Ep 211 - How to Introduce Offer Changes to Old Clients

Hello, hello, hello, and welcome back to another episode of Electricpreneur Secrets, the Electricians podcast. Hi, I'm Clay Neumeier and this is Joseph Likani. We're the Electricpreneurs, two master electricians with business addictions. Welcome to the freemium program in your daily coach call. We've got one thing today, one very big thing how to introduce offer changes to old clients. This seems to be a real stumbling point. And guess what? The investment for this call for you, free, you get to take this. Just promise to take everything we give and take action with it. It's totally fair to use everything you're about to hear here in your business to your advantage. Just promise to also report the wins back to us and we'll be too, too happy to help you with that. Joe, how are you doing today, brother?

I'm doing great today. It was had an awesome class. I feel like we had a really good start to the day. Energy is doing well. We're both recovering from being sick. Life is good and it's a great day to have a great day.

Yeah, I don't know about like fully recovered, but I'm in the stage change. I went from sore throat, barely sleeping, to now just kind of congested, which is a welcome change, man. I'm in stage two of that cold. So, yeah, pumped up, got a little dayquil energy in me ready to run for these guys.

I'm with you as well, man. It's literally one of those things where you know what. It doesn't matter how sick you are, but when you have your energy back, oh, isn't it such a game changer. We're like oh, I can actually decide to move today. It's a good idea.

Totally, man, totally, totally. You know what I'm excited about this topic. Here's why, okay, I myself have experienced this, you've experienced this. How many of us have experienced this? Where we have kind of the old clients that we fear losing, we kind of hang on to and we're really adverse to change in how we deal with them, even when we upgrade to more options, even when we get our pricing right, even when we're adding club memberships, let's say, or any of these other offer pieces that we train. Joe, can you help me speak to this a bit?

Yes. So the main fear point usually comes from you don't want to lose what you feel you already have in that. Let's say, year one, you worked with this client. You were cheaper, you were newer, you were green as a garden hose, you were ready to go, you wanted to serve bread eye and bushy tail and as a result, the customer worked for you. They're like yeah, you know what We'll sign, you could be our electrician. But your business grows year after year after year, your service grows and as a result, so do your rates. So do the things that do when you need to change how you serve your clients. But when you're in that place people are like I don't want to implement new changes with this customer because if I put changes in they're not going to want to hire me and I'll lose the longstanding business that I had with them. But it's the wrong way of looking at it.

And can I just say, like quick time out here A lot of times, especially when we see in our rate changes, when clients come into our program and realize, holy shit, I can't be at 130 an hour, I ought to be at 296, 343, 425. And then you hang on to the 130 an hour clients or we see this with, like the time and material versus flat rate. If this is a real big upgrade for you and you're still time and material for some of those older clients, you got to recognize that that is digging a hole and what that's consuming in your schedule. If we don't fix that, you're going to be maxed out so much sooner with your potential because it's just working, it's overworked and underpaid. It's the same old problem, right?

Yeah, and it's also a scarcity mindset where you have this fear that let's say you have 10 clients and three of them are legacy clients, their original year one clients. You're worried that if I give up these three clients I won't get three more. And that's the biggest issue because if you've improved the way you're serving your client then theoretically you should attract more business, not less. You're not raising the price and then just doing the same work for more expensive rate. That's the kiss of death. You're raising your rate with the promise of increased or higher levels of service, so that shift needs to happen before any change happens right, totally, man.

And then it ties back to what we were talking about yesterday, where people tend to fear that price increase or having change with old clients just because of that scarcity mindset that you're mentioning. But what that leads to is it's a symptom of a different kind of problem. It's like if that were actually the case, if everyone's going to abandon me because of my service improvement A do I need to market more and just get more leads? But B how realistic is it that we actually lose people? I mean, if they're really in this with us, there's got to be a way, right.

Yeah, and realistically this may sound a little weird, but even if they did drop off and they left you, you'd still be better off. And the logic is this let's say we're in that situation where you were previously 130 an hour time of material and your new rate is going to be at 315.295. Just considering the drastic difference in the two rates, you taking on that job actually would cost you negative money. You would be losing money just doing the job. And the problem is is that it takes your mental bandwidth, your emotional bandwidth, your physical time, takes material. It takes you delegating away from improving your processes. You literally would probably be doing a better job for all of your clients if they didn't hire you at your old rate and ended up just disappearing and riding off into the wind and you took that time and reallocated it into business development and growth. Or you're going back and reserving the clients you already have, so one. We're going to tell you how to keep from losing those clients, but I'm just addressing the elephant in the room and saying, even if you did, you're really not in a bad situation. You're probably better off.

Yeah, that's hard to see it that way, isn't it? Like humans are infinitely capable of recognizing what we lose when a door closes, but inversely like we're infinitely incapable of recognizing what doors open when we shut the old one.

Because it's almost like we're good at looking in hindsight but not looking in foresight.

Totally Couple. Things we can't do right, we can't read minds and we can't predict the future.

If we could, we'd be a very different kind of consultant.

It would be different. It would be different men for sure. So this takes a bit of faith, for sure. But what are some steps then that we could take? Let's say, price increase. I'm going to move from maybe I'll add some complexity I'm going to move from time of material to a flat rate with a price increase. And now I'm offering options. Joe, should I? Just kiss this client goodbye.

No, I'm excited. You can tell the hands are rubbing together, knuckles are cracked and I'm ready for that one.

I was going to say I think I heard a full knuckle crack there.

Oh yeah, that was it Right, my apologies. So I got excited on this one, because the three things that you just suggested are actually very easy to justify, right? Because what's the difference between flat rate and time of material? Time of material is I'm going to walk into the customer's home and I'm going to punch the clock and if they're talking to me, the clock is running. If I'm working, the clock is running. If I'm getting material, the clock is running, and it's very unpredictable. And because it's very unpredictable, the client often doesn't make premium choices. They're in a position to where they're like well, I don't know what this is gonna cost, get it done, let's get the cheapest price, because that's really all they can get and a couple other factors there, if I can just add.

this is usually a situation where people start then trying to quantify their travel time to the client's house and charge for that, plus fuel, plus you know all the other crap that we add for charges, but also where a client starts hanging over you watching their watch going. Are you done yet, are you?

done yet.

Are you done yet? If that wasn't justified enough, I just wanted to throw that in there.

No, that makes sense. But when you're going to a flat rate, or at least we consider a set number that we're like here we're giving you this rate that we've calculated that does not go above or below. This is a number we're guaranteeing it's gonna be done by Now the client can make an accurate choice. Because imagine, if you're doing it the time material way and you're like we're gonna do this and it's gonna cost somewhere between X and X if nothing goes wrong, compared to this is what the job's gonna cost in six different scenarios and it will never go up or below these numbers. All you have to do is just make a choice and not be happy to take care of it from there.

Yeah, we take the risk and the best thing I love about this and this entire mindset shift, which is totally a more advanced lesson. But forgive me for jumping ahead. If it costs a little bit more than what you thought, it's okay. It's okay because if you did your pricing right, then you're following what we'd call the casino principle, which is the house always wins. You have to be priced that way. That's how businesses make it. Long term. You need to do everything you can to build this up sustainably and to know your numbers and to stick to them. And that's the beautiful part about flat rate. If the odd one ends up a little off of Teter here, where they win, awesome, this is you're the lottery company and they just won. That's amazing news. They're still getting the great level of service. I had to insert that, joe.

That's all good. I kept the thought so I didn't lose it. The last thing was about the options. Very, very few people are actually offering options the right way. I mean when they think they're doing it, they'll say, oh, I offer one to two or even some of the best. They're like, oh, I do three options, I do the good, better, best model. The problem with going through that is if you've gone from not doing options or doing like proto options to having six solid, three categories, buyer archetypes already mapped out, you can really let the customer truly choose what kind of level of service they want. Because if you can say, here this is the Rolls Royce style, I'm gonna show up in a chauffeur's outfit, white gloves, everything perfect done, lifetime guarantee, all the way down to the very bottom, where I'm like I'm gonna give you a material list, you're gonna go out and get it yourself. I'm coming on a weekend, no warranty, and I'm putting the condom right on the wall Screw that, I'm not even gonna recess it or you gotta open the wall before I get here. They'll get to choose that because they can actually see a number that makes sense that we can stand behind. So just the thought of going through. We're giving you a flat number we can stand behind and we're giving you a range of choices so that the customer gets to choose rather than you having to put it on them and absorbing all the impacts of really time and the time to get there, the time to get material.

All that stuff is completely absorbed in your simple service rates, so they don't have to think about it out of sight, out of mind. And why should they be overwhelmed by that stuff? It's too much. They're not electrical project managers by default, right? Their homeowners with busy little lives that barely had time to get Someone on the phone to get to their house to help them with their electrical needs. I mean, that was the problem in the first place the time it takes and the effort it takes, right. So the more we can absorb that and just help them up, the better the services, the values there, 100%, I agree with you. So how then do we take this old client and now change them to this new style Joe? All right, I love that.

What we're going to do is anytime you implement a change, it has to be seen and presented as beneficial to the customer first. The biggest problem that people do is they say we're doing a price increase and they stop there and they're like up that's what we're doing. Raising rates. It's letting you know starting January 5th 2024 rate will go from 113 an hour to 197 an hour. Please see management for details, right?

and they say why you go? Well, inflation.

Yeah, yeah, it's like all inflation stuff. Yeah, it costs to run a business. So you know what if you rub your shoulder a little bit like you know what?

it is gonna run business. Yeah, that's the big problem.

Instead, imagine presenting it this way, where you go to your customer and you first by start by thanking them. So, if you've worked with them in the past, thank them for the opportunity to work with them and then ask them how they've enjoyed the previous work you've done. So, clay, I really enjoyed working with you and thank you for the opportunity to come back and serve again. Hey, by the way, how's a hot tub that we put in for you last year? You guys got into use it. I've, like you, thought you're going to totally man working great. Yeah. So you're starting with thanks, then transitioning to reminding them of the joy of working with you. It was a good experience and I'm still enjoying the thing you've done for me. Great. Then we get to reframe it as to what better they can also not come to expect from you, such as I'm so excited to tell you about Something because we've actually implemented some changes that are directly going to benefit you and we've put in mind, with you specifically in mind, the reason why I'm doing that. And then you go into it from there.

Yeah, love the excitement. Start like, build energy up around it like I'm, legitimately I believe in this.

Mm-hmm.

How important is that?

That's the first thing, because I'm gonna say the same thing two different ways, which is so I'm excited. I've got some things I want to change. We're gonna make some changes. It's gonna be in your best interest. Just hear me out. Compared to, I am so excited to go through this with you because we started actually making changes with you specifically in mind that are gonna benefit you. So just hear me out, you're gonna enjoy this. Same words two different times, deliver two different ways.

Yeah, the first one made me feel like, hey, the car is on the hill, it's pointed downhill. I'm gonna sit in the driver's seat. I need you to go in front and just put your hands, like this, on the bumper and just just I'm gonna let my foot off the break and put it in neutral that you just hang on to this for a minute. Yeah, yeah, it's like very much. Come in this for a minute. I want to take you for a drive, exactly.

So now that the customer has a sense of interest, we then want to explain how these changes actually benefit them. So the three you mentioned was we're going from time of material to flat rate and also including options right and price price price and price increase. Okay, so Well, here at service of electrical, our goal has always been, as you remember, to do top tier customer service and deliver a high level of quality and reliability, but we found a way that we can even step our own game up. That's the goal we're always trying to get to a five-star service and we realize that there are some things that we could be doing better. The first thing is is that, rather than be so ambiguous over our pricing, we decided to actually just make it really upfront, really Transparent, and give you absolute control over every single way the job can be done. Now, the way we're gonna do that for you is we're actually gonna implement a pricing structure To where you don't have to guess of what it's gonna be. There'll no longer be any style of estimates, it's simply just going to be this is the cost of us to do this particular project that's specifically customized to you, meaning you're not just going to open a book and say this is what it costs. I'm still designing a custom project specifically for you, except this time there's no clock running. If it takes me longer time, that's on me. Just saying that alone does not sound like it's in the customer's best interest.

Totally, you got me man.

Yeah, continuing on from there, what we're also doing is we want to focus more on giving you better levels of reliability and quality and the choices that you get, meaning that we're actually going to sit down instead of giving you one price. We're going to design an absolute menu for you, from the finest that money can buy to the most bare bones you can possibly have. And in that solutions, or in those solutions, what you'll find is the ability of choosing what level of service you want. If you want white glove, butler level, concierge service, top tier, not a problem, we can accommodate that. If you're looking for us to be more like a contractor style, we can do that as well. Or if you want somewhere in a happy medium, that's also going to be included. All you'll have to do is simply just make a selection of what you feel is best for you and your family, and I'll be here to serve. How would you like to proceed?

Awesome man Sounds great. Joe, you've got me sold on that. I'm watching the clock here too. Let me ask you a single question. Sure, back in the day, when you were working in the van, still making sales, looking for material to listen to, catching up on any materials you had, listening to your own role plays, how much did you need to hear a podcast like this? I would have probably literally killed for it.

Because the thing is is that when you feel alone, misunderstood and also isolated, where there were no electrical coaches, they were HVAC, plumbing and multi-trade coaches. That was it. But this podcast allows actual electricians to listen to actual electricians and the benefit is we're going to give you things that, instead of us guessing at, this is stuff we actually did and it's been psychologically proven to work. So if you could tell me that there was someone that's been in my shoes that has this many years of practical hands-on experience that had success and has given me an easy to digest way of absorbing information yeah, I'm on that, I wouldn't believe it's a free podcast.

I think the role plays really helped. Man, I'm so pumped, listen. I want to give out the first action item for today. Very simple, I know this is helpful, hearing those role plays, as Joe just said, we wish we would have had these same tools when we were back running our plays in the van, working with clients, going to the next house, trying to improve your sales process all of the above, especially today. How to introduce offer changes to old clients. If you know someone who's stuck in the time of material, stuck in the old pricing, stuck in their old ways and can't quite grasp this, then I know I'm going to be sending this in the messenger to a few of our prospects, people who have been following along to make sure they've got this. I ask that you share it with them too and leave a review at the service where you heard us first. Joe, do you have an all-star action for these guys today?

I can make one happen. So all-star action. What I'd consider for this particular scenario is it's a belief shift, because the biggest problem that people run into is that they don't believe that the customer is going to want better service if they have to pay more for it. And that just is not the case. And I'm saying this from experience, as both a someone who sold it and someone who's had to buy it. If I was told that I could have a completely seamless experience for something with someone that I liked, trusted, respected and was confident in their ability, and they called me and was like hey, it's going to cost more to work with us, or you can go a tank top Terry, who I know is still doing $75 an hour, I'm going to still go with the provider that I trust. Even if it was on the fence, I still would go with them, simply because I wouldn't want the change. So for all of you out there that are like they're not going to buy, you're fooling yourself and the only person you're hurting is your own pocket.

Yeah, if they're not a fit, let them. Let them wean themselves out. Guys, this has been another fire episode of Electric Printer Secrets, episode 211 how to introduce offer changes to old clients in a way that you can get that price up. One thing is for sure if you could see that money being left on the table, we've got nothing to lose here, right, overworked and underpaid. We can't accept that. So this has been your one thing, coach called today. Can't wait to see you again for tomorrow, friday, to finish the week. Cheers, joe, we'll see you tomorrow. Looking forward to it.