Sept. 11, 2023
Ep 153 - Why Generators Are The MOST Profitable Electrician Niche
Are generators unprofitable in the electrician trade, or are you just not utilizing them effectively? That's what we're here to explore with Joseph Lucani, a generator specialist who's going to change your mind about this profitable niche. Joseph sheds light on how generators are not just installation tools, as many wrongly believe, but relationship tools that can establish long-term service connections with your clients. This episode will teach you all about the benefits of a multi-year maintenance agreement and how it can boost customer loyalty, making clients think twice before shopping elsewhere.
Switching gears, we also delve into the experiences of working with diverse generator brands with Joseph sharing his first-hand experience as a Champion Dealer, and how this venture opened doors into the profitable portable generator niche. Who knew variety could be so fruitful? We'll talk about how offering a variety of services can meet all of your customer's needs, subsequently cutting down on marketing expenses, and enhancing your profitability.
Lastly, we'll discuss the priceless value of customer feedback, both the good and the bad, and how it can be a tool to improve your service and boost your business. So, whether you're a seasoned electrician or a newbie to the trade, this episode is going to flip the script on everything you thought you knew about generators. Tune in now!
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00:02 - Generator Profitability in the Electrician Trade
13:00 - Working With Multiple Generator Brands
19:35 - Importance of Generators for Customer Relationships
WEBVTT
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Hello, hello, hello and welcome back to another episode.
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Another fantastic Monday, joe, With us, me and Joseph Lucani, the sales boy, here with you for another episode of Electric Pernur Secrets, the Electricians podcast.
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Joe, we're as late as we've ever been on this one, a little over an hour.
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But, president, not Perfect, we're doing everything we can to give this free value away.
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Brother, how are you and how is your weekend?
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I am doing absolutely amazing today because one without giving too much away, this topic is so near and dear to everything I love, so I'm super pumped to be on it, even if we're an hour late, worth it.
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As far as how the weekend was, honestly it was a great weekend.
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We had a situation where it was extremely humid and raining constantly, but I was able to spend a lot of time with the girls.
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We had a lot of time with the family.
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It was just really good for some R&R.
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What about you, brother?
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I love that man.
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Yeah, same thing.
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Family time did lots of chores, got some gardening done, still a bit of sun here, still enjoying.
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So, yeah, making the most of that.
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And we've been itching to have this topic.
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As you know, it's one of well, you know, of course, but as our listeners know too, joseph was a generator specialist in your business, former business Patriot Electric, right, and you guys made a very strong go of that from the beginning.
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Now I want to unpack a bunch of that today, but really, what our intent is today is to shift some beliefs around it, and I think we got the attention of some people, or maybe the hour late to benefit, because we've got eight people live with us already.
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But we need to answer this question it's counter to contrary belief why generators are the most profitable electrician niche, because I've heard the opposite.
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Joe, I've got to tell you this.
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I've heard other massive coaching firms even saying that you know what?
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I would avoid these because there's a lack of profitability.
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And yet that was not your experience.
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So I'd love to jump into this and really explore, like why are people holding this back?
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Why are people feeling held back by it?
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Why haven't they gone all in on generators yet?
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All right, awesome, you want me to just start firing off?
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Let's go, man, let's go.
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So the first thing of why people say that generators aren't profitable is because they're misunderstood as to what a generator's actual focus is Like.
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Why do we even want to offer them in the first place?
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Now, if you were to just do installation meaning that I don't do service, I don't do maintenance and I'm not offering enhancements customer calls for 11kwGenerac and I'm going to show up competing with others on 11kwGenerac you'll find that your margins often have to be much tighter because most electricians can install a generator.
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Hacks can also install a generator, literally.
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Some of them come with easy to follow guides Like hey, go ahead.
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Yeah, I don't want to interrupt.
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No worries.
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We can have situations where, like the hack electrician says I'm going to call the provider, they're going to have the generator in your driveway, it'll sit there till I can show up.
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You do the permit, you do the inspection, you coordinate for all the maintenance, you contact the town and the utility.
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I'm just going to turn the wires and turn the tools.
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That itself is not profitable and that reminds me.
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sorry to interrupt, but that reminds me of just like a standard opportunity call, where maybe someone wants an upgrade in their home but they are fielding other quotes, and so what's likely to happen in that few quotes they grab, well, someone's going to give them a basement price, right, go ahead.
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I saw you winding up, I set you up for it and then stole it.
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I'm on the tee right, you can tell.
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When it comes to generators, for all of you guys who listen, I speak with a particular level of fervor because I truly feel that generators are one of the most misunderstood avenues of the electrician's trade.
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Where it actually becomes profitable is this.
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A generator isn't just meant as an installation tool.
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It is a relationship tool.
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What you'll find with generators is as you become more familiar and specialize in them.
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There's numerous enhancements you can offer.
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There's numerous installation designs that you can provide.
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But really where it comes to thrive is when you say I am setting an ongoing service relationship with my client.
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So I'm going to paint a picture for you.
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Let's say we installed a generator with no enhancements, but a five-year generator agreement or a four-year or three-year.
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How many a multi-year plan Did you?
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Don't mess up this relationship.
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If the client had any electrical issues in their home, who would they likely call to come take care of it?
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You.
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Yeah, because provided you didn't drop the ball and fail to mention that you're an actual electrician, a master electrician, and you do more than just generators, and make that clear with your process.
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Correct.
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That has to be established that you're both a residential service specialist as well as a generator specialist.
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And that word specialist is very important as well, because when it comes to purchasing of generators and clients' opinions, they will go and often pay more for the safe bet of saying I know for a fact, even though if you're more than someone else, you're more than acne electric.
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I know that you're going to do the right thing.
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I know that when it fail, when I lose power, I won't lose generator functionality as well, because I trust that you know what you're doing and I'm safe and comfortable with that.
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Does that make sense?
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It does totally, and I know there's a bunch watching us right now.
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So if you guys are already installing generators, go ahead, go in the chat on our Facebook page and let us know.
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Yes, we are installing generators.
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Are they profitable for you, yes or no?
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Because we're unpacking a bunch of that today and this whole week, guys.
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So don't go anywhere.
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I can't even wait to tell you what we're going to give away on Wednesday.
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It's huge, but you know what?
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I'm hearing?
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A couple of different things, but one thing that rings in my head and I can't shake man, and we talked about it before motors, equal maintenance.
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That's true, maintenance is good and motors equal maintenance.
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Where else are there motors in your residential electrical system?
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Steve, that's a lot of hard times for a lot of other people, right?
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Because if you think about your electricians, what motors are we typically working with?
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Unless you're getting involved in appliances or in other trade facets, you're usually not having a lot of exposure to motors, at least as a residential specialist.
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So if you had that example and you were familiar with motors and engines and you were learning about them through generators, you now have the expertise to branch out into other avenues that you would not have had training on.
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As an example, I am so confident in my ability of taking apart generators that I learned how to diagnose appliances because I started learning how relays worked.
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I learned okay, I understand how to figure out the difference between a rotor and a stator and how to figure out what's faulted in it, what's going on in the magnetos?
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There are things that go on with your systems that you can apply to other avenues that you would not have had the knowledge to prior to that exposure.
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Which also enhances your ability, trust and authority as an electrician.
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Correct, you know know more, speak to more and can demonstrate more specialist knowledge than your other residential electricians, unless I misunderstood that.
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No, you're completely correct, and I can give a very practical example of what that would sound like.
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So, realistically, let's say you have two people, one who works with generators on a regular and one who just installs them.
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Customer has an issue where they're saying the generator works but doesn't quite sound right.
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Right, the installer goes out, he presses it in manual mode.
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The generator runs rough, but they put it on.
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You're getting your 120, 240.
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It's working.
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It should be fine, right?
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Problem with that person is they found out that you turn power off and for some reason it fails and they can't figure out why it must be a problem.
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We'll get to you when the storm's over.
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As a service specialist, I would be listening to the engine.
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Is it starved, Is it hunting, what's going on with it?
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And my first thought is if I hear it running rough, I'm going to test it under load, not just during manual.
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So I would see that the stepper motor is having an issue and that there's a problem with the fuel actually physically getting to the unit, or that the gas is undersized or there's too much load being put onto it.
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And now I don't have to wait for the customer to lose power in the storm to figure out it doesn't work.
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I found out now.
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So I've actually figured out an example where one person says, yeah, everything's working fine and ends up with a warranty call.
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We do a diagnosis, find out it's not working fine and end up with a repair that we can sell today and now having a customer be safer during an outage.
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So both parties win.
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I love that, and that's not the only enhancements Like, really, there's a bunch of reasons for this right More revenue, more profit, more trust, more lifetime value, which is a huge, hugely, hugely under appreciated aspect of your business.
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In fact, we know and listen to as mentors of ours people that spend most of their journey focusing on expanding the client experience instead of expanding on new clients.
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Does that make sense?
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So, not to mention more exposure to other industries.
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What do you think that means, like this more rounded exposure to other industries, joe, when you're in this generator niche?
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So there's another fun example that I can come up with was I primarily work with residential grade generators.
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Of course diesels there's liquid cools, we always touched on those but when you understand how certain systems work, you know how other systems work above and below it.
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Like, if you know three phase, you'll likely understand single phase as well.
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Residential motors are similar to industrial or commercial grade motors.
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So being able to say yes, I can attempt that, or yes, I can get involved in that, opens more doors.
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So, like there was examples where a customer we are doing a service change with and he wanted to get a panel to like.
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This whole goal was relocate the panel, but we recognize that at his size home he needed a 30kw and he wanted a diesel.
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If we didn't know generators, we would have lost that bid or lost that job, because I would have had to say you know what I'm sorry, I'm not familiar enough with this to really court it effectively and someone else would have gotten the total job Instead.
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Because we knew residential enough, we knew where the similarities were and it wasn't such a leap to break into those larger scale projects and then we were able to win the whole job and then the lifetime value of that client.
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Totally.
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I want to deep dive a little further and do another aspect of this Also, as we talked about how sure a base installation could leave you without a ton of margin in there.
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But that's always kind of the case, isn't it, when we sell our base option.
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And to those of us listening who are just on one option, maybe still, I would say it's progressive right, we're going to get out of this.
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Look at you there, look at you there.
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This is the danger, right.
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More options means more likelihood for a massive VIP offer, which means more likelihood that you're going to be extremely profitable and have a longer relationship, or even just as we've talked about this concept of making a roadmap out of your options, so it's not even like I'm trying to sell you everything today.
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It's here's everything we could possibly do to you, and we're committed to serving you at the highest level.
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Knowing this now about your electrical system, it is.
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We add these options for generators too.
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What's going to happen to that profitability, man?
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It's continuing to grow up, and I just wanted to touch on one thing before we moved on, which was because you brought on a really great point, which was these are things we can continually talk about, but it's also an ethical way of bringing it up as well, because part of our process is we need a because reason for everything we've offered, right, I'm doing for you, because Now, if you had a strong because reason for every line item now, when you sold that multi-year maintenance agreement, you were ethically allowed and almost obligated to an extent to say hey, I know that we talked about this last year.
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We offered it to you because we felt it would benefit you in this way.
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If you don't mind me asking, why did you feel like that wasn't important to have, or why did you choose to not have that?
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So, every single year, you have the opportunity to present them pre-made options that you already built.
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So just one option sheet could lead you to year after year after year of upgrades and enhancements.
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Definitely, yeah, massive.
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And ultimately, guys, what this leads to, ironically, is less marketing expense.
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So, again, improving the profitability of your business and we're going to get into supporting that with Joe's personal experience and even some of what our clients are seeing on the inside track of this service loop electrical movement, where we're helping electricians, master sales, simplify pricing and deliver premium level service and, at times, decide on a niche.
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Now, this is just one of the often unspoken advantages of working with us on the inside track is Joe literally built a business off of this gen specialist niche, so there's an added advantage of having that exposure to someone like yourself and when you do as we're articulating, your marketing will actually be less because you'll be in a higher demand for a more specific piece of the market.
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Does that?
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make sense, joe, it really, really does.
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And can I touch on that for a light moment.
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Please.
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Okay.
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So one of the main benefits that I found from niching was you get to choose and allocate where your clients are found, as well as which clients you're gonna be lined up with.
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So we're gonna get into further down these episodes what kind of people are buying and why they want to buy.
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But as a generator specialist, you'll have the position of saying, okay, I'm working with either homeowners who need what I have and genuinely want it, business owners who see a specific need for this, or people who are in emergency type situations that need the immediate lift.
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All three of those particular demographics produce wide ranging branches off of each one.
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So just by being that main focal point that says for each one of those niches they'd want to be like, yeah, you're the kind of guy I want to work with because of X, which we will get into, it'll be so much more effective because more hands will come up from one ad versing.
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You need to constantly hit ads for every one of those demographics.
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Totally, totally man Sheer interest.
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That brings up sheer interest when you're driving down the block.
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People just come up and ask you oh, you're a dealer.
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I love something else you said, kind of offline but you were also a champion dealer, is that right?
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Yes, yes, I was.
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I said that a little bit of a laugh.
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Yes, but how many champion installations did you actually accomplish in your time as a dealer?
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Zero, zero installations.
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Why do it?
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then, Okay, it's actually kind of funny.
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Well, we got into Generac, Kohler and Champion to cover the three main aspects of generators.
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Kohler is the highest quality brand that I will swear by and was usually allocated to the most premium people.
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They knew I want Kohler.
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That was that the majority of people are going for Generac.
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It is a quantity over quality from my personal experience, and it was very great because a lot of people associated Generac with Generator.
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It was a series of Xerox 2 copier right, so we would get that demographic.
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But Champion was a very particular thing.
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Champion was this up and coming brand at the time where not a lot of people were very familiar with it.
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It was seen as an economy level entry point.
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But it allowed us to say that we specialized in multiple brands of Generators, including off-brand Generators.
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That way, if you had the option of working with someone, you would see multiple dealer signs on someone's van.
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What would that communicate if you saw someone who could work with multiple specialty types?
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That you are the specialist.
00:17:11.584 --> 00:17:11.944
Correct.
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You know more about Generators and the various types of Generators and even if I went and did a shitty installation with Hack Job Joe not you different Joe with a Champion Generator, that you could still be a point of contact to help us with the troubles we're having with that system.
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Correct?
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And the main benefit is, in addition to now being seen as a wide branching specialist, in addition to having a specific unit for each targeted demographic, we found that more people searched Champion for portable Generators, which then got us into the portable Generator niche.
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So you had ultra premium doing HoloHomes, automatics of Colors, essential Circuits being done with Generacs, portables being done with Champions and a cross mix of each based on what the particular option that best fit the client.
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And, my favorite, a process to address all of the needs of every client.
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Every time you came back for maintenance, inspection, warranty, technical upgrades any of it.
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Correct, that's going to be one of the biggest reasons that anyone would say this isn't profitable.
00:18:24.385 --> 00:19:12.721
Because by my math guys maybe I've got this wrong maybe something changed where we price electrical work differently than we price Generator work, but as far as I knew, using your service rate which was determined to be profitable for your business and offering options, that then the profitability increased as your level of service did, that Generators were no different, and thus I would like to consider this debunked and ask you for some personal feedback from your personal experience and your story, including, if I can begin that reference by saying is it true or would you say, would you agree with sort of the blend of the balance of your Generator versus Residential Specialist work that we kind of talked about a bit before being about 60-40?
00:19:12.721 --> 00:19:14.859
And can you walk us through that a little bit, joe?
00:19:15.342 --> 00:19:16.364
Sure, if you have any help with that.
00:19:16.364 --> 00:19:24.347
So the numbers are correct, but they might not be in order that you originally suspect, because some people look at you and say you're a Generator Specialist.
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60% of what you should do is probably Generators Incorrect.
00:19:28.163 --> 00:19:34.646
Primarily, what we did was Residential Specialty work, but the Generators were about 40% of that.
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The benefit of doing Generators is that they are a stepping stone to a longtime, lifetime relationship.
00:19:41.397 --> 00:19:57.261
So what that may look like is I know Generators to such an extent that I can compete against most people and have enough of a value and enough of an authority on it that where it's worth paying a higher investment for that safer bet.
00:19:57.261 --> 00:20:11.944
Once you're involved with that customer and you're showing them the white glove experience and you're showing them that you can serve them at the highest level and that you do everything except for they have to write you the check every other aspect is handled.
00:20:11.944 --> 00:20:18.316
Now it becomes easier for them to want to invest for their projects electrically into you.
00:20:19.541 --> 00:20:23.530
In addition, we loved selling multi-year maintenance agreements.
00:20:23.530 --> 00:20:25.065
That was our stick.
00:20:25.065 --> 00:20:27.026
We loved doing multi-year agreements with people.
00:20:27.026 --> 00:20:29.963
So every year we came back.
00:20:29.963 --> 00:20:36.006
It was another touch point and another vote of saying wow, this company gave me a great experience.
00:20:36.006 --> 00:20:40.009
Wow, they gave me a great experience year after year after year.
00:20:40.009 --> 00:20:52.003
So when they had electrical issues, or they had a project concerned, or they wanted things upgraded or installed new, they already had an electrician who had been wowing them for the past four or five years.
00:20:52.003 --> 00:21:02.648
So we became the people where generators were just the foot in the door to get these kinds of jobs that we wouldn't have had the option of having otherwise.
00:21:02.648 --> 00:21:10.345
And it was a blue ocean, because if they already liked, trusted and respected us, there was no reason to keep shopping it out.
00:21:11.548 --> 00:21:12.029
Why would they?
00:21:12.029 --> 00:21:14.173
There's risk every time?
00:21:14.234 --> 00:21:14.779
you do.
00:21:14.799 --> 00:21:20.586
And now that you've set the bar in differentiation and being a premium service provider, what would happen even if they did?
00:21:21.621 --> 00:21:25.329
The benefit is it's actually great feedback one way or the other.
00:21:25.329 --> 00:21:29.229
Ideally you run the play, you do it right.
00:21:29.229 --> 00:21:39.471
They would see the night and day comparison between having someone come by who doesn't have a process and isn't aimed at serving at the highest level get in, get out, kind of guys.
00:21:39.471 --> 00:21:46.124
Then you'll be like yeah, I'm never going back to them again, I am going with the provider, this is the person I want to work with.
00:21:46.124 --> 00:21:48.423
So you actually have clients.
00:21:48.423 --> 00:21:52.779
If they even tried going elsewhere, they'd be like, nah, fuck that, I'm going with you guys.
00:21:52.839 --> 00:22:04.469
Or it's actually an amazing way to get good feedback in case you did something wrong, because a lot of times when people don't have something go well, the client just disappears.
00:22:04.469 --> 00:22:07.673
They don't call you back, they don't tell you what's wrong, they just stop calling you.
00:22:07.673 --> 00:22:17.410
But if you had a multi-year agreement with a customer and you gave them a bad experience, they're not going to just chalk up $1,200 and say, yeah, no, we're not going to work with you.
00:22:17.410 --> 00:22:20.247
They're going to tell you exactly why they were unhappy.
00:22:20.247 --> 00:22:33.484
And the benefit there is that now you have the means of improving your service for all of your clients, and the customer has a vested interest in wanting to see you improve so they don't lose their investment and faith in you.
00:22:33.484 --> 00:22:44.785
So, whether you did great, you're now in a position where they don't want to leave, or whether you did bad, you're at least now having the opportunity to correct it, or you wouldn't have had that opportunity before.
00:22:46.079 --> 00:22:46.650
It's massive.
00:22:46.650 --> 00:22:48.439
This is a massive takeaway.
00:22:48.439 --> 00:22:50.048
Whoops, does that make a bunch of noise here?
00:22:50.048 --> 00:22:54.448
This is a massive takeaway and I just want to highlight the numbers for a second.
00:22:54.448 --> 00:22:58.249
So you did a consistent $1.3 million out of your van.
00:22:58.249 --> 00:23:04.971
40% of that roughly year to year, was generator initiated contacts.
00:23:04.971 --> 00:23:12.544
So over $500,000 in sales roughly would have come from that initial generator offer and maintenance packages.
00:23:13.339 --> 00:23:14.826
That sounds about right.
00:23:14.839 --> 00:23:32.570
The other 60%, the other $700,000 to $800,000 a year, roughly again dealing with averages here, right, could have then also be from your explanation in large part driven residential service from the generator contacts that you generated on the front end.
00:23:33.000 --> 00:23:33.663
I see what you did there.
00:23:33.663 --> 00:23:38.930
I actually have a very specific example of how that applied in such a huge method.
00:23:39.740 --> 00:23:41.265
Let's hit it and then let's wrap this up.
00:23:42.559 --> 00:23:51.984
So I've made mention that there was a client that we sold over $300,000 to specifically as a residential client, and it wasn't like a hey, I've got a lot of money, I'm dropping it immediately.
00:23:51.984 --> 00:24:00.207
It was a constant ongoing relationship where we would do more and more and more and they just kept wanting more because of the service provided.
00:24:00.207 --> 00:24:05.650
The reason we got with that client wasn't because it was a premium person.
00:24:05.650 --> 00:24:24.444
It was a customer in the middle of God knows where, like an hour north in the boonies, in the middle of the woods, and he bought the generator himself and was getting bids to try to get the cheapest installation costs Because we won that job.
00:24:24.444 --> 00:24:37.623
He then saw enough faith in our workmanship to have us do more things and, as he realized we could do more things, all those other avenues continued to open up possibilities for us.
00:24:37.623 --> 00:24:47.096
So the benefit is is that, if you think about generators itself, maybe only 50,000 of that 300,000 was generator related.
00:24:47.096 --> 00:24:51.974
The other 250 would have been electrical service specialty.
00:24:53.660 --> 00:24:53.944
That's a lot.
00:24:54.185 --> 00:24:55.191
I'll take those numbers any day.
00:24:55.565 --> 00:24:57.211
Yeah, of course that's wild.
00:24:57.211 --> 00:25:23.190
So many of us again are just not honoring the service process and establishing something, a cadence that we could follow and train our team on, to be a consistent enterprise where we can even create those levels of opportunities, and I would say that, just like on an average service call for generators, that's got to be a big piece of why we aren't doing it yet if we're out there running our own electrical companies.
00:25:23.190 --> 00:25:31.510
Now, to wrap this up, joe, because we got four more days to talk about this, I just want to congratulate you again on your success in this venture.
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