Is It Really As Bad As All That!?

smellslike$tome

I got out of new construction awhile back but of course everyone has been talking about a slow down in construction resulting from the mortgage mess. I have noticed over the past few weeks a pretty dramatic increase in the number of employment seekers calling in and then last night around 6:30 pm my doorbell rings. It's a guy I used to work with at another plumbing company about 6 years ago. Haven't seen him except maybe once or twice since I left. He wants to know if I'm hiring since all but 3 guys got laid off where he had been working for the last several years. I'm not certain but I think the company he had been working for had been running between 5 and 10 trucks for residential new construction. The man I first apprenticed under and his son eventually went into business for themselves and had been tearing it up for the last several years. The son needed me to run a camera and locate yesterday in a REMODEL they are doing and while I was there he mentioned having had to lay off 9 the day before. I heard and don't know if it's true but I heard that probably the largest residential new construction plumbing company in my area has parked 20 trucks and laid off all their crews for those trucks (I think they still have 10 or so trucks on the road).

Anybody seeing this sort of thing happening?

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CPlumb

Seeing a lot of it in the Northern Virginia area . Usually we are pretty recession proof around here because of the massive amount of people and the Gov't being here . Lately things in New Res. and Remodel have slowed quite a bit . Service is GOOD . Hope that it's just the time of year ,the ecomony/stock downturn and people anxious about the upcoming election .

I been alone for some time . Wouldn;t mind picking up a good plumber or two for service and res. remodel ,,,,, Just would feel awful if I had to turn around in a few months and lay them back off .

CP

KillerToiletSpider

About a mile from where I live they started a rather large subdivision last summer, the roads are in, the site work is done, and not a single foundation is poured. The developer has taken down the sign advertising houses from the low $300,00.00, and there is a sign now from a bank advertising lots for sale.

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threaderman

Things are slow here.I'm keeping my head above water but not gaining at this time.Of course I lost 6 calls this past week since I have tried to incorporate a diagnostic fee of $28.00 as part of my flat-rating,but some of the big players have on their 2 page ads that estimates are free,someone is always available,makes it kinda hard.Had a guy call 8pm Sun.,house main-line stoppage,they wanted a guesstimate on the price,I had lost a few and decided to go deeper and told them probably not more than $200.00 for the job.He flipped,and I told here that was by no means unreasonable at 8pm on a Sun.I don't know what else I can do.I guess the big guys can send a journeyman out for time and a half and then still make money with shear volume,frickin idiots.Then there are the guys ,any drain cleared 60.00.People are jumping on it not considering the line may get opened but not necessarily cleaned.Oh well,I keep trying to think of other marketing ideas.I base my ads on good info. and not the cutesy stuff as I want the higher-end clientelle,but I see the general attraction in fun type ads.Got off track on your thread,sorry bout that $$.

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JamesNLA

ya gotta be careful about the whole charging for visits thing. I tried it, lost my a$$ very quickly in lost work. FOR ME, it was a risk and may in some other time be of a benefit but it was a bone head business move. But I wanted to see what would happen.....and I did. Now is not the time to start charging ppl for a simple service that almost ALL of your competition is offereing for free. Stop loosing business and get rid of the for fee service.

As for business slow downs...I have been pretty consistant. Sometimes I'm slammed sometimes, I'm cleaning tools.
I have been seeing more and more ads at the supply houses for work trucks. Guys are scaling back as fast as they can to stay afloat. It's odd, because the work is there, it's just life that is costing too much. This country needs a recession. Would do us all some good in the long run.

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smellslike$tome

I'm sorry and I hope this doesn't offend you although it very well might, but you have got to be out of your freakin' mind! How can a recession be good for anyone!? If we have one, and I'm sure we will at some time or other since they come and go, the only people that will be helped are those that are savvy enough to know where to move their money and when. That's not me and that's probably not most people. One of the reasons I went into business, according to my reasoning at the time, was so that I would be the last guy fired/laid off. People have families to provide for, they really don't need a recession or even the anxiety created by the fear of one.

As for the service charge we will have to agree to disagree but I'm convinced that you are dead wrong. You can check back some of my earlier posts on this subject, but my own numbers on this show that from the time I finally committed to charging the service charge, consistently, every time, my productivity, ticket average, and customer satisfaction all went way up. There are all kinds of reasons to charge a service charge which I won't go back over now but the biggest one is that it virtually eliminates all tire kickers, price shoppers, dreamers, etc. Yes you want the client invested in you when you show up. If it costs them nothing then there is no reason for them to not turn you away and you know this in the back of your mind when you're dealing with them and so you will tend to charge less than you should because there are just so many hours in a day and you just pissed one of them away talking to some guy who wants you to his 4th "estimate". Do you want that guy and all his buddies calling you? On the other hand what if all plumbers charged a service charge so that it was the norm and expected? Say you run 3 - 4 calls a day on average, at Threader's $28 per call multiplied by 50 weeks per year (take a vacation or fix your truck or have the flu) that comes to $21,000.00 to $28,000.00 extra per year. My service charge is $59 and it adds around $50,000 per year to my gross revenue. No way am I going back to not charging it! I'm not going to preach on this all night but I'm hoping you and everyone else will see the wisdom in doing this.

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neolitic

Back to the OP.
Just last winter I went into a curmudgeonly
monologue about "Where are all the kids wanting
to shovel snow? When I was a kid...."
You get the picture.
This year every time there is a flake
I get half a dozen grown men wearing
construction type clothes.....
Something's up here.

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slowguy

Here in ny it seems it is getting ugly.We have approx 17 mechanics and usually don't slow down that much but the housing is def getting bad .Fortunately we have 3 large com projects going but some guys are going home soon by the looks of things.On top of that out of 17 guys only 1/4 of them work out of trucks anymore.Most of us are using our own vehicles ,our own gas,driving upwards of 80mi one way with zero compensation.There are a few other larger com outfits in town I may be visiting soon ??

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Putty Truck

The last few years were a big bubble and now its business-as-usual.

To the men who think service charges are losing them business: So you had a 100% win rate before the service charge? Got every job? I seriously doubt it.

I would love to see a company with a double truck ad not charging a service charge. Perhaps you misread it...if it reads "free estimate (on some jobs, on some days)," they have professional salesmen. Otherwise, I don't believe it.

If the ho freaks over a 45.00 service charge, there's no way you can get it to pay a reasonable charge anyway.

bugdoc@linkny.com

Think this through gent's... there really is no such thing as giving a free estimate. Anyone that advertises as such depends are the ignorance of consumers and the inability of them reading between the lines -- to begin with !

Fees are fees -- one way or the other -- when you get the job and the work is completed the fee is as agreed upon at the get go. Everybody's happy, work is completed and family's are fed.

nlgutters

ive read these service charge posts for awhile and as an outsider looking in at you plumbers. id have to say you are dumb for not charging them. if i have crap coming out my toilet, im picking up the phone book and the first one to pick up there phone can charge me whatever as long as they fix it

ChrWright

An excavator friend went to an association convention last week. With this particular group, the economists are usually pretty rosy in their outlook. This time, his advice for those in new construction was to "find a cave and crawl in it."

Not sure if it's as bad as all that--but there's A LOT of inventory just sitting--pretty much everywhere by the look of it.

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JamesNLA

No offense taken at all man...that's what this forum is for...different POV's!

Here is what I mean about needing a recession. I can't buy a new house. If my wife gets a job (at home mom) we still cannot buy a new house (new used). Why? Because an average nice house is in the 800K range in a decent neighborhood.
Since the wages are about the same as the last 8-10 years or so how can one afford the current market? Now when I say recession, I don't mean everyone is out on the street and jumping out of buildings, I honestly don't forsee that happening. The cost of living is beyond through the roof out here. A recession would bring some order to this chaos. With as hard as I work and making every penney I can....it's just frustrating to see pretty good money comming in, and yet I am way off on my goals (short and long term)

As for the charging for estimates....I have an extremely good closing rate. I would say at least 80%. Alot of my work is "in need" work. no hot water...let's do a tankless. At least I am attempting to make it all tankless with service filler work. I read all the post about doing it, and all the positives about it, and just went for it.....I couldn't sell it. I don't really want to re-write what I already did about it, but .....again, FOR ME is just wasn't happening. I make alot more $$$ not doing it. If the job is about a grand in labor....1 day worth of work, I book 3 a week I do pretty ok. out of 5 or so of these estimate fees ALL declined my visit as they already had another contractor that was not charging for his estimate. Customers want 2 things. 1, they want a fair price (PRICE IS KING) 2, they want to beable to trust the guy whom they are entrusting their home and private space to. If I can get close on both of those....I'm in the door. If one is off it's a no deal.

Charging for the estimate....formally outright and upfront is petty and a turnoff. That said, if ALL the other plumbers would do it then HELL YEAH....I wouldn't mind a few paid sick days or getting back up in the airplane working on my instrument. But that is not the case. Maybe I need to be more confident in the approach or I need to restructure the idea a bit to taylor it to my business, but as is...no thanks, I am doing well enough to try something like that, but not well enought to afford to do it. Maybe in a few years I'll have the balls to stick it out but for now, they are schrivilled up!!

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JamesNLA

I totally disagree putty. I can and have proven this to be false. Hell I had an old timmer today call me back to throw a stink about my price. 1700 for mats and labor (he already has the unit). Initially agreed, called me back to whine that he couldn't afford really...wasn't going to make his investment back....blah blah. I simply said sir, it's a lot of work that requires years of training and skill to do the job correctly. I asked him if it would be ok if the job took 2 days if I could get double my labor charge (850)....he laughed out loud than he got it, he simply said, no. I said and it would not be fair to me to over charge you just the same as it would not be fair to me to be taken advantage of. Oh no..oh no I don't want to take advantage of you, I just said do we still have our Tuesday appointment than? Leme call ya back blah blahh...
I wrote it off and figured he just didn't either have the funds or really didn't want to part with it. I also think he wanted SOME kind of deal.....not me.
Called me back a few hours ago, thanked me and said he will see me Tuesday morning for the install and to have a great weekend. Point is, with a guy like that, who can barley afford the job isn't interested in paying to talk to me. He wants 2 things. A good price and some form of trust to be established. So here is an extra 850 in the bank for NOT charging the estimate fee. And for the record, normal labor for his kind of house would be in the 800 range....I still got my 50 estimate fee, I just didn't have to ask permission first.

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"....And then we all switch places when I ring the bell"
-Adrock

Putty Truck

James....did you have a 100% win rate before trying the service charge?

JamesNLA

nope....bout 80%

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"....And then we all switch places when I ring the bell"
-Adrock

Mike Finley

Does everybody here know that there are national closing statistics for every business that existis?

So are we the best salesman that ever walked the face of the earth or have we been selling on price all these years?

Want to know the truth? There is a simple way to find out:

Try raising your prices by 20% and lets see what your closing ratio goes to.

If your sales stay the same then it just plain simple: You're the absolute best salesman that ever walked the planet.

If your sales drop, the truth is you've been selling on a low price all these years.

Why work cheap? Don't you deserve a raise? Could be a free bass boat every year with your name on it for nothing other than raising your prices to find out.

mickeyco

Where at, always looking for a deal.

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smellslike$tome

Mike where might I find those statistics for service plumbing companies? If you don't know just take your best guess. I googled it but didn't find much of what I was looking for.

Oh and by the way, awhile back in a discussion about service charges and getting the customer to sign on, you mentioned using the phrase "does that make sense" or something very similar to that after you had explained to the client why you were doing it. We have been charging service charges to come out for quite some time but we certainly don't have it licked and are always ready to make improvements to our script. My wife (who answers the phone) felt like "does that make sense" might come across to some people a bit condescending as if they couldn't understand possibly so we changed it to "does that sound fair" and have had good results. I think she told me that she has not failed to book a call whenever someone agrees that the service call is fair. Most people do not want to appear to be unfair. Anyway, I appreciate that input in a previous post. It's had a positive impact on our booking rate.

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Mike Finley

I'm with you in regard to continually improving upon the phone. I've used the same phrase as you are using also "does that sound fair?" with success too. I think the important thing for me is taking the leads temperature. Really what I am looking for is total buy in on their part because I don't want to get to somebodies home and them not be there. I believe there are some people who are too shy to say no to a service fee and instead will just avoid the appointment and I don't like wasting time ringing door bells with nobody home. So I'm taking their temperature and judging their voice and response. So far so good.

By the way I have recently increased my initial fee upward of $150.00 in some cases with customers being very accepting of it. PM if you want the details, I'm not throwing that stuff out on this place. too many eyeballs.

As for your closing ratios for your niche, look to your trade organizations. We have the NKBA and others, there must be some for your niche. You probably won't find this information free, it usually is part of the valuable information these organizations only give up with paid memberships. Sometimes with enough digging you might find they paid a 3rd party to do a study at some point or another. Sometimes these studies aren't included with memberships and you might have to pay upwards of $500 for them. ALso, sales are sales, you might find good information in the HVAC industry or the electrical service industry that you could interpret to your industry.

I've paid for one that was about $600 bucks. Talk about a leap of faith on that one! But it has turned out to be well worth the money to have hard data to base things on instead the normal guestimates and gut feelings we are all so used to. Knowing what is going on nationwide in your niche and what consumers are really doing is just plain invaluable!