PreneurCast is a business podcast. Each week, author and marketer Pete Williams and digital media producer Dom Goucher discuss entrepreneurship, business, internet marketing and productivity.
Pete’s back, and he continues the If I Was… series by talking to Dom about how the 7 Levers of Business can be applied to tradespeople and the service industry. As always, this episode isn’t just for people in those businesses, there’s tips for everyone.
Pete is talking to Dom about how the 7 Levers of Business can help the service industry
Transcript:
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Episode 091:
If I Was A… Tradie
Pete Williams: Hi honey, I’m home! I am back.
Dom Goucher: It’s such a delightful sound. Even with the little birdie tweets in the background, just to herald the return of Mr. Pete Williams.
Pete: Yes, it’s been a long time between episodes for me, unfortunately or fortunately. There’s been some amazing stuff happening in the last few weeks. So thank you very much for holding the fort down so professionally. But yes, I am back and ready to jump back into what is 2013’s first podcast for me.
Dom: Yeah, not quite as planned really was it?
Pete: No, no, we had plans to change this year’s podcasts up to be every two weeks as opposed to weekly, just with a few other projects and other things we were working on this year. So we are only six weeks in, but that means there’s been three episodes that I’ve missed. But that’s all good. We survived. The listeners survived. And we’re back at it again, which is very exciting.
Dom: It’s cool. And I think it’s a testament to your ability to ride with change and to adapt. And also the strength of your systems that given the change in your life that a new baby has brought, you’re back on track in such a relatively short period of time.
Pete: Yeah. He’s a month old tomorrow as of time of recording. And it’s been a crazy month. It’s been a little bit different to what I expected, which is good and bad. He’s definitely already teaching me patience, which is a good thing. I think I’m going to learn a lot from this little fellow. But no, it’s been good. It’s been a little crazy the first couple of weeks.
He wasn’t eating overly well, so that kind of put a little bit of stress on Fleur and I, just probably a little bit of undue stress. We probably over-analyzed things a little bit in hindsight. But I think that’s pretty common for first-time parents. But he’s all good now. He’s putting on weight and he’s a lot of fun, so it’s very exciting.
But I think I’m pretty much back into a new routine now. Obviously, babies can change quite a bit and throw our routines out. But Fleur, I have to say, is absolutely amazing. So it’s been very handy to have an amazing person by my side to give me that ability to get back into the work routine relatively quickly, which is exciting.
Dom: Excellent. Well on behalf of everyone, all of the listeners and the Preneur Community, just officially say congratulations to you and your lovely wife.
Pete: Thank you very much.
Dom: And you’re back. Do you want to dive straight in and pick a topic?
Pete: before I do, I just want touch on your comment. I’ve been absolutely amazed, and Fleur has as well, with the response from the community. It’s been insane. Like the amount of e-mails and tweets, and advice and suggestions we’ve had has been absolutely fantastic.
So everyone who’s replied to e-mails who’ve been sent out newsletters, Noise Reduction newsletters and all that stuff; we’ve had a whole bunch of replies from people just giving us tips on what to do and apps to download, and books to buy, and things like that. It’s been amazing so thank you very much to each and every one of you who took the time to e-mail and tweet and send messages like that.
So they’ve been very much appreciated. But yeah, in terms of topics, I thought we could dive in and continue on our If I Was A… series. I really enjoyed the episode that we did late last year and I think this year we can start doing it a little bit more regularly in the show.
Revisit the whole 7 Levers framework, which is the foundation or a big core of the podcast here. And it’s a way for us to continually, hopefully, spark people’s ideas and give them seeds of inspiration around different ways to apply the 7 Levers in different industries. I thought today we could talk about tradespeople. Carpenters, woodworkers, plumbers, gardeners.
Those trades service businesses. But I really want to reinforce, like we do at the start of any of these episodes, that if you’re not a tradie, if you’re an online marketer, if you’re an affiliate marketer, if you’re a retail-store owner, still listen through this episode and think about how you can swipe and deploy the ideas and suggestions that we cover for a 7 Levers framework as a tradie.
See how you could apply it to your business. Because where most people will grow as entrepreneurs in two sides of that coin is when they look at swipe and deploy. And one is, when is when you start putting your thinking cap on and forcing yourself to think creatively about how you can apply other ideas to your business and start building that gap, it makes you start thinking on your own feet.
So when other ideas come up, you can easily and more effectively see how you can apply that to your business. And that is a huge leap for an entrepreneur. You’re no longer stuck following the guru, so to speak, and doing exactly as they say.
When you can make that jump to start thinking on your own and going through the process of looking at swipe and deploy, or listening to things like this and going, how can I mold this to my business, is one huge thing.
Also, the other side of the coin is what I touched on then as well, which is just the whole thinking just looking at other ways and trying to come up with your own ideas, and not following someone else’s system.
I think that’s really important. So I do really encourage everyone to listen through these and think about if you were a tradie, how would you apply this. Look at it from that perspective, but also see how you can apply these examples to your current projects.
Dom: Yeah. We were talking about this just recently, this whole series came about because wherever we go, whenever we talk to people and we talk about the 7 Levers framework, people will come up and say, “But how does that apply to me?” We’re really picking as many and varied groups of people as we can to come up with these ideas and show you how that they can apply to you and your industry and your business.
But it is really, really important that you do what we’re doing. We’re mining our creativity or using our experience and things we’ve seen people do. Or we’re applying things that we know work across the board. But there are examples everywhere, everyday that you can see and you can use. Pete, you say swipe and deploy, swipe and deploy.
And not everybody really necessarily understands that. But it’s just a simple practice, as you say, of looking around and seeing what other people are doing and applying that to your business. And it doesn’t matter that they’re not in your industry. In fact sometimes, it’s better that they’re not.
Because very often there’s a technique out there that’s tried, true and even worn-thin that has never been done in your industry, but it’s wearing thin somewhere else. We talk about this in the internet world in marketing online and this idea of autoresponders.
The systems that you can set up where you can set up a series of e-mails and when somebody subscribes to your e-mail list, the system just e-mails them on a regular basis or an irregular basis by the way. You can set it up to do it randomly or whatever.
But it personalizes the e-mail to them. Well in the (inverted commas because you hate the phrase) “internet marketing” space, everybody — I know if somebody’s written me an e-mail or if it is an autoresponder. It’s obvious to me and it’s obvious to most people who operate in these circles.
But people who operate in these circles are such a tiny percentage of the world population versus however many people out there that you could possibly be sending these e-mails to, that it’s impressive to 99.99% of the population of the world if they get an e-mail with their name in it.
And it’s just simple little things like that. Just because it’s worn out in another industry doesn’t mean it won’t work for yours. Similarly, if it is working in another industry or another business, there’s a real chance it’s going to work for you too. So always be on the lookout for these opportunities, right?
Pete: Absolutely. Absolutely.
Dom: Let’s dive in. I’m going to use the proper terminology for my host, if I was a tradie, how would the 7 Levers apply to me?
Pete: We can just start by banging through a whole bunch of ideas and thinking about how this applies. Let’s look at tradesmen. Traffic, like anybody, for them is going to be first-time inquiries to their business and service. There’s a whole range of different opportunities for a trades person to advertise their services and get that first-time inquiry.
AdWords and online marketing is, I think, one of the greatest ROIs wise any business can have when it comes to traffic generation. And the really cool thing with AdWords, as a lot of people know and some don’t, is that you can target a specific geographical area. This is a really cool thing for a tradesman.
Obviously, if you are an e-commerce, store you can advertise anywhere that the couriers or the postal service deliver. That’s pretty straightforward. But with a service business, if you’re based in Los Angeles, you don’t want to necessarily advertise in Santa Monica or in San Diego. Or if you’re in Melbourne, you don’t want to advertise in Ballarat.
You want to make sure it’s in a certain radius of where you are willing to drive to do the work. So what you can do with AdWords is say I want to advertise my plumbing services. And you choose all of the different keywords around plumbing, plumbers, pipe fixing, etcetera. And say I want my ad to show to people if they are within a 10-mile or 20-kilometer radius of my home.
That’s as far as I want to drive for the work I do. So you can get very targeted with your advertising, which is hugely successful because there’s less wastage. It also gives you the ability with less wastage to pay more for the advertisement because the cost per opt-in or the cost per conversion that we’ll get to in a moment should be the same.
The less wastage you have and the more you can pay for the lead. This means you can say I’m going to pay a lot more for my ad to display at number one in this geographical radius because I know that there’s not going to be any noise or wastage in that advertising from a geographical perspective, which is hugely beneficial. So I think that’s—
Dom: I’m sorry. Can I ask you a question about that?
Pete: Yeah, sure.
Dom: Because I mean that in itself is amazing to me. The first time I found out about the geo-targeting stuff I was like, wow, that’s awesome. But can actually you run an advert that has its content targeted to the area that you’re talking about and is that a good idea?
Pete: So you’re asking if the words in the advert itself have…
Dom: Yeah.
Pete: You can in a couple of different ways. And I don’t want to get too complicated and too deep in here. Mike Rhodes of WebSavvy is probably the best guy to direct those questions to if anyone wants to know a bit more about AdWords. But what you can do is a couple of different things.
If you have your AdWords account linked in with your Google Places account, which is something I’ll talk about in depth in a moment, what it can do is then put location-based stuff in the advert to a certain extent, which can achieve some of that.
The other side of the coin is you can then, if you wanted to, create a number of different ad groups. So if you want to service different suburbs, you can get really granular as well and say this A group is only a 5-kilometer radius, and that way you can put in the word, for example, ‘Hollywood area plumbing.’
And any of the different keywords around anywhere in Hollywood, it just shows that. So you get really granular in the size of the groups and the actual words you put in the adverts to be very specific to those suburbs or areas. That’s a couple of ways I can think of off the top of my head to achieve those results.
Dom: Cool. It was more of a ‘can you do it’ rather than ‘how you would do it.’
Pete: Fair enough.
Dom: But it’s cool that the power is there that you can do it. And even just knowing that you can do that, I think, will maybe turn somebody on to AdWords that probably hadn’t thought about it before, because they didn’t see it was relevant necessarily to their service.
Pete: Yeah, because I think a lot of people when they hear about AdWords, if they’re not in that world, they think I don’t advertise my business on the internet to everybody. They don’t realize that you can get targeted to geographical areas. So it’s based on where the person is literally sitting when they are searching for your business.
But the next thing is that extension I spoke about: Google Places or Google Maps or Google Local, depending on where you look and what they’re calling it. Basically, that’s the map service of Google. I think everyone here has used Google to search for a location-based service. It might be ‘chemist Sunshine,’ or in this case, ‘landscaper New York City,’ which is probably an oxymoron because there are probably not many actual places in New York City you can do landscaping.
Dom: I wasn’t going to say that.
Pete: But people get the example. What happens is you’ll see in the results page of Google, a map with all the listings of locations and people who have little pins on the map saying this person’s based here, this person’s based here. Well, I think again, people are using that a lot more for searching for location-based services and products.
Obviously, having your business listed in Google Places is a huge one that everyone should do. It’s completely free, very easy to do. So it’s something someone should also check out as well.
Dom: That’s really important for people when they’re searching on their mobiles, isn’t it?
Pete: Absolutely. Yeah, that’s definitely a huge one.
Dom: That’s a huge amount of traffic that goes to that Google Local is people looking for things when they’re out and about, depending on the type of business. I think that’s quite relevant, right?
Pete: There’s a great service with some guys in Australia that I know and work with. They have 1-800 repairs and 1-800 cleaning. What their service is designed to do is they’ll go and do all the lead-generation stuff or the noise generation at least.
They advertise their services like, if you want a tradesman call 1-800 repairs and we’ll find you someone.” So they’ll go ahead and do all that due diligence. And then what they’ll do if you’re a trades person subscribed to their service, they’ll turn around to you and say, “Hey, Johnny.
We had an inquiry today for someone who can do some landscaping,” or “can fix your stairs that are broken,” or “the plumbing. Are you interested in that lead to quote?” And they’ll say yes and they’ll pay for the lead. What this is this is a business and a service. There’s plenty of them all around the world that will go out and get you qualified leads so the traffic generation’s done for you.
You can almost argue, depending on how you want to make your funnel, that that’s almost an opt-in as well. They can do it for you for a set fee, you just pay for the lead. It’s a sensational service, paying for leads and not having to worry about all that noise generation. Those services are definitely worth checking out as well is that lead generation companies that will just charge you for qualified lead generation.
Dom: That’s really powerful because that goes back to something we talked about on a previous episode about marketing a product. If you had a product you wanted to sell, would you start out, try to make your own shop just to sell your product, or would you go to another shop that’s already got the chain and distribution and everything there.
This is a similar thing, isn’t it? These guys at 1-800 repairs and 1-800 cleaning, they’re investing their money in huge advertising campaigns in the infrastructure to handle the calls and qualify and everything. So by the time the lead gets to you, it’s already qualified as you said, but it’s that other thing.
They’re out there in front of everybody, whatever they’re doing to market this thing, and generate the traffic. I would say it would save you a fortune because I don’t think you could reach the same level as an individual trades person that they can reach by applying all that effort to it.
Pete: Yeah. Like the AdWords, the places and services these guys have, I think, is for the lowest-hanging fruit that everyone should be doing. There are plenty of other ideas and ways to advertise your business as a tradesman to get the traffic, but I don’t want to labor the point too much. I wanted to just start this out.
Dom: There I go focusing on traffic like everybody else always does.
Pete: Well, it’s an important part of the function. If you don’t have any traffic, you can’t have any opt-ins or conversions or items per sale, or anything down that funnel. So it is the first thing you need to focus on. But it is only one of the seven areas that do drive the profit of your business.
So the next thing is opt-ins. And it comes down to a number of different ways that you can argue about opt-ins. If you’re running an AdWords campaign or even a Google Places campaign to a certain extent and you’re getting that traffic to come to your website, and the opt-in is always on calling up and saying, “Hey, Billy Bob can you come out and quote on doing some roof restoration for me?”
That’s your opt-in, seeing your marketing, responding to it by calling up and allowing you to come out and quote. For those scenarios, if you have a website, you want to be very clear about the objective, which is someone’s either A) pick up the phone and request a free quote or B) someone filling out an online form on the website at least saying, “This is my name.
This is my area. This is what I want to have done. Can you come and quote for me?” You want to make it very clear with very clear calls to action on these things. If you’re doing Yellow Pages advertising, again, it’s really important that it’s all benefit-driven with calls to action.
And realistically, as a traffic generation, to go back for a moment, Yellow Pages can still work, people. Don’t believe the hype. It can still work if you do it properly because there’s less noise in there because everyone’s dropping like flies. So if you’re in there, there’s definitely a huge part of every target market of people still going to Yellow Pages.
If you’re a trades person wanting to target a more mature demographic, by the way, the boom is in those demographic who don’t all use the internet, has the most disposable income going around these days. So it’s not a bad idea to work out where they are and how to get in front of them, and Yellow Pages is one of those ways.
You want to make sure that you have a clear understanding and a clear process of getting that opt-in. Getting people to willingly get you to come out and quote. And whether that is quoting over the phone, or going out and doing a live quote, that is the whole opt-in angle around that which you’ve got to be very clear on.
Dom: So I mean a clear call to action is one way to increase opt-ins. And it literally is a statement like ‘call this number,’ and ‘request a quote,’ which we’ve said before in the past and in various situations and in the consulting that we’ve done. The first thing we do if we look at someone’s website is say, what is the goal of this page?
What’s the goal of the website? What is an opt-in for you? And if it’s a phone call, then we strongly suggest that you put the phone number in big letters at the top of the page and write ‘phone is for’ and then tell them what to do.
Pete: Absolutely. The IT company that we use in our office for the telco business and the e-comm businesses; we’re in the process of implementing, I think it’s about a $45,000 new server. I was in the office last night with them until about 11:00 getting a lot of that stuff sorted out. But I had to make a phone call to them during the week and didn’t have any of their details handy.
So I went to their website. And their phone number is below the fold on the Contact Us page in size 12 font. That’s just infuriating that you’re going to make me click three times to contact you. I want to do business with you guys and they had the contract.
But even if I was a first-time prospect that stumbled across their website and wanted to make contact with them, I’d find it frustrating. I’ve got to spend 45 additional seconds, three clicks to figure out how to contact you. Isn’t the whole purpose of your website to get leads to call you? They didn’t have a quote request or any sort of form anywhere else on their website.
So clearly, the objective of that website was to get leads to call, but the way they do that was hidden. It’s moronic. It’s like saying I’m going to open a retail store and hide the cash register in the back corner behind all the muumuus. You can’t find it. It’s just ridiculous.
Dom: Well, absolutely. Although, when we were over in Florida we saw a retail store, a very well-known brand of clothing and finding the way in was a challenge. That was fascinating. But yeah, this is it. It is that thing. And when you talk there about the older more mature people, well there’s a group, they’re kind of bunched into groups.
There’s the people who have disposable income because they haven’t found the internet, and therefore they haven’t found eBay and things like that yet. There’s the gang that use things like Yellow Pages out of that. But then there’s the ‘just got online.’ So they got online.
My mom is in this crowd— they’ve mastered Google, they type it in, and then they sit there and stare at the screen because they literally don’t know what to do next. But if your website had the phone number, then they’d feel so much more comfortable and they’d pick you. It’s that simple. It’s these little things. And in the services industry, I think it’s more important than anywhere else.
Pete: So let’s not labor the opt-in point. There are plenty of other ways we’ve spoken of.
Dom: Surely.
Pete: We need to go on because there are another five levers we need to chat about and we want to make sure we can fit that into the episode. But there’s plenty of other times we’ve spoken about opt-ins and stuff on the show. The next one is conversions. Getting that person who has received that quote to buy from you.
This is a huge growth opportunity for almost every trades person I’ve ever worked with in my life. So many people come out with their old school notebook; they jot down their notes. Use that paper where you write it down on the back of the paper, it gives you a carbon copy. They rip it out and give that to you as a quote.
It’s just this handwritten thing of what the quote’s going to be for the work. And it’s what everyone else does. There’s nothing that sets you apart. One of the things that we did very early on in our telco business, which by any token you can argue that it’s a service-based business. We sell phone systems but we don’t manufacture them.
We just come in and fundamentally charge the client a fee for us to install it, program it, train them, support them. So you could very much argue it’s a service-based business. One of the very first things we did when we started to really explode that business around Australia was purely based on our quoting and our proposals.
All our competitors were doing black and white proposals with the client’s name, a list of all the parts, one line saying installation, and then a big black figure at the bottom which people had to pay. We came in, being non-phone system people that sell with a technical background, and did beautiful four or five-page proposals with big photos of the handsets, bullet points of what happens on the installation process, the benefits they’re going to get.
When we listed out what they got from a phone system perspective, we didn’t mention that it was an ATA4 card with a BRI7. We were saying stuff like it is a phone system equipped for four lines. It has the ability to have up to 12 handsets plugged into the system. We’re supplying you with six handsets with big photos. We made it very clear, easy and not scary for the prospect and the client.
And I think a lot of our tradespeople have that ability still in their industry to go in there with a nice, professional polo shirt on and take your shoes off at the front door and do a very nice presentation. And if you’re going out and doing those quotes to get that work, which most people have to do, you’re doing it in a much more professional and respectful manner.
And I think that, for everyone I’ve worked with and spoken to, have applied even just like a two or three-page very clear proposal. You can do that so well these days on iPad. You can have your iPad with you on the job and do it all on an iPad. There’s plenty of quotations services and plug-ins and tools that can do this quoting stuff for you very easily.
You can make a much more professional presentation. You can e-mail it from your iPad straightaway. Things like that can do a much better job in just increasing your conversion rate from opt-ins and quotes to customers by 10 fold not just 10%.
Dom: Absolutely. And that’s the thing. This kind of technology now, it’s not expensive. It’s not super mega customized or anything. It’s literally, if you have an iPad, go on the App Store and download the invoicing, quotation, whatever it is software. It’s going to be cheap and it’s away you go.
Pete: Absolutely.
Dom: And you’ll stand out. And standing out is what matters these days, right?
Pete: Yeah, and it is. It’s about standing out and being different and showing that you care. So there’s some very easy ways. Learning how to sell is something that we preach quite a bit on here. But so many trades persons, and this is a part of the problem with the industry; you go into a three-year apprenticeship and you come out, and you’re a mechanic or you’re a plumber or you’re a roof tiler or you’re a painter.
You have this skill set which is fantastic to do the trade, to do the mechanics. But you have no core business skills. Part of this you have to learn how to sell. Because at the end of the day, turning a prospect and an opt-in into a client through that conversion process is selling. You have to be able to go in there and future pace that conversation.
You have to go in there and work out what the objections are going to be and how serious they are. And part of this from the opt-ins scenario is over the phone, work out how serious this person is about renovating their house, doing that extension, landscaping that backyard.
Because you don’t want to go out there and be doing more and more quotes for more and more people who are just getting an idea and a feel and not in that buying cycle. So learning how to sell can give you that skill set.
Dom: Good tip, good tip. I don’t suppose there’s any one particular book or something that you could recommend people might what to look at to get an overview or an idea?
Pete: Spin Selling’s a great one. I think Influence by Cialdini is worth a read as well when you read it with the context of, I want to learn how I can apply this to selling. W.O.M.B.A.T. Selling’s another great one. There’s plenty of— Tom Hopkins’ stuff is historically in real estate.
But some of those basic fundamental stuff can still apply if you get that context. And I really do think it’s an ever growing and ever learning process of learning how to sell and learning how to communicate. You want to continually be doing that all the time.
Dom: You did make a good point that people are technically proficient at their craft or their trade when they’ve done their study and they’ve finished their apprenticeship, but so few people have this other training, the business level training. It’s very rarely part of what you’re taught to do.
I think more modern teaching is going that way now. People are taught the business. But anybody that’s already there now and in one of these businesses maybe doesn’t have that as part of their skill. They’ve maybe just kind of worked their way through it. So just taking that time to study these techniques can make a huge difference.
Pete: The business stuff is getting taught more, but it’s more about the debits and credits and the books side, the technical side of the business again, not the marketing side of the business, which is interesting. Moving on to the next lever. Let’s say for example, items per sale as the next one.
With this, people get very confused from a trades person perspective as well. How do I increase my items per sale because I’m doing a service? I’m charging for a service, so I can’t do two services. Well, there’s a number of ways you can look at doing increasing items per sale.
And one of them is doing your service and working out what supplementary products and services you can sell. So obviously, if you’re a landscaper it’s pretty easy to say, well I’ll come out and do your landscaping and your gardening, but let me try and sell you some plants as well. That’s an obvious way to increase the items per sale and per transactions for a trades person.
Again obviously, if you’re a roof tiler, there are ways if you want to extend your product line, start offering things like insulation in the roof and other supportive solutions. But what I suggest and talk most about when I consult with tradespeople and owners of franchises and businesses in that trade space, is looking at doing some unique things.
So rather than trying to increase your items per individual sale, look at doing bundle sales where you are pre-selling saying, “You can buy this service today for $300, or for $500 you can buy a coupon book that gets you 10 hours of my time.”
Now this job is going to take up six of those hours, but then you have four hours at a much more cost-effective solution for me to come back and do something more for you later or do something additional at the house. We can landscape your backyard, but we’ll also landscape your front yard a little bit,” and pre-selling that.
A friend of mine, and a client to a certain extent, had a business here in Australia who was doing that. They were a trades-based business. What they were doing there, their core focus was selling almost like coupon books of time, and if it were gone, pre-purchase almost like a maintenance contract or an insurance policy that would say you can pre-buy four hours of their time.
They will come out for an hour every time and that’s covered. You use one of those coupon things. I thought that was a very intelligent way and a very cool way for a service-based business to not only sell gift cards and gift vouchers because he found that the redemption quite a bit, the up-sell rate made it worth it.
But the redemption rate made it even more worth it because so many people didn’t go and redeem the rest of those coupons or the rest of that time they had pre-purchased. And obviously, it expired. It elapsed. And he kept the money and didn’t have to provide the service. But the client had that peace of mind.
They were buying peace of mind knowing that they wouldn’t have to pay for issues in the future if they had it. Everyone does that with insurance. Personally, I know in the telco space and a lot of other IT scenarios, people pay maintenance contracts where you pay a fee every single month beyond that.
So people are buying the service, installation of the product, whatever it might be, and also paying continually for maintenance and support around that, which a lot of other tradespeople can be doing. You can sell them landscaping and then also sell them three follow-up visits just to make sure it’s all there, and mow the lawn, or whatever it might be.
Dom: Cool. Cool.
Pete: Awesome. So which lever should we do next, mate? Should we do item value?
Dom: Yeah. I know what you’re going to say, so I’m interested to see if it’s anything different this time.
Pete: Besides just up your prices?
Dom: Yeah.
Pete: Well, upping your prices is one thing, but going in the way you’re going into your business right now. The way you’re going in and quoting right now. The way you’re going and doing and delivering your service right now. Looking and presenting the way you are. For a lot of tradesmen, upping your price is not a way to go because so many people buy on price because everybody looks the same.
But if you’re going in there with a more professional portfolio, a more professional quote, a more professional conversation, presentation, the way you look when you go and do that quote, 10% increase in prices can easily be justified. And clients will pay it all day long if you stand out as more professional, as more trusted, as more diligent, as more qualified, which you can easily do in your presentation during the traffic, the opt-in and the conversion phases.
A 10% increase can be justified without doing anything else except for just presenting better. So I do really believe in that. The other option as well is offering premium solutions. I’ve seen this work. It depends on the industry. But you can say, “I have an apprentice or a junior team member who can do what you want at this price. Or you can get one of our senior technicians or our senior service providers or our senior roofers or our senior plumbers to do the job and pay a 10% premium for their time.”
Give the client the choice. Some people will go, “Oh, look, it should be fine, it’s a simple job. I’ll pay for the apprentice. Not a problem.” So you can charge different rates. So you charge a premium. You don’t charge a discount for your apprentice. You charge a normal rate for the early people, the juniors; but you pay a premium for the senior people. Definitely one way of doing it which works exceptionally well.
Dom: I like that. Hairdressers do that all the time.
Pete: Yeah.
Dom: Would you like the senior stylist?
Pete: Yeah. And the whole swipe-and-deploy scenario here is it works in so many different scenarios. Again, financial planners, hairdressers. Even in that massage and sports physio space they do that as well. They have different people who charge more even within the same business. So you can offer that service as well.
But you can then also offer in your quoting, premium solutions. You can say, “We can do it with this grade material at this price,” or for this grade of material, you’ll do it at this price. You offer two options in your quotes. You show the benefits of why the premium service is worth looking at. You make it so powerful in the way you present that pricing that it makes sense to go with the premium.
To pay that extra 10% for all the different benefits and additions. So there are some easy ways that you can start charging more for your services and getting more revenue in the door per client, which what that particular lever is all about increasing. Because again remember what we’re trying to do across all these 7 Levers is just increase each one by 10%.
If you go and do AdWords advertising in your business right now, most likely for most businesses that I’ve worked with, who are just getting started or growing and even some senior businesses, you can get a 10% increase with just one quick three-hour implementation of AdWords.
By changing up your proposals which might take you a day or two to put together, a template and maybe outsource it to get it designed, that will increase your opt-ins and your conversions by 10%. All we’re looking for is very small increments of increases that when they all add up at the end of the day, will double the profit of your business.
Dom: Absolutely. Just one thing to come back to that increasing your prices, the inverse of increase your prices is the thing that we’re basically allergic to and we say to everybody, which is don’t automatically offer a discount.
And one of the things that you said there about the apprentice or the lower-grade technician can come in and do that job is a way of dealing with people who do ask for a discount. Or do ask for you to lower your price.
Pete: Yeah. Absolutely.
Dom: This is just a good tip. I do want to just bring that one up.
Pete: Cool. Awesome. So we’ve got traffic, opt-ins, conversions, items per sale, item value. The next one on our list as part of the 7 Levers is transactions per period. This is the amount of time people come and use your services over and over again. Again, depending on how your funnel works and what lever you want to put where and how you want to pull it, you could argue that some subscription service is an items per sale option versus a transactions per period.
You could say, depending on how you want to pull this, that I’m going to sell a subscription to people. If I’m going to come back and mow their lawn and landscape their garden every month for the next 12 months, then it’s a contract. And you could argue that is now 12 transactions. And this all comes down to how you want to mold the levers to your business.
This is a key high-level thing that was spoken about before in overview, 7 Levers episode here on PreneurCast. So you could argue that that is definitely one way of doing it. Obviously, follow-up marketing is a simple way of doing this. Postcard marketing, follow-up marketing.
A great idea you could be doing is if you are a landscaper or if you are a painter or if you’re a roofer, somebody that does something visual to a client’s property, for example, if you’re in that trade area; what you could be doing is standing at the front of the house as you leave, at the end of the job, taking a photo of how good the lawn and the house looks.
You know that that lawn is going to grow and it’s just inevitable that the weeds are going to get in there and things are going to change. What you can do is that 45, 60 days, 90 days later, using a service like Send Out Cards, send that client a photo of their house saying, “Hey Julie, thanks so much for letting us do your work last month.
It was such a pleasure. I’m glad the house came out looking like it does on the front of this postcard. If you ever just want us to come back and continue to maintain it and make it look like this all the time, just give us a call. We’ve got a 10% discount or a bonus for you,” whatever it might be. Very simple, non-threatening piece of marketing.
And someone walks out to their letter box, grabs that postcard out of the front of their letter box, looks at that photo and goes, “Damn, that house looks awesome,” turns around and starts to walk back into their house and realize that the weeds have grown. That the lawn’s there that’s getting a bit out of control now because they haven’t had time to maintain it, they’re going to go, “I want that look again.
I want that feeling again and that pride of having the best house on the street,” and they’ll call you straightaway. So that follow-up marketing is very important. Work out the service you offer, when is it time that it should be checked up. Dentists do this. I got a phone call this week from my dentist who I had some fillings and some stuff done.
They called me this week saying it’s time for a check-up. Do you want to book that in? Now I wouldn’t have practically called them if they didn’t call me but I said yes, let’s book it in. So if you practically follow these people up with postcard marketing or phone calls, whatever it might be, you will absolutely unequivocally get a 10% increase in conversion rate.
You just have to ask yourself the question, what is the next thing I can sell this client? Is it an additional service, a subsidiary service, or the same service again? So if you’re a painter, you can come back and sell them a different paint. We can come back and do your kitchen. We did the outside of your house last time.
Landscaping one is obvious. Plumbing’s a bit harder. Or electrical services are a bit harder. Maybe you can come in and do someone’s job to fix the power going to the air conditioner. That’s the job you’ve done as an electrician. When someone’s Googled you. Found your website. Called you up. You’ve gone and proposed really well. You’ve got the job.
You fixed their electrical work. You can follow up with an audit. You can say, “We’re doing an audit this quarter where we come in and check all your electricals to make sure there’s no chance of fire or anything like that as an idea. Working out what is that solution you can have.”
And that is what you need to go and market in some automated fashion whether it is diarized or an autoresponder through an e-mail service, or done through Send Out Cards at a particular date; working at some automated sequence to sell them again. So many tradespeople do a job and ignore that client and that prospect.
Dom: Yeah and it is. It’s all about this idea, really, transactions per period is most people go, they do whatever they were asked to do and they go away. You want to try and increase the number of times you do work for that client. Now you mentioned hairdressers and dentists and things like that.
One of the things that we said before in the 7 Levers and one of the most simple things is certainly for anybody who’s got any kind of things that they can return and do again for clients and that check list you just gave there. What is the next thing you could provide to them?
Is it the same service? Is it an auxiliary service? If you think your way through that, be ready when you complete the job to say would you like to book another whatever. A hairdresser will say, just before you leave, Would you like to book your next appointment?”
What’s wrong with a landscape gardener saying, “Would you like to book me to come back in six months and do a tidy up? Would you like me to do a winter tidy or a spring tidy?” You can do it there and then before you leave.
Pete: Yeah and I think someone like a computer repair company should be doing this as well. That’s a service-based solution. You can definitely class yourself as a trades person to a certain extent under that umbrella.
If you’re going to fix someone, you restore their hard drive or you do something for the computer, it’s an easy sale to say every three months let me come back for an hour and I’ll defrag and clean up your computer, and delete the trash and delete the old temp files, and make sure your computer’s running to get a little bit more life out of it. That’s an obvious and very easy up-sell.
You can be doing that stuff in an autoresponder series with not scaremonger marketing, that’s definitely not the term to use, but saying, e-mailing a newsletter every month saying, be aware of viruses this month. Or have you thought about defragging? Or have you thought about cleaning up your temp files or backing up?
Every month, you market to your list and your community and your past clients different things that you can do as a service. And then for a computer repair person, there’s plenty of things that you can be doing and setting up on a regular basis for your clients.
Dom: Absolutely.
Pete: And this brings us to the last lever which is margins. For a lot of tradespeople, their first reaction is, I can’t really affect my margins without increasing my product because I’m selling my labor. And absolutely, that is a concern. Now having the more apprentices and juniors on your team, which is where you pay their wage low and you sell their time high, is one way of increasing margins to be the slave labor to a certain extent.
But it’s one way of tweaking your margins. But very few, very few tradespeople who don’t on some level need some goods. Painters need paint. Concrete coverers need the chemicals to cover the concrete. Every trades person at some level needs their goods and services. Cleaners need chemicals obviously.
And one of the best things I’ve seen and I’ve spoken of this before on the podcast that can absolutely work for tradespeople if they look at it the right way and do it the right way is some sort of trade exchange. Like for example, Bartercard. You go and sell your excess time. So Friday afternoon, rather than knocking off at 3:30 and going to the pub, you do an extra hour and a half of work for a Bartercard client.
It’s time you wouldn’t have otherwise spent. You would have been spending it doing nothing because you weren’t flat out busy. You do that extra couple of jobs a week for Bartercard money. So it’s ‘additional business’ or free revenue, if you want to look at it that way like we spoke about and explained in a lot more context on that particular episode of the show.
You go out there and you do that extra business. You get the extra $200 of worth of trade that week. And then you look for a supplier of chemicals, or whatever goods you use for inputs for your service, and you spend that trade dollars there. You spend that $200 over there on that chemical.
So that’s $200 cash you would have to have spent that came in from the job on Wednesday at Julie’s house stays in your pocket, and the chemicals that you bought is being bought with that additional hour and a half time that you wouldn’t have otherwise had because you would have been at the pub because you didn’t have any cash work.
Bartercard got you that additional work. That’s $200 cash is now back in your pocket that you can spend on the family. It’s your $200 cash. It’s not your supplier’s. The supplier has taken Bartercard that extra time. And that is an absolute, unquestionable difference to the margins and bottom line of your business. So many people don’t think and consider Bartercard particularly in a service business as a very smart way to increase your margins very effectively.
Dom: Nice one. Like it. There’s lots of other things. Just consider for one second you don’t have consumables. I can’t believe it, but just in case. There’s always going to be something that you have purchase as a business expense. And there’s an opportunity in the Bartercard model to go and get that thing with the Bartercard trading model.
So yeah, using that down time or dead time or time you don’t have clients to build up your Bartercard balance is awesome. But it could be something as simple as having better business cards printed through a printer on Bartercard.
Pete: Yeah, absolutely.
Dom: That’s a business expense. Maybe it’s even having your vehicle serviced.
Pete: Any direct cost you have because that margins thing, as you’re saying there, Dom, is not just about direct margins; it’s also about overall profitability of the business.
Dom: That’s it. Yeah. Because so many people don’t see that as the bigger picture and it’s really important when we talk about this. And when we talk about the kind of foundational stuff of the 7 Levers, the margin isn’t just what your literal your margin on the sale that like if you were selling an item you would put an amount over the cost of the item.
It’s that overall profitability and effectiveness of your business, which you can address in a number of ways, which can include training your team. If you have got apprentices, improving their skill level can improve their efficiency and that is a profit center in your business. It’s improving your margins.
Pete: Yeah. And I had another idea around margins that I’ve completely forgotten. Oh, hang on, it’s come back to me. It’s all right. It’s come back. It’s definitely a good idea if it comes back. That’s my theory. If you forget it, it’s not a good idea. So it must be a good idea, guys, so take some notes. This is something we did in at the service side of our telco.
We have a lot of service work done around the country. So we have our technicians driving all across various cities around Australia doing service work. And one way we made everything more efficient, which at the end of the day directly affects the margins and the gross profitability of that person for the day, is we made sure we grouped our jobs by area and location.
For example, our technicians go to the north on Mondays, south on Tuesdays, east on Wednesdays, west on Thursdays. Now this has changed slightly, I don’t know exactly what days, the tech team manages all of that. But what that means is we’re no longer having all of this wastage time and costs for one technician to drive from one side of the city in the morning to a job on the north or vice versa.
Or if you’re a trades person, doing quoting on a Friday. So you hypothetically do northern suburbs Monday, southern suburbs Tuesday, east Wednesday, west Thursday, and then Friday is your quoting day. If you can structure your days a bit more effectively and efficiently, you get huge economies of scale. You can get more work done in that particular day, which at the end of the day means more profits for your business.
Dom: I love that. I remember you told me when we talked about this at another topic and you pointed that out, I thought that’s so logical. But it’s just great because especially the smaller businesses, you hear these people and you go to the pub at night and you’re like, “Man I had this one in the north this morning and then I was in the south this afternoon,” and so on.
And just it’s easy to get caught up in that and keep doing it. But if you can group these things together or look for other similar efficiencies in your business, especially if you’re having to move around or if you don’t deal with a particular type of thing. Yeah, that’s another way to address margins.
Pete: Yeah, absolutely. Those are seven different ways that people in that trade or service-based business can increase their profits. And hopefully, if you’re in a different niche, you start thinking about how you can apply some of these, what you’re doing and how that can affect your 7 Levers and increase the profitability of your business.
Dom: Absolutely. And just to reiterate, the 7 Levers is all about the seven areas of the business where if you just increase each one by 10%, you can double your profitability. That can be as simple as one more client inquiry a week, one more client converting to a sale per week, 10% more sale of goods or services, 10% more margin at the end of the business. Those little tiny changes all add up.
Pete: Absolutely. Absolutely.
Dom: Cool. Some great tips today. Yeah, I love doing these and I love seeing you respond to them when somebody comes in with a left-field inquiry. And you just pull it out and you change things around, and you come up with these new ideas.
You talk about stuff that you’re also doing in your real world businesses. Even though they’re like big, small or whatever. And we bring it all together. Yeah, another great episode and another great 7 Levers tips, in this case, for tradespeople.
Pete: Fantastic. Shall we wrap this week’s episode up? We’ll put a nice little bow on it and we’ll say thank you everyone again for listening to this show, and all the comments and support we get on iTunes. So please, if you do enjoy the show and have got something that you can value out of this, whether it’s more revenue, more time, more enjoyment out of your business, please let us know by going to iTunes and thanking us with a comment.
That is exactly how we want. We’re not charging people for the time we do here. It’s all about our ego and helping people with their businesses, so please give us a bit of a stroke by going to iTunes and leaving a comment.
Dom: Yeah, and if you’re enjoying these If I Was A… episodes, tell us first of all, if you’re in one of these businesses and we’ve helped you out. That would be great to know. But also, if you’ve got an idea for one that you’d like us to do. Another place you can go to, to leave the comment is PreneurMedia.tv, our website where all the episodes are stored.
You can get them there as well as on iTunes. You can download them or listen to them online, and you can leave the comment under each episode along with looking for the show notes with all the links to the things we talk about. Lots of ways to get in touch with us. We’d love to hear from you. Love your feedback. And we’ll see you all next week.
Pete: See you guys!
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Links:
Online:
www.websavvy.com.au – The site of Mike Rhodes, Google AdWords specialist
www.sendoutcards.com/7daytrial – Send Out Cards
Books:
Spin Selling – Neil Rackham
Influence – Robert Cialdini
Previous PreneurCast Episodes:
Episode 052 – 7 Levers of Business Redux
Episode 019 – Dead Bodies, Wedding Cakes and The Mirror Economy
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