Simple actions will boost your profits

May 7, 2015
Most plumbers do not charge enough to operate a professional company If you haven’t raised prices in a while, try it Training is like bathing: it doesn’t last and should be repeated frequently The trick with add-ons is to focus on one at a time The first add-on to stress is a channel specific drain cleaner

Too many plumbers struggle when they should prosper. If that includes you, do not despair.  Three simple actions can immediately boost the top and bottom lines.

Raise prices

First, raise prices. Most plumbers do not charge enough to operate a professional company with well-stocked service vehicles and competent, friendly plumbers available to respond to emergencies without long delay, plus, deliver solid technical service backed by strong warranties and consumer oriented company policies. Thus, plumbers either subsidize the customer or cut corners. 

Do your customers need you to subsidize them? Do they want you to cut corners? Not likely for either. Yet, if you are not charging enough, you must be doing one or the other.

If you haven’t raised prices in a while, try it. Assuming you’re already flat rate, bump prices 20 percent. If you’re not flat rate, buy a book and bump prices.

Set aside 2 percent of sales as a warranty reserve. Then, you can cheerfully refund money when necessary without hurting profitability. Invest 8 percent in the business, split between marketing, training and equipment. Raise the quality of your service with your price increase to ensure you are not cutting corners, even unintentionally.

Keep the rest. You deserve it for the risk of operating a service business, the hours you put in, the capital you invest. You do not need to subsidize your customers.

Bump your training

Second, bump your training. Training is like bathing. It doesn’t last and should be repeated frequently. Train people on the products you offer, their features and benefits, how to recognize when a homeowner would benefit, and how to present them.

If you hold weekly service meetings, add a mid-week training meeting. If you train twice a week, consider daily training. If it seems excessive, consider other professions. Professional athletes train all week for three hour game. Could you train 30 minutes a day?

The nearly universal experience of contractors is performance jumps after a training class before eventually settling back. This is why the highest performing contractors train every day. They want to maintain a high level of performance. 

You do not need to do all of the training yourself. Ask your vendors to come in and train your people on how to sell their products. Look for online training programs. Invest in Charlie Greer’s Tec Daddy DVD program. There is no shortage of material if you look for it.

Focus on add-ons

Third, focus on add-ons. When you perform service, you cover your overhead. Thus, every gross profit dollar from an add-on falls straight to the bottom line. Talk about a profit booster!

The trick with add-ons is to focus on one at a time and, you guessed it, train on it. Teach your plumbers how to recognize an add-on opportunity, what questions to ask the homeowner, when to present the add-on, and what to present (i.e., create a benefit stack). Run a special promotion on the add-on that includes an extra spiff for the plumber.

Once your people become proficient with one, add another. But take care not to give them too many or they will not sell any effectively. Limit the number of add-ons you are actively promoting at any one time to three.

The first add-on to stress is a channel specific drain cleaner. Channel specific means consumers will not find it in a big box. The microbial products available to the plumbing trade are especially attractive. While you can make hay with any of them, I recommend Bio One because it comes as a pre-mixed liquid, in a female friendly container that’s easy to measure and use. Easy is easier to sell. The consumer doesn’t need to touch the actual product. Cleaner is easier to sell. The product also carries an EPA certification on the label. Green is easier to sell. 

Next, add flood prevention products. The best are the FloodStop products that will shut off the water supply to a particular appliance and sound an alarm. Installed in minutes, these are great profit generators. FloodStop also offers a whole house solution that you can install for less than most insurance deductibles.

If a homeowner balks at FloodStop, but shows interest in the concept, the fall back is to offer a no-burst washing machine hose and battery powered, free standing water alarms. These should be sold as high-margin products.

Finally, I would offer low-flow toilets. While this doesn’t seem like an add-on, when we recently conducted a nationwide survey of Service Nation Alliance members’ customers, we discovered that one out of seven homeowners have to plunge toilets at least once a month. This means there is a lot of latent demand. If your people will only ask a few questions, it is probable that at least once a week each plumber will encounter a homeowner who has a problem toilet.

Matt Michel is CEO of the Service Roundtable, contracting’s largest business alliance. To purchase Bio-One, FloodStop, no-burst washing machine hoses, free-standing water alarms, or the Charlie Greer Tec Daddy DVDs at competitive prices, visit

About the Author

Matt Michel | Chief Executive Officer

Matt Michel is CEO of the Service Roundtable ( The Service Roundtable is an organization founded to help contractors improve their sales, marketing, operations, and profitability. The Service Nation Alliance is a part of this overall organization.

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