Want more sales? Contractors often overlook simple steps that they can take to boost sales. Those that do not involve more marketing, more investment, or more work. Here are six.
1. Give Options
Whether you realize it or not, you are always giving options. Even if you only present one solution, you are giving people an option. The option is your solution or someone else’s or nothing at all. Doing nothing is almost always an option. When it is not, calling another company is usually on the table.
Three options is the traditional approach. This is good, better, or best. Given three choices, with no urging or effort to upgrade, around 30% of consumers will choose the better or best option even when it costs more. With a recommendation from the field, that number will go up. When people do select a better option, sales increase as well.
Every repair should include three options. They are making a repair, making a replacement, or making an upgrade. It is simple. For example, you might ask, “Would you like to repair, replace, or upgrade your toilet?”
2. Use Simple Pricing
We tend to overcomplicate pricing. Flat rate was a leap forward in simple pricing. Instead of quoting an hourly rate and quoting materials separately, we gave one price. While the flat rate price may not result in higher prices and sales than quoting prices separately, it often does because contractors want a fudge factor for the occasional long job. Thus, flat rate increases sales.
Simple pricing is more than flat rate. Assemble a package and give it a bundled price. For example, instead of simply quoting a storage water heater, quote a sanitary and safety water heater, which involves a mixing valve so that water temperature in the tank can be maintained at levels that will prevent the formation of Legionella while the mixing valves reduced the temperature of the hot water supplied to the house to minimize scalding.
3. Ask About Add-Ons
Fast food restaurants boosted sales when the order takers began asking, “Would you like fries with that?” Later, they began offering to supersize drinks. What can you add on your service calls. Would you like a set of undersink water alarms with that?
4. Sell Payments
Empirical research has shown that financed sales are bigger sales. Anytime a repair or product costs more than a few hundred dollars you should consider offering financing so that you can sell on payments, which appear much more affordable to most cash strapped consumers. Then, you can present add-ons by stating that the homeowner can get the add-on for only a few dollars more per month.
5. Raise Prices
Yes, the easiest way to boost sales is to raise prices. Raise prices by five percent and you raise sales by five percent and profit by five percent without any additional effort. For service and repair work, flat rate pricing makes it easy to raise prices.
In an inflationary environment, it is incumbent upon business owners to raise prices to keep up. Otherwise, you are subsidizing your customers. Moreover, given the rate of inflation, price ahead. Raise prices in anticipation that prices will rise over the next six months at the same rate as the past six months.
6. Offer Extended Warranties
Give people a five-year parts and labor guarantee. There are companies that will offer these for you to sell or you can carry the liability yourself. This can be offered separate as an add-on or part of a bundle for a premier or “best” offering.
Hopefully, you have already taken these six simple steps. If not, pick one and execute, then pick another. Instead of complaining about sale, make more sales happen with the same labor and watch your profits soar.
For more information on powerful plumbing performance, check out the Service Roundtable. It is contracting’s largest business alliance. Visit www.ServiceRoundtable.com for more information.