Things The Big National Repair Companies Don't Want You To Know!

The Foundation Repair Industry is full of fast talkers, and people who are REALLY good at making you like them and convince you to sign really big contracts for small amounts of work.  BUT...there are plenty of good honest contractors out there also.  So how can you tell the difference between the good guys, and the vultures?  There are some telling signs.  Here are some of them.

Price List vs Par Selling

Did you ever wonder how foundation repair salespeople come up with their prices?  If you are like most people, you probably never put much thought into it.  Who would?  Obviously sales people are given a price list from which to calculate price estimates for prospective customers, right?  Well in most cases, that is not true.  Unfortunately in our industry, the predominant way of pricing a job is by looking at the homeowner and gauging how much a salesmen can get from them.  Sounds crazy, but it’s true.  It’s called PAR selling.  Here’s how it works.   

A business owner or sales manager will set a minimum price, called PAR.  For illustration, let’s say par is $10,000 for a 100 foot basement.  If the salesperson sells the job for $10,000, they will get 10% in commission.  BUT…if the salesperson sells the same exact job for $12,000, then they’ll get 10% of the PAR amount, and then 50% of anything over par!  So by charging you 20% over par, they’ve doubled their commission!  Pretty powerful motivation to over charge, huh?    The good news is that there are more and more companies out there who are choosing a more honest approach to pricing their jobs by developing price lists for their salespeople to use.  Well are still the minority, but we are a growing portion of the market.  As awareness grows, and more and more consumers ask to see a price list, this proportion will grow - to the benefit of all homeowners!

The Drop...

The DROP goes hand in hand with PAR selling.  The DROP happens when a salesperson gives you his first number.  After waiting a bit and seeing that you aren’t going to bite on that number, he’ll come up with an excuse to dramatically lower the price.  These DROPs always come with a convincing sounding story.  Unfortunately they are all made up.  Some common ones are: 

1) We just finished a commercial job around the corner from you and have some leftover materials we can reuse on your job.  If you sign up TONIGHT, we can lower the price and get you scheduled right away.

2) If we can use your house as a Before and After for marketing purposes, we can lower the price if you sign up tonight.  But we only need one house for this, so by tomorrow we’ll likely have someone else already signed up for it.

3) pretends to call his manager, but is actually talking to no one.  Comes back in and says:  I told my manager you were really good people and need this work done bad….he said we are a little shy of our monthly goal, so if you sign up tonight we can offer you $xxxx.

There are literally thousands of variations of these DROP stories, but one thing remains constant among all of them.  NONE OF THEM ARE TRUE.  They are all made up to distract you from the fact that 10 minutes ago they were asking for an insane amount of money, and now they are willing to do the same job for far less. 

1 shot close commission structure

Have you ever had a salesperson come to your home, and it feels like they are just dragging things out FOREVER and will NEVER leave?  Well there's a reason for that.  Two actually.   1) He knows that the longer he stays in your home, the more worn down you will get, and the more likely he can talk his way into your signing a contract that night.   2) If he doesn't leave your house with a signed contract and deposit check, HE WILL NOT GET PAID THE COMMISSION.  Even if you call up the next day to sign up with his company, he will not get paid the commission.  This is how large national franchise companies are structured.  It motivates the salesperson to do whatever it takes to close a deal on the spot.  It's called a 1 shot close model.  This is how a 90 minute consultation turns into a 3 hour marathon battle of wills. 

Lifetime Warranties

Just like all Foundation Repair companies aren't the same, neither are their warranties.  Even the term "LIFETIME WARRANTY" doesn't mean the same thing, depending which company it is coming from.    For most of the large national companies, a 'lifetime' warranty means for as long as you own the home.  The next homeowner is out of luck.  Some companies will allow a one time transfer of the warranty to the next homeowner.  Other companies charge a fee to transfer the warranty.  But a company who truly believes in their work will offer a 'LIFETIME OF THE STRUCTURE" warranty.  Doesn't matter who owns the house, or how many times ownership changes hands.  No fees, no forms, no red tape or legal hoops to jump through.  If we did the work, it's covered.   Now, to complicated it even further...not all work performed by a foundation repair company is covered under any lifetime warranty, no matter how they define lifetime.  Pumps are mechanical, and will fail eventually.  Those are typically not covered under a lifetime warranty.  Most exterior drainage and repair options are not covered under a lifetime warranty.  (Why?  Because soil is very dynamic and it moves and changes over time.  Introducing elements to any drainage system or repair that could erode, deteriorate, or block work done before.  Therefore most exterior repairs come with a 5 or 10 year warranty.)

Effective Solutions vs Sellable Solutions

I have been on countless appointments where a homeowner told me that multiple competitors recommended they get a French Drain, when in fact their problem required a different solution.  So why would a company recommend something that wouldn't effectively solve the problem?   The answer is that it is easy to train an inexperienced salesperson how to measure and price a French Drain.  It is much more difficult to trains a salesperson how to accurately diagnose the true source of the water, and how to offer different solutions depending on the source.  This takes time, and experience to learn.  The big companies have massive turnover in their sales teams due to the high pressure they are under to perform.  This  means they have to train large numbers of salespeople every year.  So they stick to what is easiest and quickest to teach.