Episode 40 - Service Electrician Success - Beat the Lowballers in Your Electrical Service

@4:24 - Clay Neumeyer (serviceloopelectrical.com)

Welcome to Entrepreneur Secrets. I am your host Clay Newmire with my esteemed co-host as always Mr. Joseph the sales bot, Lucanie. 

Today we've got a great topic that's going to continue our mission to help master sales simplify pricing and deliver premium level service and I said that wrong so let me correct help you master sales simplify pricing deliver premium level service.

As you can tell if this were your first exposure to this podcast ever we have skipped the fancy shit in favor of just helping you getting out there with you so no matter if you're behind the windshield of your van if you're sitting in an office currently working with a client maybe you've got the tools on headphones in the ear whatever your situation we're trying to bring some really tactical and strategic value for you guys to follow today 

And today is no exception none no exception we've made today we're talking about a very specific product

problem. A conversation that occurs quite often is why service won't work well in my area or why pricing at these proper service sustainable service rates won't work in my area.

And today's objection specifically was really when someone comes in and undercuts in your area. Joseph, have you ever had someone in areas that you've served coming in around 60 to 75 dollars an hour?

@6:30 - Joseph Lucanie (Fathom)

Oh yeah, I love I love coining those terms though those are tank top terry, chuck on the truck. I mean all these names come up but realistically it never really was a problem.

It only became a problem when we operated on a similar level because if you think about it most service companies operate differently than construction companies.

A construction company is I'm going to wait till the phone rings then I'm going to get to that customer.

I'm going to give them the lowest price to seure work, and then we're going to build options in addition to that.

That usually doesn't work because if I'm at $100 an hour and this guy's at $60 an hour, we're going to be only able to provide a similar level of service.

And it is the apples problem. You're right. If it is apples to apples, wouldn't it make sense to go with someone that's giving you a lower price for the same service?

Will we blame our clients for doing that?

@7:31 - Clay Neumeyer (serviceloopelectrical.com)

100%. And if, I mean, in any business, let's just go 30,000 foot view business, you know, one-on-one business strategy, it is a strategy to be a low cost provider.

But, but huge but here, in order to be a sustainable business, you'd have to do one of two things.

A have zero overhead. No expenses running out of a shed with a putt-putt truck and barely, you know, money in your pocket.

to a thing or a high volume provider with exceptional efficiency is in place. That's the only way to do 

@8:07 - Joseph Lucanie (Fathom)

Both, both are hard to do. I mean, like anyone who's been the putt putt driver.

I mean, it's not easy to do. My first van was like a $2,000 van. Um, actually, yeah, Ford Grum in 1980, no seat belts, no steering, a car, car conditioning, like, yeah, I, I get that.

I understand what it's like being that contractor. And I just

@8:32 - Clay Neumeyer (serviceloopelectrical.com)

Llike this show you skipped all the fancy shit.

@8:36 - Joseph Lucanie (Fathom)

Yeah. Well, literally just like right, right to it.

@8:39 - Clay Neumeyer (serviceloopelectrical.com)

It gets the job done.

@8:40 - Joseph Lucanie (Fathom)

Yeah. It gets the job done. But the problem was is that you end up being in the same box as your competitor.

And that also forces you on the level of service you can provide. When you're only charging a hundred dollars an hour, you really don't enjoy a callback.

A callback doesn't become an honor to do it becomes an utter burden to do.

@9:03 - Joseph Lucanie (Fathom)

You know, being willing to come back to present your solutions to the customer becomes a burden because every time you have to fire up the van, it costs more money than you may actually get.

You know, it becomes a burden working with the customer because the moment they have a single change order, your entire profits are lost out of the broth.

So you're really capped. The thing is, is to also recognize that if your hand cuffed, what's happening to your competitor whose operating less than you as well?

Where do you think they're going to be at?

@9:33 - Clay Neumeyer (serviceloopelectrical.com)

Yeah, exactly. And so I feel like the general perspective here is that, okay, if there's a low cost provider in my market, then I lose.

There's nothing I can do here to fix that. Excuse my beeping. I'll get rid of that one.

@9:51 - Joseph Lucanie (Fathom)

That's all good. I actually feel it's not the case at all, right?

@10:00 - Joseph Lucanie (Fathom)

Realistically, when you look at the situation, you say, there's nothing I can do. You have to shift your thinking because there's nothing you can do the same as what they're doing.

But service requires you to do things at a higher level, right? What you want to do is, if you were going to be an apples to apples situation and you couldn't be more than 100 dollars an hour, why not become 200 dollars an hour and be able to say, I'm able to provide a drastically superior service to what you'd be receiving from the other person.

Meaning things like, you know what I can do, instead of just emailing you a quote, I'm going to take the time to design a range of choices that I was able to accurately figure out.

And I'm going to physically drive to your home and I'm going to walk through every option step by step.

And I'm going to take an hour to two hours, if needed, to make sure that you fully understood what you were getting.

And then I'm going to offer you financing choices at the end. And then we're going to give you a scheduled date because we have an office to support it.

Now you're in a position where this guy couldn't do anything that you're doing. And if you can't do what you're doing, how can you be expected to match his price?

@11:14 - Clay Neumeyer (serviceloopelectrical.com)

Yeah, it becomes that apples to oranges comparison.

@11:18 - Joseph Lucanie (Fathom)

Exactly. And some people say apples to oranges. I've always liked apples to corvettes. Because it's something that you want to be like, it's so drastically different.

It's not even in the same. It's not even fruit. It's not a vegetable. It's like this is just something completely different than what you'd be receiving from someone else.

@11:36 - Clay Neumeyer (serviceloopelectrical.com)

Yeah. And I'll go on a limb here and add something to that. I actually want my price to be three times what there's was.

@11:44 - Joseph Lucanie (Fathom)

That makes sense.

@11:46 - Clay Neumeyer (serviceloopelectrical.com)

And there's a psychological reason for that. I want the price alone to take part in the play. And it's not saying that we are a maturely razor prices.

But if said person really is at 70 bucks an hour, is it on your own? for me to have a rate that could be 210, 250, 300, as a sustainable service company?

Absolutely not, right? Some people, when they discover their service rates and what it truly is, as a foundation to that sold rate, is actually experiencing something we call price shock.

Where they see it and begin to have self objections over how is this going to work? How am I going to sell that? That's really what we're talking about now. 

@12:24 - Joseph Lucanie (Fathom)

Yeah.

@12:27 - Clay Neumeyer (serviceloopelectrical.com)

But if you were three times the price of the guy that came earlier, what happens in the mind of that consumer, that client?

@12:34 - Joseph Lucanie (Fathom)

It's a big question. And the first question is, why are you more? And I love when they ask that question because if you were like, just take a argument here.

Let's say they were $75 and you were 140. It's too close. It's too close. They could simply say, you know what?

You're just a bigger shop. You've got a big Roverhead. You got more vans. I get it. You're a little bit more.

We're going to go with Ricky. Insread, if you were $380 an hour, they're going to be like, all right, what the fuck am I getting with you that I'm not getting with this other guy?

I'm curious. Where did this number come from? 

@13:08 - Clay Neumeyer (serviceloopelectrical.com)

Yeah.

@13:10 - Joseph Lucanie (Fathom)

And you know, I love, I'm glad you asked and I'd love to tell you. And then you can describe giving them all the things that your company is able to provide that that other company could not.

@13:21 - Clay Neumeyer (serviceloopelectrical.com)

And they've asked you for it. It's a magic moment. You've got permission. They're listening. It's time to drop the magic.

It's awesome. And if you say something at this point that's already in their head, an assumption that they have, like time delay, quality, effort and sacrifice, permitting, safety, right?

There's all these categories that we really call the service sex convenience. Big one, right? Why 7-11 can sell milk and eggs?

There are things that people literally pay for. And to back this up just a little bit further, when people say, well, it won't work in this area.

I always feel the need to remind that we don't serve an area. I mean, we do technically, but you still serve a person in an area.

@14:09 - Joseph Lucanie (Fathom)

Mmm-mmm

@14:12 - Clay Neumeyer (serviceloopelectrical.com)

And people are people.

And all their needs, desires, problems boil down to the same things. And depending where they are on their values journey, they're going to pay extra for that experience.

@14:23 - Joseph Lucanie (Fathom)

And if I can say something to that, for any of you guys that are listening to it and saying, yeah, but you've never sold where I sold.

I just want to give you a quick heads up as to the industry in the area that I was in.

So on one area of our town, we had the reported forest city in the country. It was the city of Curistrol, the ultra orthodox acidic community.

They were reported the poorest city in the country. On the other side of town, there's a city of Newburgh, which is the highest murder per capita in the country.

And yet we were still selling at a. over $380 an hour. And the question is how? The reason why was exactly what you said.

We were serving the people, not the area. There's always someone, no matter where they live, that says, you know what?

I don't want to be treated like shit. I want to be treated nice. I want someone to really respect my home.

I want someone to treat me with the dignity I feel I'm entitled to. And when you serve that customer at the highest level, they're not going to keep it to themselves.

They start to tell other like-minded peers. They share what you do and why you do it. Those customers become your number one avatars.

So in a very short period of time, you'll find you're connected with that whole industry. And who cares if Shmaka Naturak is getting, getting all the low bids?

They're saving you the trouble of having to work with customers that aren't going to be working with you in the first place.

So now you have more opportunity to serve those who will.

@15:57 - Clay Neumeyer (serviceloopelectrical.com)

The reality is it's not sustainable for them. Like I said, and to tie that back together, like one of the situations where that higher volume low sustainability that model comes into play is, as you said earlier, where construction companies begin taking on service work.

In fact, when new people break out in service, this is one of the areas I suggest as a quick multiplier to your client list and your ability to get work is if you're exhausting all your other resources and efforts banging on doors, doing the hangers, being strategic with utility companies is the very things that we've discussed in the past.

You can also approach the bigger construction companies that are getting service calls because they are likely sending people out for $90 an hour, $100 an hour.

And on these little diagnostic or demand calls, they're losing their shirts. Definitely not making anything.

@17:00 - Joseph Lucanie (Fathom)

Right. And that's one of the things is that so many of us started business, not really as business people, but as electricians that didn't want to work for our current providers.

So if you think of someone that's in new construction and they're like, you know what, this is what I know.

This is what I was raised in. This is the industry. I understand. I know how to bid. I know how to quote.

I know how to do. But the moment that they take their $95 an hour time material bid and they try to apply it to residential service, it doesn't translate.

And they end up feeling like, well, I have no choice. I have to go back to it. When really, if you had simply understood how to market and serve at a service level, you'll find that you should never even a new construction in the first place.

@17:41 - Clay Neumeyer (serviceloopelectrical.com)

Yeah. Yeah. Fully a different business model.

@17:46 - Joseph Lucanie (Fathom)

Completely different.

@17:47 - Clay Neumeyer (serviceloopelectrical.com)

And for that reason, quite often when people come our way and they have a mix of the two, we do have to create division in that business because of separate training.

It's different estimating. The whole thing boils down to it. differently. As we know, a service electrician and a construction electrician have a different set of skills.

And it's typically around how they serve people and understand that pricing structure.

@18:11 - Joseph Lucanie (Fathom)

You know, a good mental image is, I'm sure you've seen it as well, you ran so many projects in your career.

Think of a project electrician and say, what is that person wearing right now? Like I can picture they got the backwards hat.

There's music playing on their phone, they may or may not be wearing the uniform. And you know what? Probably enough of a gas station food all their lives.

So you take that same person, you try to put them on a service call and you wonder why he's not successful.

It's a completely different model. It doesn't translate the same way.

@18:46 - Clay Neumeyer (serviceloopelectrical.com)

Yes, I would agree with that. And just specifically on like imagery and vision, I would more liken a service electrician to a professional and a intentional

I don't want to say salesperson, but salespeople will always dress nice. They'll always dress the part They'll always show up to make the best first impression and I agree with you a hundred percent People on projects.

You don't have to worry about that Because that job is gonna be there for the whole week month year, right?

It just keeps coming back and it's just trading your hours For money, that's one of the things I hated about projects We're on a bit of a tangent here But so much is based on the hour and not the value you put in the hour

Joseph Lucanie (Fathom)

 I Agree you don't get paid for the thing you do you get paid for what that thing is worth That really is what all business comes down to at the end of the day 

Clay Neumeyer (serviceloopelectrical.com)

But that brings us right back to where we're at because that's kind of the conversation we're having Mm-hmm little tank top terry as you said nice fella weird tan lines If he's hourly and he's low balling his pricing

There's actually a lot you can do, including what I want to tie into our action pieces really for today.

Because you've got a lot to gain from that person. And really the wake they're leaving of, I want to say like insufficient value exchange.

@20:20 - Joseph Lucanie (Fathom)

Correct. I've got a bunch of things off top of mind that I think would be things that people can use.

Do you mind if I just start firing off? 

@20:24 - Clay Neumeyer (serviceloopelectrical.com)

Yeah, do it.

@20:27 - Joseph Lucanie (Fathom)

So if you think of what the typical contractor is doing, it allows you to have the thought of what are they also not doing at the same time.

So if your contractor is charging anywhere from $65 to $100 an hour, the odds are, is this a permanent job?

Probably not. So the thing you can do is say, here at our company, we do a completely turnkey installation, meaning that we are going to do all the permitting on your behalf.

We're going to file for it. We're going to gather everything. We're going to submit it on your behalf. Also, we're going to coordinate with your utility company. You're not going to need to be home. We're going to be present. We're going to support.

We're going to do that coordination. If there's any digging, how many times do we go into a situation? And the guy is like, yeah, you dig it, and I'll drop the wire when I'm done.

It's like, no, in this option, we do all the trenching for you. And I say trenching an excavation, not digging, because anyone could dig.

But it takes a professional excavate. So even the words are intentional. And saying, we're going to do all the excavation for you.

And when we're done, we're going to reseed and reply top soil on top. Going by and saying, what could we do?

Is this guy going to paint? Is he going to even spackle? Oh, I'm sorry. He's going to make some cut, throw his wire in and say, all right, Pay me, up to you guys, take care of it.

What's stopping you from saying, I'm going to hire a painter, and he's going to spackle, sheet rock, mud. He's going to repaint when we're done.

These are just some things off the top of the head. But could those things enhance the level of service?

Well, that creates some differentiation. 

@21:58 - Clay Neumeyer (serviceloopelectrical.com)

Absolutely. And again, I mean, we've talked about this before, but what options really communicate is I'm willing to work with you here.

We're already invested in a relationship. I trust you. Do you trust me?

@22:15 - Joseph Lucanie (Fathom)

And that's the thing. They need to be able to trust you. If you're not someone they like trust and respect, regardless of what you charge, they're not going to move forward with you.

I mean, one of the things that I found was really eye-opening was how many times do customers say we went with someone cheaper?

The odds are they're not. And that's the really messed up part. The customer would rather tell you the server provider, I went with someone cheaper to keep you from the knowledge that I actually went with someone who was more than you, but just did a drastically better job than you provided.

They're saving you from that heartbreak. But really, that's actually what's happening. So why do you think that's happening, Clay?

Like, why do you think they wouldn't tell us the truth? 

@22:57 - Clay Neumeyer (serviceloopelectrical.com)

Well, people don't want to deal with it. that damaging blow.

They don't want to be responsible for those feelings. They don't want to let you down. There's a bunch of internal reasons coming to mind, but do you have something in difference here?

@23:12 - Joseph Lucanie (Fathom)

No, I mean, you're pretty much in parallel to it. But at the end of the day, the customer won't tell you that you were less and they went with someone more, specifically because it's easier.

It's easy to say, well, listen, your price was too high. I went with someone. They were like half of what you charged.

And now you walk away thinking, well, there's nothing I could have done. Clearly, there's someone here who's going to do half.

And you don't change and you don't pivot. All you do is complain now. And that does nothing. If the customer sat down and said, you know what, Clay, there was someone who actually came in with more, but they're just doing so much more on this job.

They just, I feel like they're giving you a way better value.

@23:51 - Clay Neumeyer (serviceloopelectrical.com)

Well, what did they do? What did they do? 

@23:56 - Joseph Lucanie (Fathom)

You would have to almost be an argument, right?

@23:57 - Clay Neumeyer (serviceloopelectrical.com)

Yeah. Yeah.

@23:59 - Joseph Lucanie (Fathom)

So that's why. Whenever a customer says we went with someone cheaper, I want you to pause and I want you to ask and be like, Can I ask you a question?

And just simply just ask be like I completely understand if that's the case, but can I ask you a question?

If someone were to do a better job than me And they taught and they cost more Would you be willing to tell me that?

Yes Just open the floor to be like would I would I would you be even be willing to tell me because I'm a big boy I can handle it if I for some reason did not serve you at the level that you were looking for Can you please tell me who is serving and what kind of level they're providing?

I don't even need to know what they're charging. Can you at least tell me what they're providing for you as a service?

So there's nothing else I can learn to get to that level

@24:41 - Clay Neumeyer (serviceloopelectrical.com)

Definitely and I think that's a really important point.

I want to touch on it in two ways A we've got a follow-up script that we give away as a value piece guys F you script You can type that and then shine if you're live with us on the Facebook group Type that in now just like that

And also with that, I believe it's built in the process. I mean, correct me if I'm wrong, Joseph, but asking, why not?

If you don't get the follow up sale, why not? Because it is important to know. And by the way, I've had it work on me and I've had it work for me.

We're just following up again with that brutal honesty question. Is it OK if I ask you a question? Will you just be brutally honest with me here and let me know?

How I didn't serve you? How I miss serve you, how I went wrong, what I did to offend you.

Any of those questions, give information and sometimes sales. Honestly, sometimes it comes back because you're not given up. You're still there.

Go ahead, please. 

@25:46 - Joseph Lucanie (Fathom)

Yeah, I was going to say and I want to add to that that last statement you just said is absolute gold and then it was listened to it.

Please dial into that. But I want to enhance it to one extra way. And that is the reason because the word because

is gold and you can apply it to anything. It's like a universal Swiss army knife. So where you were saying, I know, but the goal where you're like, hey, can I be brutally, can you be brutally honest with me?

Can you tell me where I went wrong and where someone else is serving you at a better level? Because my goal is to always serve our clients at the absolute best level of the industry.

And the fact that you're going with someone else means that there's still stuff that I need to be better.

Would you at least let me know what I could be doing better so I would never lose the opportunity to work with you again?

@26:32 - Clay Neumeyer (serviceloopelectrical.com)

Love it.

@26:33 - Joseph Lucanie (Fathom)

That because statement really makes it relevant to someone and almost is like dropping the mic and be like, I understand that there are things that I may not be doing for you.

Can you tell me what those things are? And sometimes they will. And if you said, okay, so if I were able to do that, what would happen then?

And it could be another way to get back into the door for the sale.

@26:56 - Clay Neumeyer (serviceloopelectrical.com)

Absolutely. Joseph, can you still hear me?

@27:00 - Joseph Lucanie (Fathom)

I can.

@27:01 - Clay Neumeyer (serviceloopelectrical.com)

Perfect. Because I am going through a complete technology blizzard right now.

@27:07 - Joseph Lucanie (Fathom)

Nice.

@27:08 - Clay Neumeyer (serviceloopelectrical.com)

I can't see you. I can hear you. So, what are our action items here today then?

@27:14 - Joseph Lucanie (Fathom)

So the action items are, I'd say, the bare minimum action. Like the bare minimum action is first, do you understand, can you identify who this person is?

Right? So many people say, oh, it's just a chuck and a truck. Not always is that the case. Very likely it's an actual company or at the very least, you know the name of the provider.

Right? Because let's say someone said, I went with someone cheaper. Well, great. If you don't mind me asking, what was their name, just so I can make sure that I can see how I can best support.

Oh, it's like, it could be any name, we ricks electric, it could be Ricky Bobby, Ricky Bobby's electric. It's like, okay, cool.

Stay a save that name. Your bare minimum action is make sure you're tracking who you're losing the job. to get the name and track them.

The odds are it's not the same person twice because if they're operating at that low level, they very rarely are able to market.

They're very rarely able to stay in business. But if you start finding that there is a consistent name, then that can lead you to the next action.

So level one is at the very least track it. The all-star action is as you start compiling this data and you're able to say, well, I can see that Ricky Bobby is consistently beating us at pool jobs.

Then your all-star action is to actually start offering complimentary inspections, complimentary post-call inspections. So I would do this a lot with pools where we would lose a lot of pool jobs because there were a lot of people who were lowballing and coming in.

And we'd say, you know, that's actually great. And I understand you're getting a quote, our company is designed to actually fix jobs at that rate.

So this is what we can do. What I'd be more than happy to provide you with is clearly, I can understand why you'd want to go with someone else.

But what I'd like to do is offer a complimentary inspection after the job is done. What'll end up happening is I will come by, I'll do a completely turnkey inspection and make sure everything was done to standard.

And if it is, then great, clean bill of health. I'm glad you got a great deal diamond in the rough.

If it's not, then I would tell you what we need you to restore it to your level of safety standard.

So you and your family are protected. Can you blame me for wanting to do that for you?

@29:29 - Clay Neumeyer (serviceloopelectrical.com)

No, no, no. And I love that piece. Great. We specialize in fixing cheap pool jobs. Now I think your language is a little cleaner than that.

@29:38 - Joseph Lucanie (Fathom)

But I love that little ad right there. Yeah, because the goal of that statement is when you go when you sound negative or you sound defeated, the customer will say, I've got them.

That's it. The presentation's over. He's upset. But when you say, yeah, no, I got a pool. Someone is going to come by.

I'm going to put in for 700 bucks. When you're like, that's actually great. I'm going. I'd hear that because what we do is we actually specialize in fixing those types of installations at that price point, now we’re happy again.

And if anything wouldn't that call someone to pause? Be like, why the hell is this guy happy? Because we are going to work with you Well, i'm giving the job to the other guy For now.

Yeah, you're right. It's great. I'll see i'll schedule it for a year or two if you'd like even better. I can make it preemptive 

@30:24 - Clay Neumeyer (serviceloopelectrical.com)

That little icing on the cake as you're Realizing this collecting that data getting to know tank top terry as an entity.

I want you to also get to know him as a person. I actually want you to drip on tank top terry because where he lives is one of three places that your next all star is coming from And just because tank top terry really using this name up.

Just I love it. It's great Who's charging so low so little Doesn't make him a bad electrician or even a bad candidate because the reality is How did you learn your pricing?

How did any of us learn this stuff?

@31:11 - Joseph Lucanie (Fathom)

Unfortunately, a lot of us just said well, I think this is a fair rate and we just go out and run it until we end up realizing Oh god, I'm going broke this rate is not serving me at all Like the first pool I did I made $50 on for two days of work Yeah, like it was bad it was bad bad.

@31:33 - Clay Neumeyer (serviceloopelectrical.com)

And so the question becomes Is he worth it and we don't know you can't judge a book by its cover it may be that he's awesome Maybe that he would really enjoy working Under the comfort and in the comfort of it Entrepreneurship is I call it someone that will carry your company with the same level of passion and ambition To receive that entrepreneur

I'll pay, which if you earned it by the value it puts in the hour, why not?

@32:04 - Joseph Lucanie (Fathom)

Right.

@32:04 - Clay Neumeyer (serviceloopelectrical.com)

And help you grow this thing because let's face it, 80% aren't making the cut within three years, right? If you want reference for that, have a look at that e-mouth, um, Gerber, the book, e-mouth, there's a few of those versions out talks exactly about that.

The entrepreneurial myth, how people are really falling short of what needs to happen to be a sustainable business. But because you're listening here today, we know that's not you.

We know that you're here to grow, become and help us push this industry to the next level. And we believe in you.

We know you can do it. But if you're not on the inside with us on the Facebook group, the electric nurse secrets, podcast community page, jump on Facebook and type in electricprenuer or the first ones to come up.

Join that group so you can engage with us. Let us know what topics you need us to discuss. because options, objections, anything engage there and grab our free value pieces.

We're offering every week and supporting in every way that we can. Did I miss anything today, Joseph?

@33:12 - Joseph Lucanie (Fathom)

No, man, I'm just beaming with pride because I love when you do what you do.

@33:15 - Clay Neumeyer (serviceloopelectrical.com)

All right. All right. So then as always, guys, thank you for joining us and electrical or secrets. We're here to help you master sales, simplify pricing and deliver premium level service.

We won't quit until you do. So you might as well climb on board, take hold of one of these action items, grab a win and let us know how you did.

Cheers to your success.

@33:35 - Joseph Lucanie (Fathom)

Thank you.