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Economy is improving as Millennials lead

Jan. 13, 2018
The Millennials are coming along with the recovery. The economy is dramatically better than it has been through the interminably slow recovery following the recession.

The Millennials are coming along with the recovery. The economy is dramatically better than it has been through the interminably slow recovery following the recession. Plumbing contractors I’ve spoken with tell me they have backlogs similar to what they had before the so-called Great Recession. Officially, the recession began in December of 2007 and lasted until June 2009. The housing boom, which peaked in 2005 and 2006 at more than $600 billion a year, went bust, dragging virtually all segments of the PHVAC industry into a downward spiral. As we finally shake off the vestiges of the recession the millennials are coming into their own and are poised to be the driving factor for our economy.

Who are millennials? Also known as Generation-Y or Echo-Boomers (children mostly born to the baby boomer generation). They are people born between 1982 and 2003 and a recent report I read noted more than 50% of their purchases are made online. That means we had better adapt and change how we structure our business profit structure.

From my perspective, that will result in more structured pricing for routine installations like faucets, water heaters, plumbing fixtures, boilers, furnaces, air conditioning, etc. In most cases, we pretty much know the hours and miscellaneous materials required for those tasks: all you need do is add in the major components plus your mark up and then present that to your potential customers.

More than a few customers have checked online for pricing and virtually everything is for sale over the internet these days. Millennials do advance research like no generation before them and pour over online reviews: yours as well as the products. And don’t for one second think it’s over following an emergency replacement because they’re likely to do post-op research then bludgeon you over what you charged for the widget.  One millennial became so enraged over my refusal to break out pricing for all itemized materials and labor hours in a fixed-price proposal to replace an old boiler with a high efficiency modcon, he penned a poison review online in spite of the fact that it was only a proposal and not a bill for work already performed!

They want programmable automatic thermostats with geo-fencing capability that can incorporate room temperature averaging from room sensors.

Here’s what I do. Set up average installed pricing for products — your own flat rate pricing — and then you can back out the widget’s cost when Millennials let you know, “I can buy that online for X-number of dollars.” Back out your cost and don’t back out the sales tax. Why not give back the sales tax cost? Because they’re looking at costs that don’t include sales tax and, in many cases, might be purchasing across state lines where they can completely avoid paying state taxes.

Millennials will make up 33 percent of the U.S. population by 2020 and be 75 percent of the labor force by 2025. If you plan on being in business during the coming wave of Millennials, and you want to thrive, start planning your Millennial business strategies now!

How? By thinking like one. Imagine yourself in their shoes, just as you learned with your current customer base. Practice sales calls with someone else acting as a Millennial, or, better yet, talk to friends’ children born between 1982 and 2003 to get input on how they approach decisions for purchasing services and goods. Go online and read the widely available articles on Millennials.

Gen-Y doesn’t want to deal with manually moving about their homes to interface with appliances, light switches, and thermostats. They want smart homes they can control via their smart phones, tablets, and/or computers. No manual timers for their Christmas trees: a smart-plug that is programmable (and doesn’t lose its memory if the power is interrupted) — from the aforementioned devices — set it and forget it.

They want programmable automatic thermostats with geo-fencing capability that can incorporate room temperature averaging from room sensors (wireless, of course) that integrate with home surveillance video monitoring, smoke/fire/CO/burglar alarms, and that accept voice commands — like the ecobee 4 that incorporates Amazon’s Alexa. No need to look at the weather report — ask Alexa. Alexa: Turn on the kitchen lights. Alexa: Set the heat to 70.

As a Boomer myself who watched a TV where we only could receive five channels, had to rotate the antenna to dial-in decent low-res content, and, God forbid, had to get up and walk across the room to change the channel, I often wonder if the modern-day “improvements” are really good for everyone. He says while flipping the more that 300 channels, telling Alexa to turn up the volume, and turns off the lights while being spoiled by all of the wondrous advances in technology he has adapted to over more than six decades.

The economy is booming. New tax laws have been passed, which promises to juice and goose the economy. Housing starts have experienced phenomenal growth and much of that is being caused by Millennials. It’s a brave new world — now go conquer it!  

Dave Yates material both in print and online is protected by Copyright 2017. Any reuse of this material (print or electronic) must have the express written permission of Dave Yates and CONTRACTOR magazine. Please contact via email at [email protected].

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