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Million Dollar Electrician - Sale to Scale For Home Service Pros
Rewiring Our Mission: (Electricpreneur Secrets)
Helping Electricians Achieve the $1M Service Van so they can experience ultimate control over their futures.
Join Clay Neumeyer & Joseph Lucanie for a new electrifying episode & High-amperage action item each week to spark up your service van sales to $50K, $70K, $100K, $150K months, and beyond!
Million Dollar Electrician - Sale to Scale For Home Service Pros
Replay - Why Electrical Service Pricing Is at a Premium
Ever wondered why some electricians light up their business while others are left in the dark? Join Clay and Joseph as we untangle the wires of exceptional customer service, smart pricing, and how to stand out in the electrician industry. This episode is charged with stories that electrify, from Joseph's own service industry frustrations to our shared insights on the value of specialized services. There's a surplus of laughter and lessons as we share our experiences, ensuring you're well-equipped to handle the current of consumer expectations and the voltage of a competitive marketplace.
Strap on your tool belt and prepare for a hands-on discussion about the ethics of service rates and operating at peak efficiency. We navigate through the challenge of keeping business rates sustainable while delivering quality service that doesn't leave customers shocked by the price. Discover how understanding your overhead can illuminate the path to justifying costs and maintaining the health of your service industry business. This is where we shed light on the balancing act of business survival and the importance of transparent communication with your clients.
Finally, we close the circuit with entrepreneurial secrets that spark success. We discuss how mastering sales techniques, refining pricing strategies, and delivering top-tier service are not just for the electrician industry but are the universal tools for thriving in any business. Remember, when it comes to learning from success and failure, having 'skin in the game' is the best conductor. Power up your entrepreneurial spirit and join us for a session that'll leave you energized and ready to take your service to the next level!
Join us LIVE 5 days a week on the Facebook Community page:
https://www.facebook.com/groups/electricpreneursecrets
And see us and our stories and wins at:
https://www.servicebyelectricians.com
Here we go.
Speaker 2:Roger, roger All right.
Speaker 1:Welcome to Electropreneur Secrets, the Electrician's Podcast. I'm your host, clay Neumeier, and with me, as always, my esteemed co-host and business partner, joseph the sales bot Lecani. If you thought his nickname was great, wait till you hear mine, or maybe you've heard it already. I am also known as the pleasant peasant Neumeier because I'm so Canadian. There's got to be a better Canadian nickname. I just haven't come up with it yet, or you haven't come up with it yet. So if you guys have an idea, feel free to send them to us in the DMs right there in our Facebook group, where you could be live with us engaging five days a week as we're on this mission to help you master sales, simplify pricing and deliver premium level service. Joe, how did I do on the intro today? Please let me know.
Speaker 2:Pretty, damn awesome I also like that you're stitching in saying, hey, help us with your nickname. And the thing was is you were like well, we call me the Pleasant Peasant because I'm so Canadian. Expand on that a little bit more. Are Canadians always that nice Like? In my opinion they are, but you actually get to deal with them.
Speaker 1:So exactly, it's a stigma. There's a cross-border stigma that you're actually quite rude and I'm actually quite pleasant. So I'm sorry. I don't know why it's there, but I did tell you before and I'll say it again I'll hold the door open for people and then thank them for walking through. Only in Canada. I don't think you'll see that south of the line.
Speaker 2:No, if you people are, you know, honestly, south of the line, the majority of what you see is someone holds a door and the other person pulls a gun. That's America in a nutshell.
Speaker 1:Yeah, fair enough. Fair enough, man. Anyways, how are you doing today, and please tell us how your day is going so far, because I know there's a little story in there.
Speaker 2:So personally, I'm doing great. I've experienced more peace and more calm in my life than I've ever come to know, and I'm grateful for it day to day. But with that level of calmness, I get to bitch about some things that are often fun, that happen. So I love hiring service companies because it gives me the opportunity to see how the industry is actually growing and improving and whether or not service is being delivered at the highest level. And so often I'm getting just cut away at the knees because service is not there, no matter where I'm looking. But I want to talk about an experience I had today which I think may make some people laugh. Is that?
Speaker 1:okay, All right. What happened?
Speaker 2:Okay. So we had an air conditioning issue the other day where, luckily, we found out it was just a bad capacitor. Awesome, you know what? I should have taken out my meter and checked for the farads and I didn't. Didn't do it. But I called a professional who could. Great guy Sent me the text that he's on his way Clean, cut, uniformed, did the whole sales presentation, didn't do six options, only gave me two. But I thought he did a good job. I bought the best package he could and he said okay, I don't have the material for this right now, I'll do the fix, we'll lock you into our membership and we'll come back to do this in the next one to two days. Great, no harm, no foul. I get a text this morning at seven o'clock in the morning that a tech is on his way. So I'm like, okay, great, I'm already up since five. No issues.
Speaker 1:Going down.
Speaker 2:I put a sticker on the door. Hey, just so you know, I'm going to be in meetings all day. Here's my number. I turned off the breaker. Here's a picture of the breaker off. I disconnected the fan. The fan is off as well. You can work on the unit if I'm not there. Here's my number to text me. I got a text four minutes later saying that let us know how we did so. I'm like oh, came on site physically, called the office and they're like yeah, no, no one's supposed to be at your house today. Like I got a message saying someone was on site and someone left. They're like well, we're going to have to call a supervisor and see what happened, because no one's supposed to be at your home today.
Speaker 1:We don't even have record that you've been purchased uh, purchased that additional thing. Don't even have record. Don't even have record of it oh wow, you're off the map now.
Speaker 2:This is uncharted territory and these guys are shooting from the hip, we gotta call a supervisor. Something is wrong here yeah, I was gonna say. I literally was like, please, I want to do this. You guys are a great company. I was like, just please, let's just get get the thing I paid for installed. That's really all that matters. Bygones, I won't even name drop you. Please just get it done.
Speaker 1:So these things you know what, my little brother sometimes we joke about like just a magnet for oddities in life you ever meet a person like that?
Speaker 2:I feel you are that person for service that I feel you are that person for service and there's a reason for it. There's a real reason for it and my wife Melanie teases me for it all the time. I love her to death. She's probably one of the most brilliant people I know, but she unfortunately points out things that I recognize. I'm like, damn it, I wish you didn't recognize it, because I'm so process-oriented, because I'm so process oriented, I look at every step of customer service as equally essential. You leaving the van with a smile, you walking to the door and having your hands in front of you, you having your shirts pressed, the follow-ups, the everything, the pricing, the presentation it's all so meticulous. So when I don't see it done, I start checking away negative marks on the experience. And even if I buy from them, I look back and say, would I buy from them again? Could they improve? And so many times I just don't want to listen to improvement, I just want to get in and get out.
Speaker 1:It's a problem in our industry and in almost every industry. Really important piece, because service in itself is a niche, and I don't just mean like okay, service, electrical, like home residential service. Sure, that's a bit of a niche. We can go a little deeper, though. Even home residential electrical service, we're still not speaking to a problem or an exact solution, and thus, if that's what was on our business card or advertisement, would it get?
Speaker 1:people to call and the answer is, for the most part, no right. People don't just buy a home or acquire a home or walk into a home and decide, hey, I need a residential service electrician.
Speaker 2:Never, we're the least likely to go into someone's home right.
Speaker 1:Right, but just like our generator class, we've got coming up at the end of the month. Now we're talking and I know this is a bit of a niche tangent, but I'm going to full circle, tie this right back in If you're speaking to generator needs now, are we addressing a problem?
Speaker 2:Yeah, because people don't really understand it.
Speaker 1:Yeah, you got power outages. Is this happening a lot in your area? And in fact you can even get that information, as we've disclosed, usually pretty easily from a utility, local utility company, right?
Speaker 2:yeah, I mean a lot of them in our area. They even have apps where you can check in and be like where are the power outages? Yeah, it's literally just report a power outage, okay, these are the power outages. It's literally just report a power outage. Okay, these are the power outages that are out. Which one are you? It's like I don't know, but I'm going to write down all these power outages and save them and I'm going to market generators to these neighborhoods.
Speaker 1:And so I've quoted this before. I'm going to tie this back to the services and niche.
Speaker 1:I believe it's King George IV, princess Diane's father, actually said this the highest form of distinction is service to others. The highest form of distinction is service to others. If you master that service, that becomes your niche as well. It's not something that is as easy to market, but as an experience it is going to create apples to oranges, meaning you're not even comparable in your market. All people need to do is experience that level of service that we preach and teach both on this podcast and behind the scenes, and you'll start having clients for life.
Speaker 2:Can I add to that? Please go ahead Speaking as someone who hires other professionals. If you I mean you guys have heard the story so far of all the people that I've tried hiring and all the problems that have come afterwards All I'm looking for is someone who can check three out of four boxes. That's it. I'm looking for someone to do three out of four. If we ever had someone who did four out of four, I would never leave them, ever. I would be a customer, for I literally have to move out of their jurisdiction before I left them, and that is something I don't think enough people are talking about because we worry about price, right, like you would come up with. I mean, that's the whole topic.
Speaker 1:Why is service at a?
Speaker 2:premium. I personally think the reason why service is at a premium is because it's so rare to find people who operate at the highest level that there's really a value to that, a tangible value. I know for a fact that if I had the opportunity to say I get to work with a better flooring company or a better security company or a better air conditioning company, I didn't have to experience those problems. What about a professional photographer not charging us $550 for a show up fee?
Speaker 1:I'd pay more for it right.
Speaker 1:Yeah, no, it's everywhere we look, it's everywhere we go and it's interesting because you know, speaking to us specifically in the service providers that we hire and have to seek out and then build a relationship with, I mean, we're really bad in a low percentage here. We're not getting a ton of great service, even though we're trying. There's not like we're aiming for cheap, we're just taking recommendations, referrals, anyone who can help us, please help us, and service at the highest level. But what they don't realize is oh, there are a couple of uh, electrical, uh business coaches. They don't realize, even through our name, service loop, the implications of how much service training goes on here and how much focus goes into this niche, this exact thing, and so it's comes full circle back to this podcast of like. Should we be teaching these people? And I've seen you do it over and over at your house. Every person who goes door to door gets it and they should get that training. Everyone should get this training. Honestly, I think businesses and here's me going out on a limb business would be more successful if people train in customer service before accounting 100, because there's nothing to freaking count if you don't learn how to serve, there's nothing to count, joe go
Speaker 2:ahead say it louder for the people in the back, man, because people are not getting this. We need to serve and through that service they'll hire you again. Like literally. Imagine this, even just you want to talk about pricing. Each lead is worth $250 to $500 per call, right? If they call you, that is the money that's on the table you had to put out. You anteed up and said to get this phone to ring, this is what I had to pay.
Speaker 1:And if I'm listening to this and saying there's no way, that's right, that's too much. You got sort of the soft list for us of considerations why it gets to that point. Sure, A hundred percent.
Speaker 2:Fuck. I'll dig into it right now. If we're in a situation where we want to get the phone to ring, you had to do a couple of things in the most basic capacity that you need to do. So let's take the minute. Like a small office, you have one CSR, you have one phone, you have one computer, right.
Speaker 2:First off, how did that company know to reach you? They had to have paid it in some way. Whether it's your online marketing campaign or whether you're doing direct mailing or whether you're doing door hanging, whatever it was, your marketing required you to pay money for those leads. But in addition to that, it had to go somewhere. They didn't just set up a smoke signal and you saw them. They had to reach an operating number, so you had to have a business line. That costs money as well. You also have to pay for the phones.
Speaker 2:Now, phone service is different than the actual number, the cellular number. You need to make sure you have a quality phone that can have forwarding and all those additional associated costs. Have a quality phone that can have forwarding and all those additional associated costs. Your computer needs to be able to run on some sort of search engine optimization or some sort of CRM, something that says I'm going to take the customer's information and I'm going to put it in and record it. Then you've got someone who had to be trained on how to do the process. You have to pay for that training as well as their hourlies.
Speaker 2:So if you take all those costs, just those minimum costs, you're not talking about their benefits. You're not talking about their packages, the office requirements, the overhead of the shop. We're just talking just these basic things. All of it adds up. So the lead may cost you only $20 per click, but manning someone behind the desk, having the desk, having the phone, having the computer, having the training, having the software, having the shop now it starts to add up Does that make sense?
Speaker 1:Yeah, there's a ton of burdens behind it. Absolutely, it makes perfect sense, not to mention a lot of people are either going to say, well, I'm mostly referrals and or will I just do a lot of legwork to come up with my leads but your time is valuable too right and the efforts you're putting forth into clients and getting those referrals.
Speaker 1:I mean there is a process there, or at least there should be. If you're relying on referrals, then you really should have a process that delivers consistent referrals. If you don't, then it's kind of chance, isn't it?
Speaker 2:Yeah, and the thing is, you actually touched on something I thought was really cool, where you're like, well, the devil's advocate is, maybe they're doing door to door, maybe they're doing referrals, right right. Well, if that is the case, you're paying for it regardless, but you're paying for it with time currency rather than financial currency. I can either buy leads or I can attract leads, but I'm either going to go door to door and knock on things, or I'm going to work on my own optimization myself, or I'm going to manage reviews, but you're punching in the clock, so you are paying for it. What's your time worth?
Speaker 1:Yeah, it's big. It's big, right. When you really start doing the math, it adds up. So now we have that cost per acquisition. I can get on board with you we're what $250 to $500, depending on the establishment. I mean it's just not free. It takes an investment. And this really does bring us into this full topic today, because there's so many misunderstandings about service pricing how to establish that rate? Why? Why is the big one? Guys, I've seen some of the gurus in this industry not know why 50% efficiency? And when we say 50% efficiency, all I'm saying is hey, you got a full-time year. How many hours go in a full-time year for work?
Speaker 2:I mean, I'd have to look at the exact number myself, but I know that there's so many factors that come off of it where we're going to be saying one. There's weekends that come off, there's holidays that are going to come off, there's inefficiencies with logisticals. You're not going to get your full work week.
Speaker 1:Let's use the generalized formula, though, which is 50 weeks times 40 hours a week. Can you agree that 40 hours a week is full-time?
Speaker 2:Yeah, I would say. I mean, how many of us full-time people wish we only had 40 hours right.
Speaker 1:Right 50 weeks, would be granted two weeks of vacation, which most of us aren't taking, but add up all the days off, sick time etc. You're going to be minimum 50 and more likely 46 to 48 weeks. But just ballparking and saying, okay, 2 000 hours, okay, that's what you would expect at a, let's say, a residential construction electrician job. These guys are going to keep getting houses or they're going to keep getting commercial work, they're going to keep getting projects, industrial work, and they're going to keep me busy a minimum 2000 hours. That's why they hired me and I accepted. They made an offer. I accepted because that gives me safety and security at home. As an electrician, I can raise my family and pay the bills. Does that situation make sense?
Speaker 2:Yeah, I would never knock anyone for being there. You have your needs. You found a safe bet. It requires physical work, but you took that risk and that bet for your family.
Speaker 1:No judgments. So that company, these project-based construction-based companies, get to take all of their burdens and use that number, that 100% or roughly close to that, as an efficiency to establish their rate and depending on the company and the number of staff they have which are billable crews, usually that math works out to somewhere between $90 and $180 an hour and $180 is really quite high In most cases.
Speaker 2:We see that $100, that 100 to 150. That's a shame, it's such a shame.
Speaker 1:It's crazy, right? So here comes the challenge homeowner in this market prior to service electricians really even existing, right? Maybe there's the odd one, the odd person handles this, but for the most part us electricians are going well. Is there really enough service work out there for me to run a full-time establishment off?
Speaker 1:so this poor homeowner starts dialing numbers, let's say in 1990 opens the yellow book right trying to find an electrician that does service work, but what they keep finding is project-based electricians, and these people all have that 2000 hour based rate, and so what's the likelihood that they get served at the level that we're talking about earlier in this episode?
Speaker 2:it's slim to none at best, because it's like almost trying to turn a Phillips head screw with a flathead. With enough effort you can make it work, but it's not meant to do it. They're operating on the get in, get out efficiency model. They're doing their job great.
Speaker 1:Yeah. And if you're one of the established electric printers that are listening to us today and you've already got construction and service work, Well let me ask you this question How's the blend working for you? How are your rates? Because one of the first pieces of advice that we give to people who want to break out in service work is to go to bigger companies and ask them if they even want their service work. Because what tends to happen if you're not divided in that company and you've got one blended rate for everyone, is when they try to serve service A they're not trained for customer service, dealing with a homeowner at the level that we train, and B the rate's not right. So they go.
Speaker 1:They're not established well enough to make any profitability. So what happens next? They don't prioritize that, that work. They don't even want those calls. Those calls are annoying and it takes too much effort to deal with debbie homeowner, who has her needs and needs them. Today you're going to send someone out that doesn't know how to service that person and they don't make any money for your company and they don't want to do it.
Speaker 1:They don't make any money for your company and they don't want to do it.
Speaker 2:They don't even want to do it Because the thing is, people don't like doing things that make them uncomfortable. We've talked about it before right, where the reason why this process is so effective is because it gives you the guidelines and the path to walk. But now you're going to get a new construction electrician who doesn't ever do any interior finished homework, and now you're going to send them on a call to interact with a customer who's clearly unhappy because her fridge isn't working and it's smelling. And now you got to go through the house and troubleshoot, while also maintaining good customer service practice. Oh, and you got five other jobs today.
Speaker 1:And let's talk about the characteristics again. Right, Construction electrician versus service electrician. We got a stereo in tow for construction.
Speaker 2:Makes sense.
Speaker 1:Probably dirty work gear, no spare uniform, no charge device, no etiquette. Maybe a hat on backwards, not clean shaven.
Speaker 2:Are we in uniform at all like? Would they look like a clean shaven, clean cut uniform, pressed with a steam collar?
Speaker 1:no, I think so they're lucky they've shown up in a company t-shirt maybe just bid his subway sandwich if he's on the jared diet and got a nice green leaf between the teeth going for a smile. How you doing today? Doing today, sir, put the smoke out right, blow it in his face. Yeah, I'm here to see about that dryer circuit.
Speaker 2:Remember the time when I told you the ADT guy threw his cigarette right into the van, and this is one of those moments where I'm like that stuff really happens. I know, when you're making that reference, that some people are like oh, they're not that actually bad. I'm telling you all I've seen it for a fact Takes a drag, throws it in the van and then coughs and walks to the door. Great quality establishment.
Speaker 1:Love it. Come on in, Not to mention booties or sorry floor guards.
Speaker 2:Floor protectors Little golden nugget here why are they floor protectors and why are they shoe covers? Shoe covers protect your shoes against their floor. Floor protectors protect their floor against your shoes. So by describing what they do, it creates the value of what it is.
Speaker 1:Right. So as we go deeper and deeper, with everyone listening here, you get to realize this is a niche, this is a specialized, individual little nook in the electrical world that requires specialized training, specialized presentation and really good etiquette. That's what it takes. So let's back this up. Is it any wonder why those construction rates and those construction companies would not be able to prioritize this kind of work?
Speaker 2:Makes sense. Now that we've seen the numbers, it literally makes complete logical sense. They're not established for it. Because they're not established for it, they're not going to be profitable while doing it. They're not going to be profitable while they're doing it. They're not going to take the time. In addition to it being difficult, because you're dealing with customers in a very heightened emotional state- yeah, 100%.
Speaker 1:So back to the rate then. So what do we do about this? Because some people I've even heard the word ethical floating around right, what's a sustainable rate for service then? How do we build a rate that can allow me to be a sustainable business, and a growing sustainable business? Because it's growth or death. Guys, there is no. The reality is maintenance doesn't exist. Yep, there is no live and maintain, there's only you're going forward or you're going backwards, Staying still. I mean, my post today was kind of on this balance. It's not real. Balance isn't a place, it's an effort, it's an activity that's always happening, just like growing. We're always moving ahead. So to have that an established service company that can deal with the inherent risk of volume and the pain in the ass that it is to constantly be in balance of your lead generation, sales and fulfillment.
Speaker 2:Damn right.
Speaker 1:I know electricians are dealing with these problems, right? Maybe your schedule is over full right now. Maybe there's not enough on it right now, right, maybe leads are drying up. Maybe sales are great, but no new leads. Maybe fulfillment's great, but no new sales. It doesn't take long. Where are we going to go in the service world? A week, two weeks All of a sudden it's like starting from ground zero again. We got to push real heavy and try and get this thing going again. I'm scratching for leads. I'm calling people back. Have you ever felt these pains, joe?
Speaker 2:Oh my God. Yeah, the closest comparison I can come up with is this it's you know how we advise people to always be hiring.
Speaker 2:It's the same thing with always be marketing. Even if you have two weeks of work, you need to make sure that you're working on the next two weeks of work. I don't want you having more than two weeks of work at a time, because then you have people who are going to be risking cancellations and there is psychological and scientific proof behind that. We can get into, but we need to know for a fact that we are always looking for the next job and if you keep that mentality, you'll start prioritizing things like referrals. You'll start prioritizing things like recommendations and new leads that come in from good, organic sources.
Speaker 1:Yeah, really important stuff. So now to deal with this ethics question. Right, we take the same 2000 hour work year and we take the industry average of 50% efficiency and we cut that 2000 and a half. And we take the industry average of 50 efficiency and we cut it. Cut that two thousand and a half. We're left with a thousand hours, a thousand hours to pay your bills. This is still an assumption, guys. That's what people don't understand. It's a rule of thumb, but it's still an assumption. The best actual number is going to come from historical data. If you don't have historical data, then go with that average, go with that 50 until you know better. But here's a reality that happens. What about when you get the weak job?
Speaker 1:that's actually dangerous happens to your rate. That's where it can begin to feel like, okay, okay, am I billing too much? But in reality, your other 49 weeks are not guaranteed.
Speaker 2:Can I touch on that?
Speaker 1:Please do.
Speaker 2:So I want to speak to the thought of how it actually is more ethical than it being less. All right. The reason being is this when you set your rate like, let's say, sake of argument, we're talking round numbers. I've agreed to do a job several days and it's $10,000. Granted, it'd probably be more than that, but I'm just using round numbers for now.
Speaker 2:If you're in a situation and you go to the, you quote the job would your customer ever be happy with you telling them that it's more at the end? No, never, right. There's no way the customer would ever say I've agreed to this amount, I'm okay with more. So we've already known for a fact that it's ethical. You're going to honor your word by saying this is the number that I'm honoring. I swear it will never be more than that. So you've already met the first half of your ethic. I've agreed to an amount. I swear I'll never do more than that. But the question I have for you all is this If the customer were to come by and say I know you're not time and material, I know I've agreed to one rate for the job, but if you do it faster, will I get less charge? What would you say to that For the most part we'd be like no, this is our rate. That's the ethics behind it, if you can say I've approached you with options. You knew the finest money could buy. You knew the worst, most economical bare bones frankenfix we could come up with. And you had the choice and you made a choice and you said this is my set number that I'm going to go with. I'll promise that it's never going to go up, but I'm also going to promise it's never going to go down. That's how I justify it.
Speaker 2:But the thing that we need to understand here, in addition to that, is this Clay mentioned earlier that your months, your years, your weeks aren't guaranteed. So you actually taking on a bigger project is actually a risk. The reason why is because if you took on one week project and you said, well, I'll do it at a better rate because it's more days $2,000 a day or $2,500 a day you could actually be turning away four more repeat customers and more profit and more satisfied customers than you would be working with one. In addition, if that one customer finally decided that they didn't want to work with you again, you've lost your primary revenue source and you have to work that much harder to get that many more leads. But if you add service rate you can have five customers. It's potential that you have a higher rate of getting repeat work. So I'm sorry if I went a little too deep into that, but it's so interconnected I didn't want to leave it.
Speaker 1:No for sure. No, I can appreciate that Definitely and I agree with you a hundred percent. You take on more of the bigger stuff. You're losing opportunities.
Speaker 1:Now sometimes, you know. When our platinum sale, though, takes us three or four day installation, right, what then? And the reality comes into. I think there's even a question at times of well, is there just a day rate? Do I cap out my earnings or do I continue to factor in my service rate every hour for the four days? Yes, I think that was a recent question, but ultimately, the latter is our preference because, again, the inherent risk, the inherent risk that we don't fill all the weeks this year, everything is resting on assumptions all the time, except for one thing.
Speaker 1:Here's one truth Either way you're paying the bills, either way that overhead is coming out of your account, this year, you actually you know how much the overhead is, or you should. If you don't know yet, guys, please figure this out. Get ahold of our pricing tool. It's going to explain a lot of this and take you to a fun little calculator that can be done with sliders to help you with that. Okay, you can engage with us on Facebook and request that hashtag price tool in our entrepreneur group.
Speaker 1:Having done that, knowing your overhead, in fact, if you look at it from the let's go budgetary standpoint beginning of the fiscal year, here we go. I know I've got 200K of overhead coming out this year and I'm booked for two weeks. That's the ideal service situation. There's another 46, 48 weeks. You don't even know yet. You're operating on faith to pay those bills, knowing that your good service will perpetuate this market. So let's speak to the other side of this ethical equation. What if we took that away? What if we didn't have the service companies to service the homeowners? I'm going to go back a bit here. Are the homeowners winning now?
Speaker 2:No. The reason why they're not winning is imagine you take this new construction technician or installer at that point and you say I'm going to put you in a scenario that one you're not comfortable with, two, don't want to be involved with, three haven't been trained on, and you're only going to make sure that you win when the customer is able to say I was served at the highest level, otherwise you're going to get a bad review. It seems like it's stacked against you, which means that people aren't going to accept those calls.
Speaker 1:It's crazy, but the world's shorthanded. So if you think about it, this is actually a win-win. Yes, the pricing is higher, and by higher. I know there's people itching to hear a price If you haven't established yours yet. Typically they're $250 to all the way up to $600 an hour for a service rate.
Speaker 2:I've heard.
Speaker 1:Within our program we've seen as high as 500. That can feel this price shock, something we address in our price tool. It's written in there and it's there to help you with that, that self-objection, that red team, the voice you'll hear about your pricing. But I'm telling you, if you look at your expenses for the year and factor that in I don't yet know where all this money comes from, then you begin to feel a lot better about it and realize that although the rates are high, although the pricing may feel high for an installation or demand call such as this, the homeowner is the one who's benefiting by having someone to serve them at that level and they're the ones that get to make the choice about what they can afford and what they really want.
Speaker 2:Can I touch on one other thing, if that's okay? Yeah, you said something that really inspired me there, where, if we're trying to figure out how we can justify a service rate, I guess the logic that I would want to follow with that would be asking the customer a question and saying okay, I understand that you want us to warranty this installation. Would it make sense that we're providing you a rate that's sustainable so I can stay in business another year? What good is the warranty if we are not sustainable? Realistically, isn't that the fact that most people have to deal with? They wonder and saying well, what kind of warranty you're providing? What kind of service package are you going to provide? What kind of maintenance agreement you're going to provide?
Speaker 2:But if we can't guarantee we're going to be in business for future years, meaning you haven't factored in for growth, you haven't factored in for expense, you haven't factored in for all the things that are going to require push you to that level. It's going to come from somewhere and you're not going to like where it comes from if you haven't factored it in. So is it more ethical to stand behind your own company to serve your clients, or should you take from your clients, when the time comes, that you didn't factor it in.
Speaker 1:Yeah, a hundred percent, and I agree. At the end of the day, the numbers are still the numbers, and the numbers I'm talking about is 80% of small businesses fail. It's a number I'm not okay with and it's a number that's largely there because we don't figure out one of a couple things, or both Our proper sustainable pricing in the market that we're in, right, some of us don't even know what those numbers are that found that price. How can we have an established rate if we don't know the expenses that come out of our business? That's where it doesn't matter what anyone else is charging.
Speaker 1:On the page we heard this just the other day there's someone who is um, I guess I don't want to say we were in a debate over pricing because once again, location comes to mind. Well, they don't want to say we were in a debate over pricing because once again, location comes to mind. Well, they don't charge that around here. It always comes down to they, doesn't it? What about just two people in an exchange and letting one of those people dictate what they spend? What about having faith and operating with the idea that if I don't charge this amount, I won't survive this? Definitely not growing right? We've asked this question before how long can a business survive without sales?
Speaker 2:I mean really until the not very long, I mean without any sales. It's you're digging into something, it's got to come from somewhere.
Speaker 1:Without the sales exchange, is it even a business?
Speaker 2:No, when it comes to bills, the ice man cometh Pretty much you know for a fact. They're going to come for their money, and if you don't have it, it's got to come from somewhere.
Speaker 1:Second question, when it comes to profit, how long can a business operate without profit?
Speaker 2:How good are their loans? That's the thing, Once again. If you just move money sideways forever without a like, I'm going to always go to the zero, no more, no less. All it takes is you to hit one curb and need a van realignment, and suddenly you're in the red.
Speaker 1:Yeah, and you nailed it in saying honestly it could go forever. Except what happens when we're running sideways for prolonged periods of time we lose interest, you become part of the 80%. So that pricing's got to be there, it's got to be figured out and the exchange has to be figured out, and if you have those two things and you could serve at the highest level, you're in. That's it, that's the formula, it's that simple. And today we wanted to bring you all of this and some more about the niche and all of that, because I don't think that why is well understood by many. I think there's a lot of I don't want to say red tape, but fog around pricing, why we establish it the way we do, how to properly establish it. And really, I mean, if you come down to business dollars and cents right Expenses divided by your product or service demand on the market, ultimately for us, because we're service providers, it becomes by the hour that's really the only metric you can use, because you've got people come in that you providers it becomes by the hour that's really the only metric you can use, Because you've got people come in that you're going to pay by the hour. All of the above, Divide the two. Add the markup. That's the most simplified version, A comfortable markup that your business can thrive off of.
Speaker 1:But again, our price tool is going to break that down even further. Guys, Show you the nuts and bolts of it. Break that down even further, guys, Show you the nuts and bolts of it. But ultimately, today your big takeaway has got to be that 50% efficiency. And why? Right, If you're going to serve in the service game, it's got to be that. What can we create for some action items today, Joe? For these guys.
Speaker 2:So I actually have both on the top of my head. Do you want to take one, or do you want me to fire off on both, because I can do either one.
Speaker 1:Oh, you can go, just go for it, no worries.
Speaker 2:So the action item once again, the bare minimum action, is to simply take record of what your customers are telling you. What that means is this all your bad reviews, all the unhappy customers, everything they're all telling you something positive. The way of positively looking at it is this every time someone gives you advice, you're technically getting free consulting. In fact, if they've bought from you, they're paying you to give you free advice. So if they're telling you that you could serve better or they're less happy, immediately going defensive and saying, well, they don't know what. They're telling you that you could serve better or they're less happy, immediately going defensive and saying, well, they don't know what they're talking about.
Speaker 2:Just be willing to question it and say am I the problem here? If you can look at that first, I'd say it's the bare minimum. Am I the problem? Is it even possible that I am the problem in this scenario? If you are, you just prevented a bad review and saved a client relationship and I guarantee if the client ever saw that, they'd be like I'm sticking with this guy. He's willing to take accountability.
Speaker 1:Fair enough. Okay, what do you got for all-star?
Speaker 2:The all-star a little bit more fun. The all-star action is I want you to hire service companies more fun. The all-star action is I want you to hire service companies. Now it's a little bit different. Let me explain why.
Speaker 2:If you're looking for service, you shouldn't be hiring people that you would never expect to provide it. So, as an example, if you're going to do renovations in your house and you are a premium service provider, you should be trying to hire people that can emulate your level of service. Because technically, you'd be trying to hire people that can emulate your level of service because technically, you'd be receiving two for one. When you pay them, You'd be receiving one the service but two. You'd also be paying for training, because how they run their play either makes you happy or unhappy. If it makes you happy, you can replicate. If it makes you happy, you can replicate. If it makes you unhappy, you can replicate as well. But you would say this is what we don't do, and here's why, because I can experience it. You will never learn faster than when you have to pay someone to learn because you got some skin in the game now.
Speaker 1:Love it, man, love it Okay. Well, thanks for joining us again today. This is another episode of entrepreneur secrets, the electrician podcast. We're helping you, master sales, simplify pricing I know that we did that today and deliver premium level service. That one also check the box. Guys cannot wait to see you again tomorrow. Cheers to your success take care.
