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"I don’t have time. I can do that later.”
We all say that. Then we notice our kids grew up. Another season’s passed, another year is gone. Friends we meant to contact, weren’t. The program we meant to implement, wasn’t. The resolutions we made last year (and are set to re-resolve this year) resolve nothing, except the heightened futility with which we make them. Tsk, tsk.
Shall we shed a tear at the altar of good intentions? Or rejoice that we recognize the problem at all?
I’m all over Option B.
The Worst Phone Call We Ever Get
Now that you’re all giddy to be reading this, do you want to know the worst phone conversation I get into all year? Understand we’re in semi-regular contact with maybe 10,000 contractors, so it’s hard to pick a winner, but it goes something like this …Caller:“We’ve been in business [10, 20, 30] years.”
Optimistic Hudson, Ink Coach:“Great! How many trucks and how big’s your database?”
Caller:“We’ve got three trucks, and I don’t really keep up with our customers. I guess 1,000 or so. But I’m looking to grow it.”
Now, take his first sentence and follow it with the last sentence. That’s what makes me sad. Devastating. I can virtually assure you he’s spent years “thinking about” growth, had a zillion ideas, three truckloads of advice and a dozen living examples to copy, all followed by massive effort, butnoneof it directed at growth. The efforts are usually the fires of the day while great intentions faltered in the “gonna get to it” file.
This is another victim of a business running a man instead of the other way around. The tyranny of the urgent strangles the potential of the important.
Once more, with feeling: “I don’t have time. I can do that later.”
This caller - and the thousands he represents - has a business bucket filling at a rate slower than icebergs thaw, but the bucket has a large hole in it. Fixing the leak and turning the trickle to a very manageable gush is the objective.
A sure way to plug the hole is with a customer retention program. You’ve heard me preach on that many times. Yet a more profitable twist is to include a maintenance agreement program. Most plumbing professionals have heard of these but are never sure if they’re “right” for them, so they just keep “thinking about it” year after year.
Seven Profit Killers An Agreement Program Can Solve
For my first column of the year, I’ll ask you to consider the following list. Then you can decide once and for all if this is a worthy pursuit or not.Plus, there’s another benefit. These seven factors help determine your profit picture, regardless of implementing an agreement program. Your assignment is to pick two you can tackle - not put off - and absolutely attack. Watch your 2010 profit soar. Once those are done, pick two more. If that’s all you do to change your business this year, it’ll last you the remainder of your business career. Not bad.
1. Customer migration.A full 71 percent of customers who leave you do so for the same reason: You weren’t in their face but the competition was. You paid to get them, but let ’em leave for free. Not good. Newsletters are a great way to stay in touch. Preventive maintenance programs are the natural succession of this, with a twist: Now your customerspay youto remain a customer. This means you get a ...
2. Recurring profit stream.Plumbing contractors who live off “originals” (a single call, single invoice or a no re-contact program) are merely trading dollars for hours. Those with preventive maintenance programs can turn one sale into many, on cue. This builds a business, puts part of the profit on autopilot and creates predictable cash. This effectively eliminates ...
3. Seasonal swings.Sorry to tell you, but this “Weather Slave” mentality is not making you very fun to be around. Whether it’s so cold that pipes are bursting or so hot that water use is at an all-time high, preventive maintenance automatically fills in the gaps, making you a profitable “partner” with the weather. A much nicer position, I promise. The genius of an agreement program is to schedule calls during naturally slower months. Related to this is ...
4. Employee loss. Your best techs will leave you if they don’t get enough hours and are sick of cleaning out their trucks. Preventive maintenance programs give them meaningful work to perform on schedule. And regular maintenance leads to upsells on newer plumbing fixtures, pipe replacements, and expensive bathroom and kitchen remodels.
5. Bidding. Want out of the bidding game? Preventive maintenance customers close almost three times more often than the cold lead national average (84 percent vs. 30 percent), and nearly 10 full points more than your current nonagreement customers. This alone is worth the effort. Want to increase this even more? Give them “Bonus Bucks” (our term) toward plumbing upgrades for each year they renew.
6. Automatic referrals. Most of you hope for referrals because you do good work. Bad news: Your referral rate drops off a cliff the longer you’re out of contact with even the formerly giddy customer. Preventive maintenance agreements keep you in front of the customer, plus they allow you to ask for referrals. Relationships bring more referrals than hope. All your relationships bring you ...
7. Bankable value.Too many contractors work too hard for too long, only to find the company’s “value” is mostly perceived. Last year’s sales are just that. Used inventory and an ill-defined customer list don’t add up to much. A preventive maintenance program generates calculable value - already on the books! Your value goes from “Who knows?” to having a “Wealth Accumulation Plan.”
I hope you are encouraged by this. One reason is enough; seven should motivate you to go to the next level. You can do this. And you can do it tomorrow if you simply decide you want the benefits. Nothing is holding you back.
So if you’re thinking, “I don’t have time. I can do that later,” when is the best time for you to start on a better future?
