Something For Nothing

Tmac · Oct 4, 2013

So, I don't know how it is in other industries, but landowners are CONSTANTLY trying to get something for nothing. It's borderline ridiculous. People wouldn't go into a grocery store and ask for free milk or take their car to the mechanic and ask for free labor, but I get hit up almost every day for it.

In an effort to get some advice and response, I'm going to share a conversation that happened today. Is there anything I can do to turn the tide on this?

Me_sl said:
Hey Landowner X,

Our forester can come take a look on Monday or Tuesday and do the field work (Oct 7-8). You will have the report in your hands by Tuesday (Oct 15).

If you want to get the timber cut right away, let me know the closing date of the tract and we can work with loggers that are already in the area. This will work out to your advantage, since it's generally more difficult (aka, hurts prices) to get logging companies to visit smaller tracts.

We'll work with you and meet the needs of your situation to make sure you get the best price for your timber.

Also, let me know the easiest way to reach you over the phone. One of our foresters will give you a call and discuss everything in more detail and answer any questions you might have.

Landowner X_sl said:
Perfect. Please advise any costs prior to work commencing.

Looks like I close next Friday. No rush necessary on the timber cut, I can work with their schedule.

Me_sl said:
Hey Will,

The charge for a forester coming out there and the report is $350.

Let me know if you want to go ahead and we will get started.

Landowner X_sl said:
Ok. Let's wait until after closing then. I'm open to a ballpark figure if you want to provide. My surveyor also has local contacts that I'm investigating.

Me_sl said:
It's our policy not to give any advice on timber value without putting boots on the ground.

I'm sure there are folks out there who do it, however, we feel it would do our landowners a disservice. I can definitely understand your prerogative though.

I hope you find the help you're looking for!

This happens all the freaking time.

Cad · Oct 4, 2013

So you want them to pay you to come and give an estimate on a job? A job that you'll make money on? Sounds to me like you just want to shift the risk of the transaction to the landowner, and he wants you to assume the risk. If there are others that do give free estimates, you're the one missing out...

OneofOne · Oct 4, 2013

What Cad said. In the same way the Culligan man came out to test our water for free and give us figures for different options, and in the same way we've been collecting free bids on our roof, I'd expect you to offer a free estimate on your work. Now, that may not be standard in your business, I have zero knowledge of that, but in general, yeah, I'd expect estimates and bids to be free.

Tmac · Oct 4, 2013

Cad_sl said:
So you want them to pay you to come and give an estimate on a job? A job that you'll make money on? Sounds to me like you just want to shift the risk of the transaction to the landowner, and he wants you to assume the risk. If there are others that do give free estimates, you're the one missing out...

Apparently I didn't explain the situation very well. He wants his timber cruised, aka appraised, which we would charge $350 for.

He's closing on the property Friday of this week and then would "consider" selling his timber, but he doesn't have enough timber on his property to justify a logging crew making a special trip.

The two services are unrelated, but we can do both.

Tmac · Oct 4, 2013

OneofOne_sl said:
What Cad said. In the same way the Culligan man came out to test our water for free and give us figures for different options, and in the same way we've been collecting free bids on our roof, I'd expect you to offer a free estimate on your work. Now, that may not be standard in your business, I have zero knowledge of that, but in general, yeah, I'd expect estimates and bids to be free.

Maybe, but he also mentioned talking to people in his area and we'd be paying a forester to go out there for $225.

This guarantees us nothing, he has zero commitment to us, so if we did the work and he decided, for whatever reason not go with us (which happens often), we'd be out $225 as a favor to someone I've never met.

Multiply this times ten landowners and we're out $2250, with zero work to show for it.

OneofOne · Oct 4, 2013

Tmac47_sl said:
Maybe, but he also mentioned talking to people in his area and we'd be paying a forester to go out there for $225.

This guarantees us nothing, he has zero commitment to us, so if we did the work and he decided, for whatever reason not go with us (which happens often), we'd be out $225 as a favor to someone I've never met.

Multiply this times ten landowners and we're out $2250, with zero work to show for it.

Which, not to beat a dead horse, is how most of the rest of the world works. We give free quotes on work we do, Lyrical pays his estimators a wage to go out and give free estimates, and the same with the examples I gave above. Again, I know jack about your industry, so I'm simply using others as examples. The only thing that I could see getting me to agree with you is, is your valuation writeup worth something to timber cutters IE can you take that to a logging company and negotiate off that, or is it really just an internal estimate useful for a handful of companies you work with? Or worse just something to get another company interested, but they'd still have to come take a look themselves anyway?

Eomer · Oct 4, 2013

Tmac47_sl said:
Maybe, but he also mentioned talking to people in his area and we'd be paying a forester to go out there for $225.

This guarantees us nothing, he has zero commitment to us, so if we did the work and he decided, for whatever reason not go with us (which happens often), we'd be out $225 as a favor to someone I've never met.

Multiply this times ten landowners and we're out $2250, with zero work to show for it.

You'd really hate construction work, then.

Tmac · Oct 4, 2013

OneofOne_sl said:
Which, not to beat a dead horse, is how most of the rest of the world works. We give free quotes on work we do, Lyrical pays his estimators a wage to go out and give free estimates, and the same with the examples I gave above. Again, I know jack about your industry, so I'm simply using others as examples. The only thing that I could see getting me to agree with you is, is your valuation writeup worth something to timber cutters IE can you take that to a logging company and negotiate off that, or is it really just an internal estimate useful for a handful of companies you work with? Or worse just something to get another company interested, but they'd still have to come take a look themselves anyway?

A timber cruise is just like a house appraisal. It lets you know exactly how much value you have in your land that's timber. So, yes, the timber cruise is something that is very necessary when talking to loggers (timber cutters). It's pretty much the industry standard.

Logging companies will send out their own appraiser to see how much they're going to bid. So, if you don't have your own independent appraisal done, they can undercut you (and will), so that there's the potential to lose thousands of dollars if you don't have a good cruise done.

OneofOne · Oct 4, 2013

So if this timber cruise is a one and done document, I would say you're selling it wrong. If your clients will need to get this done regardless of who they go with, I'd make that known.

However, if we're crossing wires here, and each logging company requires its own timber cruise, provided by their own foresters, then you are SOL, because that document is only useful to you and your associates.

Gadrel_sl · Oct 4, 2013

Real estate drives people batshit crazy. They overestimate the value of their property, underestimate the costs, and make emotionally charged, illogical decisions about their land. Reasoning with land owners is like reasoning with a woman; it doesn't happen.

Tmac · Oct 4, 2013

OneofOne_sl said:
So if this timber cruise is a one and done document, I would say you're selling it wrong. If your clients will need to get this done regardless of who they go with, I'd make that known.

However, if we're crossing wires here, and each logging company requires its own timber cruise, provided by their own foresters, then you are SOL, because that document is only useful to you and your associates.

The only reason logging companies cruise the timber is so they'll know what's out there. They ALWAYS low-ball if a landowner is selling their own timber without a consulting forester.

We've gotten up to a $50,000 increase in sales for landowners who were trying to sale timber on their own before they decided to have us represent them.

So, in every case, the landowner needs to have his own cruise done by an independent representative. I can link you to 5 different government sources that suggest the same advice:http://www.gatrees.org/resources/pub...YourTimber.pdf

OneofOne · Oct 4, 2013

Ah finally, you are explaining and selling! Now do it to your potential clients =P

Tmac · Oct 4, 2013

OneofOne_sl said:
Ah finally, you are explaining and selling! Now do it to your potential clients =P

So...come right out and say what I just said in an email?

OneofOne · Oct 4, 2013

Well, I'd phrase it a bit differently, but yes, you are selling important information that landowners should have - the value of their timber. From a source working directly for them and in their best interests, as opposed to the buyers who will always low-ball.

Shonuff · Oct 4, 2013

OneofOne_sl said:
Which, not to beat a dead horse, is how most of the rest of the world works. We give free quotes on work we do, Lyrical pays his estimators a wage to go out and give free estimates, and the same with the examples I gave above. Again, I know jack about your industry, so I'm simply using others as examples.

I know it's a different industry, but we closed 25/47 customers this week, and raised $25,189 in service fees by doing free estimates. As the old marketing axiom goes, if you find a way to help your customers, and fill a consultancy role, they are more likely to sign with you. I guess there are some companies in my industry that charge for bids, but they don't get anywhere near the amount of calls or do as much business as we do. I just closed a $58k sale that I had to pay an Estimator to spend four days on. They kept changing the requirements the bid. But for us, it always pays in the long run. I don't believe I have a competitor that is larger than me in my area now. We advertise "FREE ESTIMATES" on TV, yellow pages and the Internet. It's a selling point for us. If this won't work for you, you'll need to sell the value in your product, whether it's on the phone, email, or on your website. That means getting your people preaching from the same hymnal.

Tmac · Oct 4, 2013

Lyrical_sl said:
I know it's a different industry, but we closed 25/47 customers this week, and raised $25,189 in service fees by doing free estimates. As the old marketing axiom goes, if you find a way to help your customers, and fill a consultancy role, they are more likely to sign with you. I guess there are some companies in my industry that charge for bids, but they don't get anywhere near the amount of calls or do as much business as we do. I just closed a $58k sale that I had to pay an Estimator to spend four days on. They kept changing the requirements the bid. But for us, it always pays in the long run. I don't believe I have a competitor that is larger than me in my area now. We advertise "FREE ESTIMATES" on TV, yellow pages and the Internet. It's a selling point for us. If this won't work for you, you'll need to sell the value in your product, whether it's on the phone, email, or on your website. That means getting your people preaching from the same hymnal.

It's different in the sense that everyone has trees in their yard, but not everyone owns timberland.

The biggest problem we run into is that landowners generally harvest timber 2-3 times in their LIFETIME, so they're very segregated from the industry. Also, no one markets or educates landowners on the process in any way that's clear.

It's very convoluted and, honestly, I think timber buyers like it that way. It gives them an edge on their supplier (landowners).

So, whereas you might have a market of 75,000 people. For me to get the same market, I'm spread across an entire state. Meaning, that to do a bid 4 hours away is a lot less cost effective, especially if you're not guaranteed getting anything for it.

OneofOne · Oct 4, 2013

Tmac47_sl said:
Also, no one markets or educates landowners on the process in any way that's clear.

This is YOUR job now. You have to explain how things work and why purchasing your services will end up saving them money - more than the cost of your services. Do you have a link to your website? Can PM if you want /shrug

Tmac · Oct 4, 2013

OneofOne_sl said:
This is YOUR job now. You have to explain how things work and why purchasing your services will end up saving them money - more than the cost of your services. Do you have a link to your website? Can PM if you want /shrug

I recognize that and I am leapyears beyond the rest of the industry, which is part of the problem. I haven't realized my "hook" as far as the marketing goes. Which is why I brought it up here.

The problem:
Landowners need (government/university recommended) a registered consulting forester to assist them in the marketing and selling of their timber. Otherwise, they're dealing with people who do this day-in and day-out and don't have a goldfish's chance in a shark tank.

Currently I'm pursuing a sort of "reputable" campaign, but the problem I'm finding is that people don't even see the need for a forester, so the fact that we're reputable means nothing haha.

For example, we can make a single phone call and get people 20% more for their timber if they're selling it on their own. We're talking +$20,000 on a $100,000 sale. There areforestry organizationsthat look down on advertising this as a guarantee, because they want to keep the market fair for all foresters, but what they fail to realize is that most people are trying to sale timber on their own and don't understand the risk they're taking.

How do I market this without alienating the timber buyers/loggers we work with on a regular basis and describe the need to use us?

Corndog · Oct 5, 2013

Here's the problem. You're selling someone a service they don't need. Lets say I just inherited a ton of land from a family death. I want to farm them logs for money. I want to know how much you'll give me for my logs. I don't need to know how much my logs are worth. I want to know how much money you'll give me for my logs.

So now you want to charge me $350 to tell me how much my logs are worth? My friends tell me people show up on their door steps offering them money for their logs all the time. Why should I pay someone when people are already doing it for free?

Appraisal on a house is much different than logs. You get your house appraised because you have too. To sell it, or to refinance etc. Appraisal of logs is completely optional. You could totally call a company and say, I have a ton of trees. I want you to cut them down and give me money for them. It would start next week. Appraisal is optional. Don't get me wrong it may well be very smart to get them appraised first but you're selling an optional service.

Appraising the land is what YOU need to know, not what the land owner needs to know. He needs to know how much MONEY he gets for those logs. He doesn't care that the logs appraise for 500k. When the only local company will only offer him $375k. How does your $350 fee to appraise look then? You're much better off building the appraisal fees into your prices.

If you land 1 out of 10 appraisals. You just subtract $2250 from the price you'd pay the land owners. It costs you $225 to send a guy out there. Don't tell them what it appraises for. Just tell them what you'll buy it for.

You don't have to pay to have your jewelry appraised at a pawn shop before you sell it. You just sell it. You'd walk down the street to the next pawn shop if they said well it'll be $20 for me to tell you what this thing is worth.

I'm sure in your industry you've got a lot of tire kickers. They want to know how much their timber is worth. If it's worth more than they think it should be they'll sell. Or if they are hard up for the money. Just build it in.

In my line of work everyone wants to return a fish they just killed. Because Petsmart and Petco will guarantee a fish for up to 30 days. Every time it's their fault they killed the fish. I don't guarantee my fish and express that in the store. I tell them if you want a guarantee I'd have to raise the prices by 30% like every other store and YOU can pay for the mistakes of the guy who kills 40 fish every week and we replace them. Or YOU can take good care of this fish and save extra money. By buying from us you agree that we are selling healthy fish.

Why not write an email that says we need to send a forester out to survey your land. This will cost us $350. We will then make a bid for timber. If you choose to work with us then we'll take that off the final purchase price. If you choose not to go with us for $350 we can have the documented survey mailed to you to have as financial records to use in the future.

Tmac · Oct 5, 2013

Corndog_sl said:
Appraising the land is what YOU need to know, not what the land owner needs to know. He needs to know how much MONEY he gets for those logs. He doesn't care that the logs appraise for 500k. When the only local company will only offer him $375k. How does your $350 fee to appraise look then? You're much better off building the appraisal fees into your prices.

This happens pretty often actually. We always pull in bids from multiple buyers and if their bid doesn't meet the mark, we wait a couple of weeks or sometimes a couple of months to get what we want. When you're talking about $500k, what's waiting a month? Also, why wouldn't you pay someone 8% commission to make sure you get all of the timber value on your land? You're plus $80k...

You'd be surprised at how hard landowners will hold on to the appraisal once they have it. Ultimately, timber's only worth what someone else will buy it for, so sometimes landowner shoot themselves in the foot and don't listen to us if we tell them they should take a bid. I've heard of people losing $50k because they're trying to play hardball in an industry they don't understand.

Ultimately, when people take our advice, they make a lot more money.

Corndog_sl said:
If you land 1 out of 10 appraisals. You just subtract $2250 from the price you'd pay the land owners. It costs you $225 to send a guy out there. Don't tell them what it appraises for. Just tell them what you'll buy it for.

We do this sometimes. However, when my website advertises consulting services, it's a little disingenuous to buy it from them instead of finding someone to buy it from them. So, when people send me emails through my site, I try to sale them on the consulting.

Corndog_sl said:
Why not write an email that says we need to send a forester out to survey your land. This will cost us $350. We will then make a bid for timber. If you choose to work with us then we'll take that off the final purchase price. If you choose not to go with us for $350 we can have the documented survey mailed to you to have as financial records to use in the future.

Most landowners are old. Finding their telephone number, much less an email address, is already pretty difficult. I have sales people that call landowners and talk to them about their land. The majority of people we talk to, don't have anyone representing them and don't really recognize the value in managing their timber (e.g. doing things that bring an additional 60%+ to the value when you cut it).

We don't specialize in $350 timber cruises.We sale timber for people and take a commission. Every now and then we'll buy it ourselves.

However, I am considering sending the forester down there regardless and putting an offer on the timber...

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