Feb. 13, 2025
Ep 26 - Stop Charging by the Hour! How to Price for Value & Bigger Sales
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This episode emphasizes the significant value of small service calls and how electricians can transform their approach to them. By focusing on building relationships, understanding pricing strategies, and offering greater value, electricians can escape being seen merely as a commodity and secure long-term success.
• Small calls can lead to repeat business and customer loyalty
• Importance of understanding customer pain points to provide better solutions
• Differentiating through value rather than solely pricing
• Success story of Justin's journey from fear to financial growth
• Strategies to assess and raise your rates effectively
• Empowering electricians to embrace their expertise and communicate value
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WEBVTT
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Hello, hello, hello and welcome to the Million Dollar Electrician podcast, where we help home service pros like you supercharge your business and spark up those sales.
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I'm Joseph Lucani and, together with my co-host, Clay Neumeier, we're here to share the secrets that have helped electricians sell over a million dollars from a single service van.
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Now it's time for sales, it's time for scale, it's time to become a million dollar electrician.
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Hey you guys, and welcome back.
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I didn't say hello, hello, hello that time, but it's not all about me, welcome back.
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We've got a great show, joe, I'm pumped.
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Today we're going to go more into the small call and more into how your pricing is relative and how the pricing creates the next kind of problem and you have to increase your value and how we could build value in these all important small calls that many of us need to build deep relationships with clients.
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Brother, are you ready to jump into that with me today?
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I'm so ready and I can't wait to get into this, because really that's the whole key.
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You know, people start and say, like how do I get involved and get these big tickets?
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Sometimes you don't start by getting a big ticket.
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It's proving your worth on the small ticket.
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We're going to tell you exactly how to do that today.
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I love that and we've got a great win of the week and we've got a value piece for this, a free tool that we're giving away, and so if you haven't got our price tool yet, you're going to be able to find out how to, on this episode, stick with us and let's start solving this.
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So I'm going to start with one of my favorite ways to open up a topic and just say Joe, you know how and you already know it's coming.
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You know how you get these calls and what do we want to stick to today?
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Like a trip GFCI, like the simplest of simple.
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So so, like the real thing is, I'd like to stick with something that's even simpler, because the customer doesn't call for the trip GFI.
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Usually they call for a fault that we, as the electrician, associate with the trip GFI.
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So I'm going to take it a step further.
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All right, customer calls in the notes and says my kitchen countertop circuit isn't working.
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I've checked the breaker, breaker's not off and my microwave doesn't work.
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There's got to be a short, come fix it.
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Yep, that's the call right, that's the one.
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Your spidey senses are tingling as an electrician like you can feel the electrons creeping around your body and part of you wants to solve this call on the phone because you know what's about to happen.
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Next, you've got to drive across town.
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You now know where this person is.
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You've got to go to their house.
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Maybe that takes you 15, 20, maybe for some of you it takes 20, 25, half an hour.
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I mean some areas of of the greater urban centers.
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I mean it could take you some time just to get there.
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But you don't want to lose the call, you don't want to set this person off.
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So you've probably even considered troubleshooting this on the phone and asking them to do some basic troubleshooting because of the pains you endure from traveling there, burning fuel, fuel burning your time.
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You've already got the troubleshooting mapped out in your head.
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You know it's going to take you five, 10, maybe 15 minutes to solve this.
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And the bigger problem you're focused on the entire time is how am I going to cut my $150 an hour into three pieces or worse?
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Maybe you've got a half hour rule, maybe you have a one hour rule, but either way it's going to be cutting my rate or pissing off this homeowner telling them that I have to charge a minimum rate and knowing what that problem is and knowing I don't know how, or I haven't found the way, or tire kickers don't like, or we, you know we tend to start blaming the environment and there's a couple problems in what we're saying already and I know that we're getting you revved right up here, joe.
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You're getting me like a ripcord man.
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I'm ready to be unleashed on this.
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You gave us a great example.
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I'm almost ready to hand this over to you.
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But the first problem that I think needs attention, and being that we're pricing focused primarily, is the pricing problem, and the reason why the individual taking this call is frustrated by it in the first place is because, even if they're at 150, or even maybe in your market, hey, you've gone and priced yourself out at $200 an hour as an electrician commodity.
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What do we mean when we say an electrician commodity, joe?
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Really what it is is you've allowed yourself to be associated with the product or the installation rather than the service associated with it, so you're called to serve a use rather than called to create a solution, and that contrast is very, very, very important in how customers perceive you before they even call you.
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So I'm 100% down with that.
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Here's an acid test question that I think people could ask themselves to find out if they're a commodity.
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If a homeowner asks you well, why would I go with you when they're $100 an hour cheaper?
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What do you?
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say to that?
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And if you don't have an answer, does that make you a commodity?
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Well, it doesn't necessarily make you a commodity, but it means that you yourself have a couple of issues.
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One either you haven't had to articulate your value yet and don't know the words to say let's claim ignorance.
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You don't know how to articulate your value yet and don't know the words to say right, you just claim ignorance.
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You don't know how to articulate it.
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Okay, that's a possibility.
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It could be a confidence issue.
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There's a lot of people who will give discounts to avoid hurting their ego.
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That way they can still get the sale without having their pride hurt.
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It's another thing.
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Their pride hurt, it's another thing.
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And the last is that actual problem where they have been trained by the industry and the industry says the parts should cost this, double the cost of the part.
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You should have your labor hour right there.
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But it doesn't work.
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When you got a $35 GFI it's like great I'm charging $65 an hour.
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Glad to know this is carrying and paying the bills.
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Anyone can go to homedepotcom and figure out what that GFCI is worth.
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The commodity electrician is the person on the other end of Home Depot installing a $35 part and doing nothing else.
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And that's the real shame.
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If anything like if you really think about it, the best way to describe it is known as a self-fulfilling prophecy.
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Can I touch on plan A and plan B and kind?
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of describe what I mean by that.
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Let's do it Okay.
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So let's say we talk about this customer or this electrician we're dealing with currently.
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He gets the call, he immediately assumes trip, gfi.
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I mean, what electrician wouldn't?
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Countertop not working in my kitchen, breaker's not off, my microwave doesn't work?
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Yeah, okay.
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Checks out.
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So the electrician mentally says, ah, it's going to be a GFI Maybe.
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He asks the age of the home.
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Oh yeah, it was just built.
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It was just built in 2024.
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So you're like brand new home, tripped GFI.
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There's probably going to be nothing there.
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So this person shows up and because they're focused and they already think they know the problem, they go right to the problem and their goal is to get in and out as fast as possible to prevent their loss of their time.
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Hey, if I can do this in under 30 minutes, I can get in and out, get my 150 and bomb away on my next call.
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The thing is, is the reason why I call that a self-fulfilling prophecy is because they're focused on just solving that immediate issue and not learning of how it is emotionally affecting the client or offering other services.
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The value stops there.
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So because they're trying to rush, they're not going to be doing the full process, they're not going to be building the relationship, asking the questions, exploring the other things.
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So, as a result, the customer sees them as a commodity.
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Guy came in, went right to the thing, pressed one button, handed me a bill.
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So that same customer now doesn't see any value in you because you yourself presented that way.
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So now they argue with you about the price and you are now thinking I, freaking, knew it.
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I knew before I even got to this call.
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I knew when I rolled into the driveway these people were going to give me a problem.
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I'm just not going to take any more trip GFI calls or I'm going to establish a minimum charge.
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But you, the electrician, caused that.
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So here's part B.
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Here's what we should do to actually diffuse that entire problem before you get there.
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Stop diagnosing it over the phone.
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Stop mentally diagnosing it on the van.
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Stop diagnosing it until you physically see the problem, because you're poisoning your own thought process.
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How do we not know that there's something more involved?
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We can't just assume this GFI.
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So what we do is we're going to create the relationship.
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We're going to go to the panel, we're going to explore the circuit connected and the device and figure out what tripped it in the first place, we're going to be there for about an hour doing an exploratory visit and then we're going to create a range of solutions and clearly explain the pro and cons.
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If the customer still chose your bare minimum, there's no shame in that, but at least then they chose it with the comparison of all the other things you could have done.
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But more than likely they're not going to take the minimum.
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So offer the solutions, create the value and you'll be rewarded for it, maybe not on every call, but on the overall calls you go.
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You'll have more sales and more satisfied customers and less headache.
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I agree, and a couple of things stand out in my mind right off the bat is, instead of being the all knowing expert even though you are you do that, that ability, you're the electrician here, you're the master electrician, you're the person they call, you're the authority, you're the subject matter expert.
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But that doesn't mean you should act that way and instead just flip that and be a curious student, not of I'm in your home to learn about electrical theory.
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You've already done that, you already understand enough.
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But in the sense of I'm a curious student to these people that I'm serving and this home electrical system that I've never seen before.
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And by taking that approach, I think you find a lot more fruit.
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It's something you said that made me think gosh, that's a commodity.
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You said, basically, a company gets call, electrician shows up, electrician solves thing, electrician invoices for thing, and I thought, gosh, isn't that the residential construction?
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Just speaking right through that, and most of us here if you're listening to us, whether this is your first time or any length of time that you've joined us here uh, a, we thank you, we love you.
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This is why we do this thing.
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Uh, we just keep showing up and helping any way that we can Um but B.
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It likely means that you already have an opinion of residential electrical, because I don't think there's any greater commodity competitive market.
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It's right there, with the worst of the worst, like you can race to the bottom, to the end, and, and so most of us are trying to escape that by taking part with uh, with an enterprise such as this organization, a podcast like this, to actually use service to be something more, and so the big suggestion that we have to move into, not just with what joe said on how to actually create value, but that's actually the answer to the next problem that we need to create for you, which is the 150, won't actually float you in service.
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I actually want to change my call to action because in the past we've talked about pricing.
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I think we've been really forward, joe, about asking people to raise the rate, and I want to give us credit because I think that in the history of coaches and trainers and people saying, hey, raise your rate, there's been so many people, including myself at times, who have just said it arbitrarily, and you listeners, viewers, deserve better than that.
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So, on today's call, I don't even want to ask you to arbitrarily raise your rate to 300.
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I'm just going to give you the power of suggestion and knowing that the successful electricians in our groups, within our ranks, the ones that, hey, we're about to talk about, win of the week here with justin and his great month of january, even during a slow time, those are the guys that figure this out.
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They do their own math, they use a proven tool to do it.
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It adds, adds up.
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There's no argument at the end, and then they feel the force of needing to learn the value.
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So when I say I'm shrinking my call to action today, joe, what I mean by that is don't raise your rates, don't do it, but get our free tool and make your own assessment.
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And make your own assessment.
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Just be a student of pricing for a day, put your own numbers in and you tell me if the money's been adding up in the account.
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In fact, you don't even have to tell me, tell yourself.
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If you just do this thing and become aware of it, then it's just a matter of how many of these calls you go on before you realize okay, this isn't working out for me, okay, I'm going to need to do something.
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And then that next thing, that problem that Joe's helping you solve here today that Justin's done very well is how to create the value and the choice for every customer so that they could actually choose you, even when your rates now double or 50% or somewhere in between higher than it was before.
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I mean, I've seen people 3X.
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Anything to add to that, joe, or should we jump right into Justin's win of the week?
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I mean.
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One thing I'm going to add is I want to add a personal experience the fear that some people might be going through this because we tell you to raise your rates and there's a concern, there's a fear it's not going to be.
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I can't do it in my market, it's not going to work here.
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I'm a one man show.
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I hear you and I'm not going to tell you to raise the rate either.
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I just want to tell you what I experienced, because I was 165 an hour and we were broke.
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As a joke, we were broke at that rate.
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It just was not sustainable, no matter how much work we did.
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And the concern was we were advised to raise the rate to over 250.
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Actually, it was over 300 at the time.
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We were advised and we literally shit our pants.
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We thought there's no way we're going to be able to do this and we eventually said we'll try by $50.
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No one complained.
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Another 50, no one complained.
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Another 50,.
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No one complained.
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Another 50, no one complained.
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Eventually we got to 385, and we were booked out almost three to four weeks at a time.
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So the point I'm trying to explain here and the only reason I'm making the comparison is I understand what you mean when you're afraid and you don't think it's going to work.
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I thought people were going to literally have catapults outside of my shop going to work.
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I thought people were going to literally have catapults outside of my shop just throwing generators to my windows.
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No one did so.
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The only person that is really worried about this happening is you.
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You're the one person.
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Your customers aren't going to be that person.
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You're going to be that person.
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So get out of your own way, just like we've had to learn how to do, and you'll find better results at the end of that road.
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I can tell you for a fact in my area hey, it's 2025 here too, and I know there's electricians that are subbing, subcontracting under project electrical companies for 130, 135 an hour as a blend rate.
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That includes your journeyman, your tools, your van, just to show up at site 135 an hour, work 40 hours a week, and some people are happy with with that as a business relationship and really as a future.
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I call that a job personally, just over broke.
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You're still on someone else's schedule, you still have really only one customer and if that customer decides they don't like you, you're back to pounding the pavement looking for one more to to fill, you know, to put the food in the fridge and the food on the table for you and your family.
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I can't blame you, for they're highly secure.
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But also, what does that mean for the service game?
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There's's no way, like Joe said, that you could go from the $130 or $135 to $165, because now you're on your own and think that that $35 an hour was even going to cover your marketing budget to get two to 500 customers through the door this year.
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There's no way and by the way, guys, I don't say this to scare you, I know we're going deep on this, but man, what a beautiful thing.
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Services.
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I don't say that to scare you, and what I mean by that is getting customers doesn't have to be scary.
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Serving three to 500 people a year is an awesome goal and you should all try it, and you should aim to get 60 to 80 percent reviews on that, on that service too.
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And imagine what would happen if you did that.
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And imagine if you could learn to go from 165 an hour to 320 an hour and the difference that would make on your account, on your ability to grow into the future.
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Imagine that through our price tool, give that a shot.
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All you guys got to do is reach out, and anywhere where you heard us on our website at service by electricianscom facebook.
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We're super active on our accounts there clay newmire, joe lucan, you can find us there.
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Instagram claynewmire you can find us there.
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All these places you have to reach out and if you send us just the code word price, we're going to send you this price tool so that you can see it for yourself.
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Let's talk about Justin for a moment, someone who got their pricing right.
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I literally pulled up Justin's notes when he decided to join forces with us and jump on board.
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Justin was doing about 25 to 30K a month one-man operation really early in his company.
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He was interested in hiring a CSR and potentially a journeyman installer to grow his business and he really wanted to jump into training.
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He was curious on our silver programming which offered much, much higher touch and had a 50K guarantee attached within that six months had a 50k guarantee attached within that six months.
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What I'm happy to report is that in january, usually considered a slow month, joe justin just reported 95 000 in sales.
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I absolutely love that, and the thing that blows my mind there is that, as an electrician who was really afraid of slow season and did everything we could to build against slow season, january and February were scary times.
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They just were.
00:18:54.376 --> 00:18:57.323
And to know that not only did he what is it?
00:18:57.323 --> 00:19:02.318
Triple where he was at, but that he now has a record amount.
00:19:02.318 --> 00:19:12.476
This was the best I've ever done in primarily the slowest month of the year, where everyone's looking back and saying, yeah, well, there's Christmas, and looking forward and go yeah, there's taxes.
00:19:12.476 --> 00:19:15.343
And he closed 95,000.
00:19:15.343 --> 00:19:17.895
Guys, are you hearing this in the background?
00:19:17.895 --> 00:19:21.011
And we're literally starting off and saying you can do this too.
00:19:21.011 --> 00:19:23.584
That's why I'm getting so jazzed and excited about it, because we're literally starting off and saying you can do this too.
00:19:23.584 --> 00:19:27.519
That's why I'm getting so jazzed and excited about it, because we're literally giving you the keys to the handcuffs.
00:19:27.519 --> 00:19:31.441
If you want to get out, start closing $95,000 months.
00:19:33.070 --> 00:19:37.221
And speaking of keys, Justin recently got keys to a new shop.
00:19:37.221 --> 00:19:49.340
He has that CSR in place and would not turn and go back and he's got help in the field now, Although Justin did himself sell all 95,000.
00:19:49.340 --> 00:20:09.597
It's so, so fun to think back just six months prior, seven months prior, to the person doing 25 to 30 K months, and if you ask them if they thought going into January they would do a 95K month, the answer is always no, Even though, hey, 50K guarantee was there.
00:20:09.597 --> 00:20:13.496
He felt it, he knew we're gonna get up there, we're gonna see some bigger months.
00:20:13.496 --> 00:20:18.301
Just an incredible, incredible stamp on his journey.
00:20:18.301 --> 00:20:20.978
So really pumped to share that with you guys.
00:20:21.330 --> 00:20:31.359
If you want this price tool, please let us know by sending us that keyword price wherever you found us, and you can always leave us a review on this podcast that helps other electricians find us too.
00:20:31.359 --> 00:20:39.473
If you wanted to keep us for yourself, I could understand that, but it's in the best interest of this rising tide that we share this with as many people as we can.
00:20:39.473 --> 00:20:48.674
If you know someone that needs to hear this podcast needs to get their pricing right and start to solve these small calls.
00:20:48.674 --> 00:20:49.698
That'd be a great place to start, Joe.
00:20:49.698 --> 00:20:50.961
Anything else to add to?
00:20:51.001 --> 00:20:51.804
this one before we cut them loose.
00:20:51.804 --> 00:21:01.916
The only thing that I want to add is that there may be one person that's sitting here on the fence and maybe you think I'm speaking directly to you and I am because in the background you're trying to figure out.
00:21:01.916 --> 00:21:05.623
I know I need to change and I have no idea how to do it.
00:21:05.623 --> 00:21:21.172
I know I need to go there, but I don't know how to do it, and I want you to know that that gap feels insurmountable, but the actual steps retired to get through it are actually quite minimal, and we want to help you through it.
00:21:21.172 --> 00:21:22.953
We truly do so.
00:21:22.953 --> 00:21:26.798
If you're in that place personally, send me a message, message Clay.
00:21:26.798 --> 00:21:29.642
I want to see you out of the hole.
00:21:29.642 --> 00:21:32.424
We want to see you thriving in your best self.
00:21:32.424 --> 00:21:42.796
So the one last bit of advice I want to give is, even if you don't trust yourself, trust the process and trust that good things are coming in your way.
00:21:44.641 --> 00:21:45.261
Love that brother.
00:21:45.261 --> 00:21:46.493
We'll see you guys next week.
00:21:46.493 --> 00:21:48.339
Cheers, Take care.
00:21:48.339 --> 00:21:53.798
And that's a wrap for today's episode of the Million Dollar Electrician Podcast.
00:21:53.950 --> 00:21:58.258
We hope you're buzzing with new ideas that charged up to take your business to the next level.
00:21:58.450 --> 00:22:03.030
So don't forget to subscribe, leave a review and share the show with fellow electricians Together.
00:22:03.030 --> 00:22:04.615
We'll keep the current flowing.
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