Good Money After Bad
Pricing jobs by parts and hours of labor is like throwing money out the window.
The cost of most parts in the plumbing, electrical and HVAC worlds are astonishingly low compared to the reliability, safety and health you provide to your customers. Many of your field service techs often get major repairs or replacements done relatively quickly, often within a couple or few hours. Compared to the immense utility and benefit being given, your company collects very little revenue.
You cannot just make up the discrepancy by stating an incredibly high hourly rate, as customers have a ballpark idea of what people charge out there. When your plumbing business charges the same hourly rate as a corporate attorney or top tier computer systems programmer, customers are going to walk away, be resentful or write horrible reviews on Yelp. You need to have a pricing method that makes good sense to the customer and reinforces to them (and to yourself) the considerable value proposition that you offer.
The pricing method that will bring in the revenues and profits you deserve is called flat rate pricing. However, when instituting a flat fee policy, it is easy to stumble on the various pitfalls that exist which will seriously harm your bottom line. The following guidelines are essential to maximizing your pricing policy to run a successful service business. Continue reading “7 Counter-Intuitive Ways To Use Flat Rate Pricing”
That Moment You Realize This Is A Tough Call
Carol looked at me and said, “Just so you know, we’re getting 3 estimates before we make a decision.” Not to be outdone by his wife, Bob yelled, “Four estimates,” as he turned and walked into the other room. I thought to myself, I haven’t even taken off my shoes yet and this is what I get. I hate these multiple estimate tough calls. Just then Joe walked in the door and introduced himself. “Hi, I’m Joe Crisara, the quality control manager. How are you today, Carol?”
Carol gave Joe that same determined look and said, “I just want you to know that we have 3 estimates lined up this week and we won’t be making any decisions until we hear them all.”
“First, let me say thanks for calling us and for the opportunity to help you and your family with this issue. It’s a pleasure and an honor to be here today and it really means a lot to us that you chose our company to assist you. Carol, can I ask you a question?” “Of course,” Carol said.
“Carol, I really appreciate your honesty about getting 3 prices before making a decision. We don’t go out for dinner these days without seeing the different options available to us and the prices alongside them thanks to social media and sites like Yelp. They’ve changed the restaurant industry.”
Joe wasn’t phased a bit by Carol’s comment and immediately followed with, “We like to think that we are changing the way service contractors do business with homeowners like yourself as well. You said you are only going to get 3 estimates. Our company gives 6 estimates on every call, kind of like that insurance company where you name your own price. This way you have all the possibilities right in front of you at the same time. So why are you limiting yourself to only 3 estimates?”
Carol was a bit stunned and didn’t know what to say but was able to stumble out the words, “We are actually getting 4 estimates.” Joe just rolled with the punches, but I could tell he was wareing her out. “I understand Carol. I’m not trying to make you feel bad. It’s just that if I were to show you my 6 estimates instead of only 4, and you liked one of those options, what would happen next?” Continue reading “Selling On Tough Calls: Multiple Estimates”
You can’t expect your employees to do their best work if they have inferior, broken, or missing tools and resources for solving problems. An effective car mechanic has all of the mechanical necessities laid out neatly in a multi-drawer toolbox, with printed car manuals nearby. Similarly, your employees need to have work tools, technology and information “aid out so they can find the right piece when they need it.
Ask your workers, “If you had a magic wand, what would you wish for that would make your job easier?” Even if you perfectly equipped your employees at the beginning, industries are constantly changing with the introduction of new codes, technological standards and ever-evolving customer needs. As a service business owner, it’s your responsibility to keep the team and its tools up to date.
Expectations Equal Results
Often, managers and owners get frustrated with what they perceive as a lack of results or low performance. However, just as often managers and leaders neglect to explain the company’s goals and priorities in the first place — they just assume employees will figure it out. And we all know what happens when you assume.
As a service business owner, it’s your responsibility to keep the team and their tools up to date.
A service company has to have performance goals so each employee knows exactly what’s expected. Have a mission statement with a clear list of top goals and non-negotiable points when it comes to employee conduct and performance as well. The higher ups need to define the essential vision, which translates into actions. This will convey to workers not only what they need to be doing but also why they need to be doing it.
Training, Not Explaining
Continue reading “Have You Taken Stock of Your Techs’ Toolkits Recently?”
Let’s be honest– completely separate from how you run your contracting company, there is a thing out there called the economy. I’m talking specifically about the macro economy. Macro means big and that means the economy on a regional, state wide or national level. There are many factors that go into the condition of the macro economy- the cumulative effects of millions of decisions by consumers, producers and investors- but you yourself are unable to have almost any effect on it.
It is what it is, and like a boat floating on the waves of the ocean, your best bet is to keep an eye on what kind of weather is coming, so you can adjust your sails accordingly. There are things you can do to protect the financial viability of your home contracting business in tough times. Just as, conversely, there are things you can do to accelerate a downward spiral as cooler economic times approach. The idea is to cultivate the former while eliminating the latter.
GO TO THOSE YOU KNOW
Especially in an economic chill, go to your existing (which includes previous) customer base. They will provide a very worthwhile foundation from which to gain jobs and increase revenue. In the home contracting industry we often think that all of our next client interactions and paid work contracts need to be brand new people we’ve never seen before.
But so often, a good former customer can become a return or repeat customer. Sometimes it just takes reaching out with a check-in and an offer of a home inspection, or the suggestion of replacing old wiring and outlets or pipes and washers on the verge of cracking.
Your overhead will stay pretty much the same regardless of how the economy is doing. So you may as well go back to your existing customer base and see what they need- leaving no stone un-turned and really maxing out your interactive customer service.
But what about when you’ve tapped everyone you know?
IT’S A PEOPLE GAME Continue reading “Avoid Creating Your Own Personal Recession”
We all know that employee. The one that shows up late every day. The one that takes hour-long lunches. The one who always has an excuse for why something didn’t get done or why they lost a sale. But sometimes, it’s hard to diagnose and even harder to fix. After all, no one is perfect and everyone has bad days. So how can you truly know who is slacking, and what can you do about it? As the business owner of a contracting company, this could take form in the following visible symptoms…
- Trucks trashed with garbage every night.
- Service tickets filled out poorly or not at all.
- No money collected on repair calls.
- Traffic tickets or accidents.
- Broken inventory and parts.
- Poor quality work below the standards the tech normally has set.
- High absentee rate or showing up late consistently.
- No communication with other team members.
Why It’s Happening
Everybody has eventually faced a personal crisis in their lives. For some, these emotional turning points can manifest itself in bad behavior at work. Sometimes stress, as a result of catastrophic changes in the personal or professional lives of your people, can show up in different ways. For most of us, that reflects the level of quality that goes into our work.
Continue reading “Why Your Team Is Under-Performing”
In the contracting industry, you use the latest tools to make your efforts the most effective. It’s all about taking advantage of the best technology. Why should marketing your company be any different? The basic principles of marketing may remain constant but the platforms we use change over time, and sometimes rapidly. It wasn’t all that many years ago, that Internet advertising seemed like a wild new frontier. Many folks in our industry questioned this weird, far out “World wide web,” saying that they would stick with the old tried and true methods like newspaper advertising in the Yellow Pages. Nowadays, what contractor working today doesn’t have a website, and how many established contracting businesses only spend their advertising budget online?
We’re in the same kind of evolutionary period right now with another cutting-edge technology- texting. That’s right, the same text messaging you use to send notes to friends and family from your phone can be used to significantly improve your contracting business!
The first thing you need to know about text messaging (technically known as SMS) communication is that you need to make sure that those receiving your messages have subscribed to your marketing list. They need to have “opted in”. Don’t just blast text messages to any and everybody because besides being highly frowned upon, there are actually laws against this.
To start building your text message marketing list, include a brief opt-in code, or “Text ‘Start’ to this number” on all your existing marketing and customer communications- flyers, print ads, business cards, invoices, receipts, coupons, in-house signage, vehicle signage, website, emails, social media, etc. Continue reading “How to Use Texting to Grow Your Contracting Business”
I know some people get a little uncomfortable with the word ‘brand.’ It sounds to them like an advertising term, like it’s all about the slickness and the sizzle and not about the sincerity and the substance. But if you stop looking at ‘brand’ as superficial window dressing but instead see it as specifically defining your company’s mission and making a clear case to fulfill various promises, then you see that having a well-defined brand is not dodge at all, but rather an act of integrity.
I know that contractors are people of integrity and substance, who are proud of delivering tangible products and services that improve the spaces where people live and work. I myself spent decades as a professional in that industry. I want contractors to embrace branding as a necessary part of having a respected and successful business, but also as a tool for defining and being held accountable to genuine, deliverable quality, not as a way of avoiding it.
Whatever brand you may think you are generating and spreading out there, your brand is being created every time someone tells a friend or associate about your business. In this day and age that could take the form of a tweet, status update, YouTube video, blog post, text, email or website comment. The consumer has great power these days when it comes to defining your brand, far more than they used to. Which is why it is important for you to get out ahead of the pack when it comes to defining your own brand before others start doing it for you. And that means coming up with a list of unique and powerful deliverables that you then back up with the quality of your products and services.
Continue reading “5 Ways To Make Your Brand Pop”