Archives for March 2019

What Do You Purchase That You Don’t Know The Price Ahead of Time?

By Tom Grandy

Quick question – what do you currently purchase that you don’t know the price of ahead of time?  Did you buy tires without knowing the price?  Were you surprised at the price of your ice cream cone when you got to the counter to pay?  Have you been to Walmart lately?  Did you wait in the checkout line wondering what each item in your basket cost?  Of course not!  Everything you purchase you know the price before you purchase.

Now for another quick question – What is the only industry that does not tell the customer the price before work is performed?  You got it … the trades industry.  We tell the customer we will fix this or that and by the way Mrs. Jones you will find out what we charged you when you receive the bill the end of the month!  What if the eventual bill is more that Mrs. Jones thought it would be?  Now we have an unhappy customer that, by the way, may not call us next time.  What if Mrs. Jones was billed is more than she can afford?  Now the company has a situation where they may not get paid … and they lose a customer.

The reason the rest of the world prices all of its goods and services is so the customer can make a value judgment BEFORE they purchase.  If the price is acceptable to the customer, they buy the item.  If not, it stays on the shelf.  Shouldn’t we in the trades industry do the same?  Shouldn’t we take the worry out of shopping by telling the customer the cost of the repair BEFORE they agree to have the work done?

Flat rate pricing is gradually becoming the standard of the trades industry partially because of what I just shared.  The customer wants to know what their investment will be before they tell us to do the repair.  Decision Analysis performed a customer survey several years ago.  They asked customers if they preferred being charged by the time and material method or by flat rate pricing.  The answer was 91% preferred flat rate pricing.  Are you listening?

There are several advantages to you and your company when using flat rate pricing:

  • The customer no longer “sees” your hourly rate – all they see is the price of the job.
  • Customer complaints are typically reduced by over 90%.
  • Receivables improve because the technician can (and should) collect monies right at the job.  There is no calculation to be made. The total price is in black and white in front of the customer.
  • The technician is less likely to under bill the customer.
  • When you need to raise your hourly rate you simply reprint the manuals.  There is no announcement to your customer base and no one knows a change has taken place!

There is another huge advantage to flat rate pricing.  It’s the perfect system to sell maintenance agreements.  The normal repair price is shown and the reduced price for maintenance agreement customers is printed right next to it.  The maintenance agreement customer normally receives a 10%, 15% or 20% discount on any additional materials and labor needed throughout the length of the agreement.  The customer can see their potential savings on the current repair if they purchase an annual maintenance agreement on the spot.

Isn’t it about time you considered moving towards flat rate pricing?  After all, your customer wants to know the price before they purchase.  Knowing the price ahead of time will cause Mrs. Jones to go about her business rather than watching you while the repair is being performed.  Why watch?  The price is now firm so she doesn’t care if it takes the technician 30 minutes or three hours since her price was quoted before the job was done.

Does Your Approval Rating Surpass that of the U.S Congress?

by Tom Grandy

Remember the old days.  Democrats and Republicans would fuss and fight all day long and eventually, through some give and take, come to a mutual agreement on an issue.  That night they would all go out to dinner together.  Not today!  It seems like there is an automatic “no” if either side comes up with an idea and the process of negotiation (for the mutual benefit of the country) seems to have vanished.  The latest polls I can find show the overall approval rating for Congress is 24%.  To be honest, that is higher than I thought it would be.

Two comments from having lived a very long life:

“If the husband and wife are exactly alike, one is unnecessary”

“Only worry about things you can change!”

Short of electing new members to Congress (which isn’t a bad idea) there is little the average American can do about changing how Congress thinks and acts.  Again, worry about things you can change.  Ok, the intro is over, now for the point.

We need different opinions.  If the owner had all the answers they would not need accountants, lawyers, department managers, or even input from their technicians.  However, no one has all the answers so we need each other’s opinions.  That is how we live, grow, and get better.

Below are a few suggestions to consider when it comes to gathering ideas from others concerning your business.

  • Quarterly Company Meetings – Once a quarter have a company meeting.  Ideally make it a dinner meeting (for which the company pays).  Use it for two purposes:
  1. Give a State of the Company address. Let the entire team know how the company is going from a profit and loss standpoint and what plans are going to be instituted over the coming months.
  2. Have an open discussion of positive ideas for changing the company, systems, etc.  You might even want to give a prize or prizes for the best ideas.
  • Suggestion Program – This can be a formalized system to receive written suggestions from ALL employees on how to improve the company.  If it saves the company money…..share a portion of the savings.
  • Weekly Tech Meeting – Weekly meetings keep the communication channels open with the opportunity to discuss concerns and/or ideas.
  • Create a Customer Board of Directors – Your customers are your company so it’s always good to get their input.  Create a Board of Directors made up of residential and commercial clients.  Hold quarterly or twice a year meetings around a nice dinner.  Ask for input on ways to improve any and all areas of the company.
  • Create a Professional Board of Directors – Same idea as the Customer Board of Directors.  The difference here is that the Board is made up of professionals.  Include your CPA, banker, lawyer and/or any other professionals you associate with.
  • Join a Mixed Group – Without exception this one thing can have a more positive affect on your business than anything else you could be part of.  The groups are usually made up of 4-6 similar companies in non-competing geographic areas.  They usually meet 2-4 times a year rotating from one contractors business to another.  Part of the two day meeting involves all team members evaluating the company they are visiting.  It can be painful (like joining the service) but like joining the service it is usually something you will later be very glad you did.
  • Have an Outside Consultant Evaluate Your Company – It’s always good to have fresh eyes look at your business.  Outside consultants will be very frank with you and will make suggestions for change that will benefit your company.
  • Listen to Your Wife – Sorry guys but this is important.  Women have a God given ability to sense trouble before men do.  Your wife will “sense” when there is a problem.  They may not know the exact core issue but they can sense it is there.  This is even more important if your wife works within the business.  She will see and know what’s going on and can provide valuable input.

Ok, these are ideas.  Now it’s time for the really hard part.  Swallow your pride and actually do something about the issues that came up.  If you need to negotiate like Congress is supposed to do, that’s fine.  Remember, it is not about you personally.  It’s about making the company better for everyone’s benefit.  If you will do that, I’ll bet your approval rating will easily surpass Congress at 24%!

What Motivates Better Than a Pay Check?

By Tom Grandy

Do you struggle with keeping your employees happy and fulfilled, which is often called motivation? The general feeling is that simply paying more will produce happy employees. Well yes, good pay does attract top technicians. However, there is more to it than that. Employees do apply for a job because they need a paycheck or perhaps a better paycheck but they stay long term because they feel loved, they feel like family.

That’s right, the most successful employers tie their staff to them emotionally! So how can you do that? Here are a few tips to consider:

• Family Fun – Let’s face it. Many of today’s workers have not had or don’t have a stable home life. The office “family” is very important to them. Make it a fun place to work…..lighten up a bit.

• Sincere Appreciation – Everyone wants to be appreciated. Make it a habit to provide some sort of positive appreciation for each employee each week. When you feel appreciated it provides more of a “family atmosphere” which we all like to be part of.

• Spontaneous Rewards – Occasionally gift employees $10 or $20 cash for a great customer review or perhaps drop a pizza by the job, unexpectedly. We all want to know we are thought of for no particular reason. Small gestures count.

• Company Recognition – Use weekly staff meetings as an excuse to single out specific workers for sincere praise.

• Public Recognition – Many employees (and their spouses) suffer from low self-esteem. Think about giving each of your workers their very own personal business cards and a Profile Page for each employee on your company website.

• Accountability – That doesn’t sound like fun but it’s true. The best people welcome the opportunity to shine! Set goals and celebrate when individuals (and the company) hit those goals. Technicians are competitive by nature. The good ones want to be measured and they want you to know they are doing a good job.

Dave Ramsey’s Entreleadership: Busting the Myths of Leadership

By Dave Ramsey

The great statesman Benjamin Franklin once said, “When you are finished changing, you’re finished.” And even though it’s been 200-plus years since he uttered those famous words, they still hold true — especially in today’s business world.

Long standing ideas about how to lead a team are no longer viable. Workers won’t stick around for a bad boss these days, no matter how much they’re paid. They want to be motivated and inspired. So, how can you ensure that you’re functioning as an awesome leader? Start by avoiding these common, but mistaken, leadership beliefs.

The Myth: They’re inspired by their paycheck. As the owner of your company, you have the power to change lives. After all, you’re the person signing the paychecks. Everyone should be happy, and even grateful, to do their jobs with no questions asked.

The Truth: Great leaders know that power comes from persuasion, not position. Simply offering a paycheck, or intimidating workers by holding their jobs over their heads will not make them more productive or creative. Leaders who take the time to communicate, support and encourage earn loyalty and respect from their teams.

The Myth: No news is good news. Your team doesn’t need to know when something bad happens. If sales are down, they’re going to become scared and maybe even leave. As a matter of fact, they can’t be trusted with any sensitive news — good or bad.

The Truth: Winning organizations have a culture of communication. Your team wants to know what’s happening and why. Sure, there’s some information you can’t share. But when you have the right team members on board, you can trust them with almost anything. Make a habit of over-communicating. Your team will respect you for it even more.

The Myth: You can’t find good workers anymore. Today’s generation doesn’t listen. They lack initiative, and they never show up on time. They want the world handed to them.

The Truth: You’re probably not good at finding and recognizing talented, responsible workers. Think there are no young people who are willing to do an awesome job? Look at Chick-fil-A. The company has thousands of them. Part of being a good leader is knowing how to hire. You have to be willing to wait for the perfect person — one who shares your values and work ethic. At Dave Ramsey’s company, team members are interviewed four to six times, and the process can take three or four months.

Becoming a great leader is not easy. It’s a skill that needs to be developed, and it’s one that takes time, patience and a willingness to learn and improve one’s self. But if you’re willing to put in the hard work, you’ll find yourself with a team full of talented, passionate people — a team willing and able to slay dragons right alongside you, and do whatever it takes to win.

It’s definitely worth the wait!

Is Your Company Customer Friendly?

by Tom Grandy

Over the past 29+ years of working within the trades industry I have noticed some profound changes within individual companies in an effort to become more “customer friendly”. As the new year moves forward I would like to highlight a few things that different companies are doing in order to become more customer friendly.

You will notice one item that is glaringly absent from the list. I have not listed the need, or desire, for top quality work. The reason is simple. Today’s customer expects top quality work all the time. That no longer impresses the customer. From the customers perspective – quality work is a given.

So let’s look at a few things customers really like about the companies they work with:

• Relationship with the Person that Answers the Phone
First impressions are lasting impressions. When it comes to Five Star Hotels the position at the registration desk is NOT an entry level job. In some cases the position must be earned over a period of years. That is how important the first impression is. Customers within the trades industry desire a long term relationship with the person that answers the phone. That means placing individuals in that position that are friendly, knowledgeable, and truly care about the customers they serve. This is why smaller companies often have a member of the owner’s family in that position. They know there will be very little turnover therefore allowing relationships to be built. Having software that calls up the complete customer history, including notes about the last call, can be invaluable. How would you feel if you called your local trades company and the first words out of the Customer Service Reps mouth were “Hello Mrs. Smith, how is Johnny doing in his first year of college?” After a brief but friendly conversation the CSR then says “I noticed Bill was at your home a couple months ago when he worked on your XYZ. Is that still working ok, and if so, how can I help you today.” That is being customer friendly.
• Being Contacted When the Technician is on the Way
It’s a busy world out there and plans change. Sometimes the customer was supposed to be home but an emergency occurred that forced them to leave the house, unexpectedly. The technicians day changes as well. The service call was scheduled between 10:00 and 11:00 AM but the calls earlier in the day took longer than expected. Customer friendly companies tell the customer they will be called (or texted, or emailed – customers preference) when the technician is on the way. That call allows schedules to change if something comes up and also allows Mr. or Mrs. Jones time to drive home if they are out doing an errand. Customers seem to really like that kind of communication.

• Security
Security is a huge issue in today’s world. Customer-friendly companies have technicians arrive at the home with pictured name tags, easily seem, and with a calling card in hand. Many companies also text or email the name of the technician, and a photo as well, before the technician arrives so the customer knows who will be coming. All this makes the customer feel more secure.

• Respect the Customers Property
Respecting a customer’s property should be a given but in today’s world it’s not. The truck should be parked on the street so the homeowner can get out of the driveway if needed. If you need to park in the driveway confirm that it’s ok with the customer, don’t assume. Don’t walk on the grass and always put on booties before entering the customer’s home. If the customer says you don’t need to do that it instantly becomes a moment to create a customer cheerleader. Tell the customer “Mrs. Jones, it’s company policy. We don’t want to risk bringing dirt into your home!” Also, don’t smoke. If you do, the odor follows the technician right on into the home. Use clean, yes clean, drop cloths as well. Again, it’s all about respecting the customer’s property.

• Customer Friendly Hours 
Today, most husbands and wives work outside of the home. However, that doesn’t mean the customer doesn’t want to be there when the work is done. That calls for change on the company’s part. Many companies now have staggered hours allowing calls to be made into the evening without paying overtime. Many companies work on Saturday, and some even on Sunday as well. This is a teaching moment! It’s about what the customer wants…not what’s convenient for you.

• Ability to Schedule a Service Call Online
What do Generation X, Y, and Millennials all have in common? Nearly all communication takes place on an electronic device. Progressive, customer friendly, organizations are now providing the customer the option of scheduling their own service calls right online. Few baby boomers will do that but the younger the customer, the more likely it is to happen. One principle of life doesn’t change. Older people will get older and there will be a mass of young people right behind them. Again, it’s not about your convenience, it’s about meeting current and future customer needs.

• Easily Understood Billing 
I can’t tell you how many contractors I have talked to in the past that were still on time and material. As we discussed billing, it wasn’t unusual for a contractor to tell me how much they charge per hour. In addition to their hourly rate they charged a show up fee, disposal fee, gas surcharge, etc. My reply is always the same. That is like handing the customer a gun with six bullets and asking them which one they want to shoot me with! That is too much information and is confusing to the customer. Sure, all those costs are real but roll all the costs into one simple hourly rate that covers it. Too much information invites unwanted questions. Go to flat rate pricing so the customer knows the cost up front and explain that payment for service is required before they leave the home. Make it simple and easy to understand.

• Clean Up the Area When Work is Completed
I saved this one for last for a reason. This is one thing, from the customer’s perspective, has NOT changed over the years. Most customers, especially women, see a direct correlation between how well the technician cleaned up and the quality of the work that was performed. Is that right or fair? No, but it really doesn’t matter because from the customers’ perspective it’s true. Customer oriented companies recognize that fact and require all service technicians to take a small vacuum into the home to clean up the work area before they leave. Yes, it will take an extra 5-10 minutes per call. Simply add the time, and therefore the dollars, to your flat rate pricing guide and the cost is not only covered but you will then have a happy customer that is likely to mention how well the technician cleaned up to her friends and neighbors.

Repeat customers that recommend your company to others are the foundation stone for profitable growth. Creating programs that are centered on the customer’s wants and needs will become more and more important as time goes on.

Here’s a parting thought. Think about creating a “customer” board of directors. Meet quarterly and ask for suggestions on how your company can become more customer oriented. It might change the way you do business and will increase your bottom line profitability!

Dave Ramsey’s Entreleadership: Enhance Communication

by Dave Ramsey

“What we’ve got here is a failure to communicate.”

You might remember this quote from the movie Cool Hand Luke. While it’s one of the most popular and often-quoted lines in movie history — and it might even make you smile — there’s nothing funny about a lack of communication within your organization. As a leader, it is your responsibility to intentionally and deliberately create a team culture where there is consistent communication at all times.

Communication is the grease that keeps the gears of your company moving, and without it team members feel detached and insecure. When they feel like they’re being left out, they can start to feel like they aren’t involved in a worthwhile venture. Just as bad, they begin to question their value to the company.

With that in mind, here are five practical steps you can take to create a culture of good communication within your business:

• Avoid “mushroom communication” – People want to know what is going on and why things are happening, even when situations are going badly. Still, many leaders use what I call mushroom communication. This means they leave their team in the dark, and feed them manure. Bad idea!

• Overcommunicate – When it doubt, share more!

• Establish predetermined goals – Make sure your team understands goals and expectations laid out by leadership. Accountability is a great motivator, so put things in writing and require regular reports of their progress. Remember, a culture of uncertainty creates fear. And fear develops quickly when good communication is missing.

• Foster unity – A team isn’t a team unless it has shared goals and visions. Create a mission statement, and have everyone memorize it. Personal mission statements help ensure what you’re doing is consistent with your life and career goals.

• Practice thoughtfulness – Avoid knee-jerk reactions, and never try to communicate with your team when you’re angry or upset. Also, communicate in ways that will ensure people are educated and enlightened, not harmed or embarrassed. Remember the Golden Rule? Handle issues the way you’d want your own issues addressed. Otherwise, people will lose respect for you and question your integrity.

The greatest problem in communication is the illusion that it has been accomplished. Communication should be attempted early, often and should be an everyday requirement on all levels in the workplace!

Free Resource

Knowing how to keep your business profitable is more important than ever.

Download our FREE e-book today and learn how you can keep your business running well for years to come, even when other businesses fail.