So, here’s a warning tale for my contractor friends:
I recently needed a tow truck, so I dialed the number of a company I’ve used for many years and spoke to the owner. “Tom, Rodney Koop here. I need a tow truck to pull one of my employee’s cars to the service center. Could you help me out with that?”
The reply surprised me: “I wish I could Rodney, but I have five rigs and every one of them is down for repair.” Tom thanked me for calling him, and I called his competitor and got the car moved.
So, does anyone know how a towing company that’s been in business over 40 years can get to a point where all of their trucks are in disrepair? I know the answer is that Tom still charges the same money to pull a car from one side of town to the other side of town that he did 20 years ago.
Stealing Your Own Profit
Now imagine that you’re not billing any more for your services than you were decades ago. If you’re paying a driver, all the associated labor and insurance costs, and gas and oil on top of all that, where could you possibly get the money to repair and maintain the truck itself? The answer is, you don’t. You’re working the trucks and the business to death. Does this sound familiar to anyone? Money equals cash flow and it takes a whole bunch of it to make a contractor successful. But, often, we steal our own profit to cover the bills, burning money in overhead as fast as we can make it.
So, what are we selling to our customers when it comes to home performance? Are we selling cheap, underpriced service like Tom’s towing company? Or maybe we are selling commodities like insulation and doors and windows. A commodity is anything that your customer thinks should be price shopped. If that’s the case, we need high volume to come out on top, but high volume is hard on the equipment, isn’t it? Just like Tom’s trucking, can you possibly do enough tow jobs at a cheap price to make money in a business where the equipment is so expensive? What’s the answer?
Selling Quality Living
Maybe we need to quit selling home performance and start selling high quality living. Yesterday I went to Lowes and spent a little over $20,000 for an entire dried-in framing package for a 1,900 square foot home I’m building for my son. (He will be paying me back.) However, I removed the blown-in insulation from the package before I bought it because I want to seal the attic to keep it clean.
Too many years as an electrician crawling around in attics, I guess, has made me just hate a dusty attic. My plan is to have it encapsulated in closed cell spray foam. It will be much more expensive but I just love a tightly sealed, extremely insulated, super-clean attic, and other people do too.
At my former HVAC company, now owned by one of my sons, we don’t treat insulation as a commodity.
Sell Bigger Services
We’re in the business of ensuring clean, healthy homes for the safety and protection of the family. You see, when a home is leaky the enemy is twofold: No. 1 what comes in from outside? And, No. 2, what does it pass through to get into the home? You see, it’s always about price — until you make it about something else.
So, we use spray foam to super-seal and super-insulate air distribution systems. We seal plumbing and electrical penetrations from the home to the attic. We seal can lights and wall cavities. We make the home air-tight from the attic. We want the air passing through the air distribution system to return cleaner than it went out. That is only possible with an extremely sealed air duct system.
In the field of home performance, it’s time to make it about the health and safety of the family. The good news is anytime you make a house healthier, the byproduct is that it will always become far more energy efficient. But energy efficiency is hard to sell. Health is a no-brainer. People will trade a small piece of their paycheck to save energy, save the whales, save the environment, but they will trade their entire fortune for the health and safety of their families.
It’s always about price until you make it about something else. Make what you’re selling bigger than the cost.