about that.

Well I would be interested in jobs in indiana and you would to have signed contract and I would give you 5% of the job if I had a signed contract. But arent in indiana so doesnt help.

I really don’t understand what your saying. I do all the legwork, I find great leads and If a sale is made I only get $50-$100?

From what I understand service magic charges $40 per lead. Let’s say a contractor buys 10 leads ($400) and closes 1 job at $5000. The net result is the contractor just paid out 8% (400/5000) of the job to service magic.

I wouldn’t have a signed contract. If I did I would ask a lot more than 5%. What I would bring to you is say 5 quality leads (all for FREE) which you would be expected to sell and close. So let’s say you sell 1 of those leads for $5000. I would expect to get paid between $250-$500 commission.

How many servicemagic leads does it takes to make 1 sale ?
How many qualitysmith leads does it takes to make 1 sale ?

good luck with all that. I think you pay at service majic 40 or so dollars for a lead. There is not a single contractor i know of that will pay more than 100 bucks finders fee. I think you might want to find a different idea. No offence.

Let me ask you this question.

How many sales do you get on average for every 10 leads you purchase from service magic ? 10?

Never used them due to many bad stories. Hey if you think you can make 10% for a lead go ahead but it does not work in this business like that. Things are a bit more competitive for 10% for a lead. I have heard of canvassing groups that get 3% of total gross price but even that is high in my eyes. In almost every roofing company the salesman get 10%. Most leads that are produced cost around 200 bucks a pop. Good or no good and thats the way it is. My question is why dont you canvass and sell for a company and make the full commission. I have been in this business long enough to know there is no way you will get 10% and not even 5% of a contract for just the lead, it sounds way to high. Most roofs average aroun 5500. and you want 550 for the lead i think you should rethink what you are getting into. It will never happen.

Well if I have to close the lead and get the contract signed why am I paying the commission thats the whole point of having a salesperson to pay the commission to.

Im not trying to burst your bubble or anything like that, i am just trying to make you understand that it is not a realistic thing to happen. And with the price you want and no solid proof that the lead is going to buy it think you will be very hard to sell anyone for the prices you want. Mayber 1 or 2 % but highly doubt anymore than that. My best suggestion find a company and canvass for them and sell those leads you hustle up. As far as selling them to a company i think it is a waste of your time. I have done canvassing myself and i know what the going rates are for such leads and 10% or even 5% is not even close to what they want.

Well its not that I don’t want to pay anyone what there worth cuz I pay my laborers well based on job knowledge. But with insurance and all the epenses out there its impossible to give someone 550 dollars for a lead thats not even a contract and you said you wanted more if it was a contract so ur telling me on a 23 sq job where you got me a contract ok lets say the job is 5000. subtract dumpster and material I am alread at about 2900. ok subtract my labor now I have 1600 hudred dollars left after labor is paid out. Now insurance and permits hasnt even been subtracted. Now you want at least 550 I still have to sell the customer get them to sign with me set up the dumpster material and job. 550 just isnt worth the money. Bottom line you are giving me the same kind of leads the local paper would and they are only about a hundred and something a month. I usually get about 15 from them a month

I used to canvass like hell for my company. And I found that the rate of return on the flyers I put out was less than 1/10th of 1 percent. If I remember right for about 6000 flyers I put on doors, I received about 5 calls. So really, it is less than 1/10 ot 1%. Do you have any idea how long it takes to sput out that many flyers on doors?

Actually, there are several companies that will put out flyers for contractors for very cheap. Usually about, $700-800 for 5-10000 flyers. That is pretty cheap.

Well I think 5% is fair. In this world you get what you ask for.

Look at “college pro painting”. Those kids have to give up 15-20% of every job to the franchise company and they have to find their own leads. Yes I know painting and roofing are 2 different fields but the point is some people will pay more if you service/sell them right.

Hey if you can get 5% the more power to you. I just have been in this business long enough to know the max paid i have seen for a lead is around 225 dollars and that was short lived due to the high cost of the lead and the competitivness of the trade. Im just telling you in the real world no saine roofing company will pay you 250 dollars for a lead. It costs too much. If you can find someone willing to pay that well then worship the ground he or she walks on because they will get it sooner or latter. With the lead there is nothing you can really do other than it is a good lead. Like i said before go and work for a company and canvass. You will make more money in the long run.

Qtp, Do you know of a fair way I can set up a salesman to work for me that works straight commission and also canvasses for me.

Everywhere i have worked where canvassing was used had a 10% commission and an hourly wage for the walking around and if im not mistaken it was somewhere in the 10 dollar range. And that is for a sold job. Hey i wish this guy all the luck in the world but i think he is asking way too much for his leads without a proven track record. SKI doesnt service majic give you pre qualified leads for 40 or so bucks? not 250+. My question is what makes your leads worth that large commission for a lead?

My salesman’s start out on a commision basis w/ some paid perks(vehicle, or fuel, or time salary, etc). The biggest thing you must be concerned with is how cheap will a salesman sell a job to make money. Lets face it he needs to make a living also so if business is tough what is he willing to do to make money. A friend of mine owns a fairly large commercial only roofing company. He hired a salesman and paid him 14.00 per hour plus 5% commission. he didn’t set no price restrictions becasue his salesman had been in roofing sales and management for years. the salesman knew what a job had to sell for to be profitable but, since it wasn’t his money he sold a large job for 65% of what it should of sold for to the low bidder. my friend was forced to do the job because the customer had a signed contract. by the time it was over he had a dissatisfied customer and lost money on the job. My point is if you hire a salesman you must put price limitations on how cheap can he sell a job. You must also review each bid before he submits it to the customer or before the customer signs it. Say you set a standard for a certain roof pitch with certain material at say $200.00 a sqaure for example. If the salesaman sells it for $200.00 a square he gets his 10% percent that you agreed to pay him. Lets say he can sell that same job at $225.00 per square and it’s a 20 sqaure job so that an extra $500.00 you made on that job. know you pay him say 15% or 20% of that extra $500 bucks. because that extra 500 is all profit to you because your making money by selling it at 200 a sqaure and he sold it at 225 a square. Know on the flip side lets say that for him to sell that same job he has to sell it for $175.00 a square. That would normally sell for $4000.00, but because of competition, etc your salesman had to sell it for $3500.00 a difference of $500.00 or 88% of the price. That’s a difference of 12% his 10% commission of 3500 is $350.00 bucks but, since he had to sell it @ a discount of 12% you take 12% off of his commission of 350.00 and it ends up being $308.00. Now you can play with the commission numbers used when he under sells or over sells a job. Just remember he can really burn you buy under selling. A good salesman will make sure your profitable to protect his job. Also if your doing residential in a competetive market 10% commission is probably to much. My salesman’s sell commercial flat and metal work. Any residential lead is sold by myself or my vice president. I hope this helps you.

Thanks alot Frank and Service Magic gives you 54 dollars leads since I get to view them first now and I can turn them down if I wish. But I have had 7 leads already and about 5 of them were unsalable so I am not going to use them anymore. I think I am going to run my ad in the local paper that seems to be the only place that is working thus far. I am certified with certainteed and so is my crew. I am going to canvass myself also. This pay per lead idea just isn’t working for me.

ANy well seasoned salesman will never allow such a lowering of price, now i understand when times are rough but isnt this whole idea to make money and out sell the other guy? Now i have been a firm beliver in this is my price and i have rarely dropped price to accomadate a sale. Any good sales guy knows how to defeat the couple hundred dollar difference. Let me explain this, WHen your in the thick of the price when you are over (normally i am rarley am i the middle guy) you have to break the job down to the ridiculious. (Sorry spelling is bad and so is this spell checker) Lets say the customer has bids of 4500, 4800 and you are at 5200. First of i will say if they do not like you it does not matter but going with these prices there is a 700 dollar difference between company a and me. Now that 700 dollars equals 1.92 a day for 1 year, a little higher than a cup of coffee right, ok then lets take that a step further since you told me that you are goign to stay here for about 10 years is that right mr and mrs smith? OK now with a total investment of 19 cents per day for those 10 years, would it make sense to say that your piece of mind is a solid investment? Im leaving parts out, for those who have spoken to me have gotten the whole thing and if anyone else wants the missing parts contact me. We have to rememeber as sales professionals we are selling an investment that will protect what they have purchased for the next 20 or so years and we need to sell it as such not selling shingles we are sellling piece of mind nothing more nothing less.

I agree with you on the sales boundrys Frank. The sales person should know tho where he or she is at beofre opening your mouth. And for the sake of agruement please do not put the price on the contract when you are in your truck. I pull my contracts out when i first sit down no price on the contract just everything else is filled out. WHen you are going to let them know the price the first to talk is the loser. LEts say the price is 8200 dollars tell them and shut up. Let them talk first because then you have the ability to not backup and go after the sale. ANd i hope all that are selling are ask for the sale more than 1 time and differently with different closes. If anyone has any questions please drop me an email and i will give you my number andwell we can chat about how i can help you be more productive with your sales. Also if you are worried about long distance you can go and buy a headset from best buy and get skype and talk for free long distance.

In closing pre-qualifing the customer before you go out is really the only way to get information that is helpful in the sales meeting. Also you can remove the dead leads buy asking a few questions, oh yea almost forgot if you get a call on monday no matter how dead you are do not look desperate and run that lead on monday. Run it on thursday because with the questions i ask i get the customer to basically 90% of the time tell me how many people he or she has called.

Hope this helps. Kevin

Assuming you actually MAKE the sale and don’t just send a lead, typical salesman cut can be as high as 30%. If you are just sending leads (high quality or not) you will have a hard time getting anyone to agree to a percentage at all.