How to Use AI to Stop Wasting Time on the Wrong Clients (Ep 288)

Modern technology is amazing —but are you using it in a way that helps your business rather than harms it? 🤔

Today, Max shares his five tips on how to use AI in construction! 🔨

Don’t miss these practical insights to stay competitive and build smarter 🔥🏠

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Transcript

SPEAKER_00 0:00

Here are five tips on how I use AI to increase my conversion rate. Enjoy. How old are you going to be before you start to experience life like you want it? I want to tell you right now, whether you like it or not, there is a better way to do business. Hi everyone, welcome to the Business for Builders podcast. My name's Max. I am your host. And today I'm going to chat with you about how I use AI to reset clients' expectations around cost. Okay. I think it's too often that we go out, and I've done this personally, right? So I've ballsed it up more than most. Um, where I go out and I talk to the clients, and what are they interested in? I don't know about you, but for me, clients just want to know what it costs because they think buying our services is like buying a can of coke, as that we're commodities, and we're not. Okay, so I think the reason that you know I enjoy using AI is because it starts to level the playing field for pricing. Okay. So if you're not already using AI to help you get some semblance of understanding around a scope of work and what the contract price or estimated price range might be, then you need to start today. Okay. Now, the flip side of that, and I've been working with AI now for 18 months, and and what the conversation or the email I put out to the team this week was that hey guys, I want to put a tab on our website, and I want to put it either a downloadable document on our social, whereby if someone inquires with us about a second-story edition, a regular edition, a main floor renovation, a two-story renovation, a bathroom renovation, a deck, right? What I want to do as the builder, my company, is I want to put together a downloadable or something where they can cut and paste as it relates to their project. And the reason I want to do that is, and this is what's going to happen, guys. I'm doing a bit of a long intro, but I'm going to get to four points here. It's it's I really want to level the playing field so that you and I don't compete on price. I know that sounds weird, okay, but that's good. Um, because weird sometimes we need that to rattle our cage a little bit to get us thinking. Because we should all be, and I think we see it in the uh commodity world where odds on is if you're gonna go and buy a monster in Australia versus a monster drink, that is, you know, a monster energy drink in Australia versus a monster any drink in the States, in Canada, in the UK, or Europe, you it's all going to be from store to store, it's gonna be very similar pricing. You know why? Because the product is the same. Now, the only X factor is me the builder, you the builder. I coach guys in their 20s, 30s, 40s, 50s, right? And they all come to the table with different levels of experience, okay? So that is always going to remain the X factor, which means you have got to become better. See, I know that when I coach guys in their 20s, if we were both, you would let's say you're sitting there and you're listening, go, Max, well, I'm 24. And I'm like, okay, great, Bill. Not that you'd be called Bill, because I don't think too many 20-year-olds are called Bill. But nonetheless, if you're sitting there thinking, well, I'm in that young, I'm in that younger generation where I'm just starting out, if you go to a homeowner, matter of fact, give you an example. Two days ago, I went to a doctor's office, he wants to remodel his office. And I was chatting with him, like I do, as an operator, as a 53-year-old, a guy that's been in the industry for over 30 years, had a builder's license since 2010. Um, and I went and just did what I do. Now I did ask him, because this is part of my deal. I say, so if you had any other general contractors or builders, look at this. And he said, This is what he said to me. He said, Yeah, I've had one guy in here, a lot younger, you know, or very young, and he didn't ask near as many questions or make um didn't highlight as many of the challenges as what you have. See, AI won't remedy that because that's a human attribute based off the back of experience. So wisdom comes from, you know, experience that you gain over time. Okay. Now, do I think that AI could help you? Hey, when I go to this doctor's office, this clinic, give me an understanding of some questions that I should ask. See, as a 25-year-old today, you can learn and educate yourself faster than what I could. Because when I was 25, Crikey, that was the 90s. That was 10 years before Facebook and YouTube, right? And you know, Google was a little bit, you know, before that. But you know, the what you're trying to do, see, I I guess your competitive advantage comes based on your knowledge and your ability to utilize the tools. Okay, so we're gonna talk about AI and how we reset the client cost expectations, right? So I guess the the first one that we really want to address is is the cost gap. And that's the expectation, okay. Now, I know this that my expectations changed around price because I was sort of still locked in the pre- the pre-COVID era where everything was, you know, was the same for quite a long time. COVID and all of that that went on there, it really destabilized things. Um, I guess they could settle down over the next few years, let's say. Um, but but my expectation around what things cost now is here when in reality they're at here. Now, I'll give you a good example. We've just won a job for just under 300,000 for an interior two-story uh renovation, and my expectation was that should cost between 175 and 200. I shared that with the client. I come back to the office, run all of the data that I now had gathered, including pictures, through AI, and all of a sudden it's telling me that it's really should be more like 250 to 280. Okay, now we just went to contract on that job for about 262 plus GST. Okay, so um, even for me being fairly seasoned in what we do, my expectation around cost was here when in actual fact it was up here. So, what I like about that is I undercooked it, then I had AI give me more of a realistic expectation, which created a gap. Then what I did is I went and did what I do. I used Job Tread project management software and estimating software, I run it through, I did what I do typically as a builder. And when I got all the quotes, so I did about eight walkthroughs with different trades. I had an interior designer working out one of the hardware stores close to our office. And when I combined all of their quotes and all my subtrade quotes, and then our in-house carpentry demo, framing, finishing, etc., and I compiled all that data, we did come into that 264 plus GST or whatever it was. And so I think no longer is it a kind of a, yeah, well, it'd be a nice to have. It's an actual, it's something, it's a tool. It's like literally, you don't go out and build a house now and knock frames up and use in a handsaw. That's madness. We've graduated, we've gone beyond that, we've now embraced the tools, you know, to the point where nobody really needs cords anymore or leads because we're using battery-operated equipment. So, you know, this is the same sort of thing. It's just in the technology world. And so when I go out and compete with you, it's it's it's now we're the same weight class. Really, you know, it's now comes down to your ability to communicate, and that's one that you have to develop over time to be able to build trust and rapport and really empathize with the client, be very client-centric in your approach. Okay, super important. So the cost expectation gap, right? This thing here, the gap, it should be removed as much as possible using AI. Right. So the second thing there is like, all right, how do we intro AI into the conversation? Now, what we find is I've just said you've got to have good communication skills and be able to build rapport and trust. I was only out at a meeting yesterday, and it was for a very small job, quite a small job, around 10 grand, and you could just sense that people's natural reaction is to not trust. So not only do I think that AI is a good tool to remove the gap, but if we introduce AI, what it does potentially is um that's why, you know, for me, putting a website, sorry, putting a another page on our website, putting a download on our social media, that clients go, well, I've got this job. Now, I've got this job that I want to do. I'm gonna go and cut and paste all of that prompt that Max has got on his website. I'm gonna put it into my AI and I'm gonna see what it says. Now, I'm controlling the narrative, and you may not have thought of this, and I'd like to think I'm a little bit of a pioneer because I've not heard anybody talk about prompts for a builder on behalf of the retail client for them to use before they call us up. Right? And so for me, that to me is going to be um a piece of social media that we can roll out that could get a lot of engagement, a lot of interaction. Why? Because some people are sort of gonna say, well, hey, have you seen this builder? He's using AI, he wants us to use AI to help us get a better understanding of what the cost expectation is. Now, if I go out there and they've done that, they're calling me now. It's like another little tripwire. If I say to them, so this is about introducing AI, and it's like, hey, have you did you happen to see the website with the AI prompts? Now, a lot of our target demographic is between 50 and 75. Some of them have real trouble with technology, some don't, not all, but some do. And they're like, A, what's AI? And B, what's a prompt? That's the that's the challenge that I could face. So there's there's gonna be probably a short video explaining how to do it, talking about the four or five big dogs, you know, as far as AI is concerned, and then really work on, you know, um helping them understand. Now, if they're flatly gonna refuse that, then we go back to the old analog side of things, which would kind of suit me because that's where I have a competitive advantage based on my experience and my knowledge and my you know ability to you know transfer the information, okay? Whereas if you've got someone who's pretty savvy, they might dive into that and go and basically grab all the prompts that relate to their project, put it into their AI, and then they call me. And I one of the first questions are going to be as I move forward now, is have you run your project information or details through artificial intelligence? If they say yes to me, I will know fairly confidently that their idea, when then when I when I ask them, hey, what was your eye, what would you come up with as far as price goes? And they tell me that, and I'll say, Well, okay, is that within your financial wherewithal? Yeah, it is. All of a sudden, no longer are we competing on price, and I'm not the bad guy for telling them that their bathroom renovation costs between 25 and 32,000 Canadian. Okay, so I like the idea of this. See, what I like about it is that if you go out there and the we're dealing with the same client, and you're talking to client A, and I'm talking to client A, and we've both got a fairly similar price range, it now comes down to you and me as the builders, as to because a lot of these clients that I deal with, like the client I spoke to yesterday, they said, well, it's not necessarily it's about price, it's do I like the operator? Interesting that they would say that. Okay, so now it's a case of how do you present? So I I roll up in my late model truck, it's got all the Smithian Sons decals on it, it's got the green stripe on it. I rock up like this. I don't look like I've just dropped my bag off to run over and do a meeting. Okay, so I've got a level of professionalism that's up here, and the way that I then talk to them about the process, you know, as far as I'm concerned and how I deal with homeowners and how I lead homeowners, that now becomes something that resonates with them because they're confident that I can lead the way. Okay. So I would like to use AI as an early filter to help me figure out, because I think it's going to reduce the amount of inquiry that I get, or it's going to reduce the amount of tie kickers, time wasters, price checkers type human that will ring me and go, and this lady yesterday was just like, so just give us a quote, just give us a quote. It's like, you know, um, no. And I was actually on her driveway and I actually said to her, and guys, look, let's let me let just pivot for a second. Um, she's like very dismissive. Oh, just give me a quote, give me a quote. And I said to her, I said, Look, I'm going to respectfully withdraw from you know, giving you a quote for your project. I don't think I'm the right guy. I don't think I'm a fit for your project. And that's when Hubby jumped in and said, Look, it's just, it's not all about price. You know, we look at the people that we're dealing with. And so all of a sudden, that was kind of they're very, very one-dimensional homeowners because they just think that all of us builders are the same when we are not. If we were, there wouldn't be so many horror stories on HGTV. Okay, that's the facts. So now it's at a point where they might have had a quote for this, and I've given them a quote for this, and it's not just about price now. And I'll maybe I'll get back to you on how we go with that one. We're gonna send that quote out to them this morning. And here's the funny thing: I send it from JobTread, it shows that the email went out, the email is right, and she's like, I haven't got your email. I guarantee if I grabbed their laptop or their PC, I'd I'd soon find it, it'd be there somewhere. I think number three is when and how to use it, right? When and how. So I've kind of just covered that off real quick. Um, obviously, introducing the idea, probably in the initial call, perhaps, or the early conversation, if they haven't already found it on social or googled a general contractor or builder near me, go on your website and there's a front page, you know, flash up banner or whatever that says use AI to figure out what you know. I know some guys have had calculators on their website, and that was cool. But now that AI's come in, the calculator is actually on your client's cell phone or laptop or whatever. It's right there. What you've got to do is define the scope. Now, for me, seeing this is very, very new, this idea that I've just had, and maybe I'm not the only one, maybe you've had the idea as well, Mozletov. But what I'm gonna do is think about all the different projects. Like if you go to my website and you were to click on the inquiry, the drop down of different types of jobs, I'm gonna pick out the most common kitchens, bathrooms, additions, decks, you know, second story editions, whatever. And I'm gonna run that through AI to be able to create prompts that clients and homeowners can use before they get to me. So in some cases, I might on the first phone call and say, Are you familiar with AI or artificial intelligence? Do you use it? They probably just use it as a search tool, nothing else. Okay, and they'll go, what if, you know, or they might say, Yeah, Max, I've already been on your website and I've I've basically put your prompts through my AI, so I've got a pretty good understanding of what a typical market or industry price for my bathroom, my kitchen, my second story edition would be. It's funny because I've done it on both ends. I've done it with bathrooms and I've done it with major second story editions. And the price points, and this is why it's very critical that you make sure that the prompts are accurate, you know, that you outline that it is a mid-tier finish, not luxury, not entry level, you know, and so the make sure we get the right context or we give the right context to artificial intelligence. And so for me, there's a lot of work that's going to go into that up front so that my clients, when they ring, they you know what I'm actually doing? It's a it is absolutely a filtering tool because if in their mind they think they can renovate their eight foot by five foot bathroom for 12 grand, and then they go and throw my prompt for a bathroom, a four-piece or whatever, into AI, and it comes up as 25 to 30, they may not call me. Some folks might go, well, it's more than I expected, but it's not Max telling me it's 25, it's it's my AI. And they might be that that studious, they'll run it through Perplexity and they'll run it through Grok and they'll run it through Claude, you know, the all that the whole nine yards, right? Um, use it as a tool to align your expectations, align expectations before investing time. So we used to go, we used to use the pre-construction agreement as a filtering tool. People that spend money with me in the design plan and price process, okay, odds on is 90% chance I'll convert them to a deal. Okay. Whereas now we can actually back that up much further, and people can actually use my prompts now. So I'm trying to control the narrative. They can modify to their heart's content, don't care. But I'm going to give them a very good visual example as to what they can run through and and basically put into their AI to help them figure out whether or not their expectation is realistic or whether it's undercooked, or whether it's maybe over. Maybe they've just given themselves away too much wiggle room. And so I like that because now it's not the builders being the bad. Oh Max, this is the classic. Oh Max, you're too expensive. And you know what? In the last two meetings, and there was there was this, I had a conversation with someone a week and a half ago. And the for the first time in my life, uh, my my building life, I've actually let clients know that I specialize in business coaching for builders. And I I was very reserved about that. I thought that was completely irrelevant. But someone prompted me and said, But if I was a homeowner and I knew that you coach builders as well as run a general contracting or a building company, um, that would actually elevate your expertise and professionalism and trustworthiness to a new level. Okay, and I'm not saying rush out and be a business coach, but what I'm getting at is that it's no longer about the price. Because I would say this is the price, perhaps, and someone else who doesn't manage business as well, doesn't know how to price properly, doesn't understand what their break-even point is and how relevant it is, don't doesn't understand what a good net margin that they should be going after. So they don't understand the markup and the margin difference, all of that, right? And then they end up being down on the price, and I look expensive. Whereas because there's so much data being pulled through artificial intelligence, now we get a more of a benchmark that is that is very um, I don't know what the word is, but it's very, it's not biased between Smith and Sons Max and XYZ builder over here, right? Which is good for the guys coming through because they are probably the young guys are probably the ones making the mess based on the pricing model, not understanding what the markup and margin is and how that really affects their bottom line profit, if any. So it's good. I'm saying to you, as my competitor, use AI, not just for you in the back office doing the quotes, but also now as a retail-facing consumer-centric tool to help make sure that when your phone rings, someone has actually got a realistic expectation. So it helps qualify whether the client is realistic and ready to proceed. See, if you've got someone, if you're saying right, bathrooms cost 25 and the client's got, yep, I've got 25. See, now it's just a case of moving the deal forward towards a conclusion or towards a contract. You're not trying to justify your price anymore. Now, would this work on the bigger jobs? Well, I've got some contacts and I'm gonna, you know, this is I'm gonna discuss this more because this is very fresh, and I'm gonna discuss it with them. So, this is the old days where once upon a time you would just price jobs using a square foot rate or a square meter rate. This is kind of just upping that a little bit more. That's very accessible and very reliable to for clients to use. Okay, now I'm not saying to abdicate your responsibility as far as being in good estimator, ladies and gents. I would say that you still need to know your shit. Okay, you need to be able to go into your now uh your build process in your mind and be able to put that into software to be able to come up with a budget for a project. Okay, I'm not saying that it's gonna do all the work. I get guys, you know what's funny? I get some coaching clients and they'll say to me, Max, I just need templates and then I'll be right. And my pushback all the time is if I gave you a template, how do you know if it's wrong or right? See, guys want shortcuts because they're freaking lazy. They don't want to educate, and this is why you might say, you know, I know Max runs this EBA coaching for builders, etc. But at the end of the day, you've got to do the work, you've got to educate yourself, you've got to know. Because most of the time, the understanding and the education that I have, I deploy it in the field on the fly. Because you don't get time to rehearse. You've just got to know what to do when that situation you know presents itself. Okay? Right, so number four is why. Y A I. So educated clients are easier to work with and more decisive. Now, I've said this before very recently, that if you are confused, if the client is confused, their ability to make decisions is going to be hindered. When there is clarity, their ability to be decisive is is is uh is very obvious. They're like, yep, I know what I'm getting, I know how much it's gonna cost, I know how long it's gonna take, let's go forward. Let's go. Now I yeah, so for the most recent deal that I just did this week, um I sat down and presented the Quote, it was about 50 to 60 grand more than we'd spoken about, but she did add some things in. Um, and I think it was 24 hours, and she sent me a text and said we've reviewed the coat. Quote, we want to move forward, guys. I can't tell you how exciting it is to get a text message like that on a Friday afternoon. You know, um, and it's not a big job compared to the one we're finishing, but it's over a quarter of a million dollar reno just for interior of main floor and upper floor. Okay, and it's it's it's really it's that client is very decisive because there was a lot of clarity around the process. Um, so we it's all about reducing the friction. This is why we do it. It reduces the friction and the defensiveness around pricing discussions. See, we get into a debate with homeowners because we start to second guess ourselves because we think, well, maybe I am too expensive. Maybe, maybe I should drop my prices. Now, elite business advisory's mantra is more profit, better lifestyle. More profit, better lifestyle. Most builders that I know don't make enough profit, and therefore their lifestyle sucks. They're not happy with their lifestyle, so they've got no profit, shitty lifestyle. If you want to flip the script on that, you need to hang out with people that can adjust the way that you think. Because our perception is stronger than truth. The way that I perceive things, the way that you perceive things, that is actually your truth, my truth, but it's not actually the truth in most cases. Okay, so what we're doing with AI is we're stepping out of that little conundrum for a second and we're allowing clients to come to their own conclusion. It shifts the conversation from cheap versus expensive to just a straight up informed decision. And ultimately, we are not in the middle of that trying to control the narrative. So we can do our own research, and I've done this. I matter of fact, I did this when I went to that doctor's clinic. I went and put in some basic details. I said, what's an estimated price range on this? So I walked into the clinic and I've, you know, I told him, I said, mate, you're probably going to be six figures. Now, do I, now that I've seen the job and I've done a little bit of a sketch on the on the on our software and figured out that it's probably not going to be a hundred grand? What I've done is I've taken his breath away with a hundred grand, but I've anchored the price at a hundred grand. And then I can come back and say, Well, I've drawn a mud map, I've got the changes introduced, I think I can make the four exam rooms work the way that you want them, the two you've already got plus two, um, and now I'm gonna be somewhere between you know 63 and 80,000. How do you feel about that? See, so I used AI in the beginning, and then I sit down and I use AI before I present the estimated price range. I've anchored the price, there's a psychology around that, and then I come in something where now that I've got finer detail, I can tune up AI to suit. And we want to empower the homeowners that so in such a way that when they come to us, they they are they have an in they have a really informed understanding around what the price of their project is. So, number five is reframing the price first value. So we're doing a straight up reframe. The cheapest price is really the best outcome. Most homeowners would not disagree with that comment. Clients often don't understand what's included or excluded in pricing. Guys, I've seen quotes from competitors in this town, and they confuse me. You know, because I look at it from a tradesman's point of view, a business operator's point of view, uh, but I can also sit as a client and go, if I was a homeowner, I'm like, this has got a lot of gray area around it. Um AI can help uh highlight ranges. But us as the builder, and here's the kicker, and then we'll close on this. We provide the real solutions. So they can hyperbolize in the world of AI and artificial intelligence and all of that. But at the end of the day, when when they grab that and they've got that as their grounding, and you come in and say, Yes, I agree, that's probably the right price. Then all what we can then do is if they're serious and they got the money, we can then advance the deal. We can move it closer from being this far apart over time as we move forward, we start getting close, close, close until you and I get a text message said we've reviewed the quote, we're happy to move forward. What's the next steps? Golden. Clarity around actual costs. That's really what it comes down to. We're not parroting because what's I only had this client yesterday said to me that he got he was getting some guttering done. And he said, we had massive differences in quotes. Now I've experienced the same thing. I've had a quote for 20 grand for plumbing, rough in, and finishing, and I've got the same project with the same plans and the same bid request document, and I've got a quote for 55 grand. Guys and gals, that is why homeowners get so twisted because they actually lean towards the cheaper price naturally and go, well, this one we're gonna we're gonna rely on more because Max is too expensive. See, I'm trying to wipe the floor and go, time out. Let's do some work up front, get our website together with some of these AI prompts so that people that call us actually have a realistic expectation around what's going on in their scope. I think we've that's the tip of the iceberg, guys and girls, and I think we need to absolutely use it. Okay, if clients better understand the cost before they meet you, so this is where I'm going, um, you spend less time defending your price and more time winning the project. See, I know this. My conversion rate, let's say a benchmark bottom line from a brand new cold lead that comes into a contract is about 20% out of 100, right? So so one out of five will go to contract. If I can move them into a pre-construction agreement, it's about 90-95% chance I'll move them to a deal. It's it's not a fluke, okay? And I would love it if all my competitors in this town did exactly what I said, because no longer do Max Smith and Sons and Joe Blow from you know ABC Building Company walk in and see this client. We have these vastly different price estimates on what a project should cost. I would love it if they had 10 builders walk in and they're all$25,000 for a bathroom. Now what hot shot? So there you go, folks. There you go. If you've got any questions, email me. Maxelitebusinessadvisory.com, get across to my website, um, elitebusinessadvisory.com, get across to the academy, check it out. If you want to do you want to talk to me about what's going on in your business, hit the hit the book a consultation button, come talk to me. I'll give you 30 minutes uh with no strings attached, complimentary, and uh we'll have a look at what you're doing well in your business and what you're doing maybe not so well, and see if we can't get you on the right track. Go build a kick ass business. See you in the next episode. Cheers.