Nov. 29, 2023

Ep 210 - Why It's Not a Pricing Problem

Are you leaving money on the table by undervaluing your electrician services? We, Clay and Joseph , have observed this common pitfall among new contractors, and we're here to help you navigate around it. We're emphasizing the importance of creating value for your clients, leveraging marketing for business expansion, and evolving from a scarcity to an abundance mindset. We believe in the power of data-driven decisions over subjective feelings when it comes to pricing and avoiding being another failed business statistic.

Are you ready to overcome your fears and raise your prices? We invite you to join us as we unpack the psychology behind pricing objections and discuss the importance of believing in your own value. We're also thrilled to celebrate the success of our listener, Dorian, who achieved a significant milestone in his business. We encourage you to take action, share your wins, and remember that we're here to guide you every step of the way. Tune in now, and let's start building your successful business together!

Join us LIVE 5 days a week on the Facebook Community page:

https://www.facebook.com/groups/electricpreneursecrets

And see us and our stories and wins at:

https://www.serviceloopelectrical.com

00:01 - The Challenges of Pricing for Electricians

09:09 - Pricing Confidence and Data-Driven Decisions

16:24 - Electricpreneur Secrets

WEBVTT

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Hello, hello, hello, and welcome back to another episode of Electric Purniers Secrets, the Electricians podcast.

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Hi, I'm Clay Neumeier and this is Joseph Lucani.

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And we're the Electric Purniers just a couple of electricians with business addictions.

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And welcome to our freemium program and your daily coach.

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Call the investments.

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For these calls, just your time, from the hot seat of your van, five days a week.

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It's totally fair to use everything we give you.

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It's promised to also take action, joe, how are you doing today, my brother?

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I am doing a hell of a lot better than yesterday.

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It seems like you and I had a little bit of a roller-versa here.

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I had been fighting the natural post-holiday cold while you were powering it through in my stead, and yet now I'm on the mend and it seems like you're the one who's under the weather.

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I'm sorry for that, brother.

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How are?

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you feeling.

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You know what.

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I'm not going to let it slow me down.

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I'm not going to let it cramp my style or my energy or let any of this energy get stopped or filtered in any way to help some electricians.

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Today, I promise you that man Actually yesterday on the show, someone commented a friend of ours commented and asked do we have videos or something to help new electricians start new businesses, like a new electrical contracting business?

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I think was the language he used.

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It got me thinking about today's topic and how important it is to cover that and really what gets in the way for new contractors.

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Yes, one of those first things is like well, how do you price yourself?

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I wanted to take a different approach, because we've talked about pricing many times, but I wanted to talk about why it's not a pricing problem.

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Give this some context.

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You start your business, you're wondering why there's more month left at the end of the money than money at the end of the month, and maybe you're charging somewhere between $70 to $90 an hour.

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You're still in time and material, sometimes flat rate.

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But even as you break through these flat rate jobs, you don't quite have the formula.

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You don't quite know why the job is being priced that way.

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You're just pulling it out of thin air and then you get a no, yeah, immediate concern.

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My first thought, and the thought of most people who were in that position, was did I charge too much?

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Such a shame it really is, because the thing is you have no reason to think that you've charged too much, but our knee jerk reaction and what our industry has taught us is they must have gone with someone cheaper.

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What are the odds that they actually did?

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More often than not, they just went with a better company, someone who had more trust, more respect, someone who they could identify with and have a better relationship with.

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That price is probably not cheaper.

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You just took the words right on my mouth when you answered this ahead of time.

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I'm like well, what is better?

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What's a better contractor?

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Isn't that kind of where we all set our prices to begin with anyway?

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There's this phenomena that happens we come into a market and we start calling secret shopping other electrical companies to find out what they're charging.

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Yeah, I've done it myself Call around and be like what do you cost to do this?

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What do you cost to do?

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this.

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Then we come to that golden scenario where it's like well, I know, I'll just do a little bit more for a little bit less, but the reality is that anyone, any stud out there, can lower their price to create value, but that can't be the only way.

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That is the race to the bottom.

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It really is.

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There's no rope at the end of it.

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Literally you can work.

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A good visual expression is imagine that race to the bottom is a literal hole and there's a rope that lines down there, but the last five feet doesn't have a rope.

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Once you get down to the bottom, you're stuck.

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Yeah, man, and you know what I'm seeing.

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This answered actually in a couple of ways now already.

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So it's like one is obviously it's it's that doing like what are we doing that's different than to create value, and we have had this discussion and we can a million times more.

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And it goes into, like all of our offer, training and everything that that we have within that, like in in Eric and Mandy's interview that we did.

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Mm, hmm.

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Or they saw on their fifth week with us, you know, five big days, five big sales that doubled their monthly revenue in their second month, which is incredible feat.

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But today I really wanted to go the other angle and say well, you know what the symptom of not wanting to raise your prices actually tends to come down to something else, joe.

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Mm, hmm.

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And that could be just the number of opportunities.

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Like am I putting too much weight on this client right now in front of me?

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Like I need this check.

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You ever feel like that?

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When I first started off.

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Yeah, I mean I remember there was.

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I mean I've been very open about that story where, like I would do night jobs specifically to pay for the materials for the jobs we were doing during the day and if we didn't make a sale, it just meant that I had to take more of my own personal and put back into the business and just keep doing it.

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So I remember when you got those nose, they hurt, they really hurt, because I guess I'm doing another zombie shift.

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If there's anything else that's as scary as raising your price for electricians, it's got to be marketing.

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It's got to be marketing, and that's exactly where we're going with this.

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The likelihood is that we're feeling the pressure to keep our rates low, to build value and to get more jobs based on the opportunities that we have, and that's actually a scarcity mindset around the opportunities that we have, isn't it?

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So if we wanted to drive up more opportunities, well, what would happen then?

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Well, if you drove up more opportunities, then realistically you would have less pressure on each customer, which, as a result, would increase your confidence or perceived confidence, and that perceived confidence in and of itself removes the stink of desperation, which then makes you more likely to get the sale.

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Nice touch.

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Stink of desperation.

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Desperation is a stinky cologne.

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It is, yeah, I mean it's one of those things where you can sense it, like if someone's trying to close you, there's usually an intention behind it.

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There's like I'm trying to close because I'm a closer Okay, that's one guy.

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I'm trying to close because I need to make a quota.

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But when someone's like I got to close because I got to pay for shit, that's a very different kind of person.

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You're like if you need the money, that bad, how good could you really be?

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Customers just want to get you out of their house at that point.

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Yeah, 100%.

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The other reality of this and we've touched on it before as well but the next inclination is actually not to present that in person, which only takes value away from this as well.

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So, even if I mean a lot of contractors early on find themselves in a bit of a catch 22 here, because it's like, well, I'm not sure what's going on, like well, even if I increase my, my, my rates and increase my leads, I'm more likely to have more opportunities.

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But I'm also feeling the forces to email it over now and rush through each of these leads which, as you know, with a higher price is is not conducive to building value.

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So we kind of end up going backwards here.

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Yeah, there was like big cringe when you said email them over because there's such a drive to do that.

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But I fear it all.

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It's based in the fear of rejection.

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You don't want to feel and have the customer say no to your face, so you'd rather have a less likelihood of closing it to avoid the shame of being told no.

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I'd rather believe they just didn't get my email and I won't follow up.

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But I'd rather believe they never got my email than they could have gone with someone else.

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Mm-hmm and To that and to no end it becomes like okay, well, now I'm forced to make an assumption about what happened here, and my assumption is because they no longer return my calls or tell me what's going on.

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My only assumption could be that my price is too high.

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So you see this come full circle back and we get on the call with electric printers that are facing these demons Every day of the week, where it's like well, I've tried a price increase before and that didn't work out, and I ended up back at this place.

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We're ended up back at this place and what's really happening here is inaccurate data, and Then something we call the law of separation is taking its toll.

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Have you ever heard of that one before, joe?

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I have.

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All right, let me explain this one again.

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Anyway.

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The law of separation is just where we're taking this day-to-day emotional feeling of this ebb and flow, this roller coaster that you're on, and we're then applying it to make decisions in the business instead of instead of what Making informed decisions.

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What would decisions be informed from?

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They be informed from the data.

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I mean realistically.

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If you have the numbers in front of you, you see everything that's in place and you're like these are measured results From time-stamped operations in my business.

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You can look at that more objectively then.

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You know I had a bad day, I'm feeling under the weather normally, I'm good.

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I went off process and like now you don't really have a clear reason why things didn't work.

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But if you were able to say I tracked it over a week throughout all the calls I did and this is the result from all those calls, I trust that report other than the first 100%, 100%.

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It's like I really enjoy now, instead of arbitrarily saying on a call.

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If I get on a call with a Contractor and electrician and I feel like a price increase is imminent and and required, and I'll literally show them the map of our electric burners across the country and how each and every one of them are somewhere between $300 and $600 an hour as a flat, standard, simple service rate to go and estimate their options and the work that they provide.

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That really helps because it's a data-driven.

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You can see it, there's a visual.

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You literally we know it works there too.

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So where we've heard it won't work down here, it won't work south, it won't work east, it won't work west of, it just keeps working everywhere.

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And it goes to show that the root of this really comes down to human psychology and opportunities, not a pricing objection.

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That price objection keeps happening to the people at 75 bucks an hour too, I mean, can I?

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make a statement of that.

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Yeah, man jump in.

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I remember when I was doing side work as a kid Like this is like trying to pay my way through college, kind of thing I was doing electrical work for $35 an hour cash and a customer told me that I was too expensive once $35 an hour to run outlets along the wall.

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That's what it was, and I look back at it now and I actually went to that customer years later and was charging him $300 an hour and he would pay it cash I.

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So it shows that it's not the price, it's the person behind it 100% and this day and age, spending any amount sucks.

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Yeah, let's be honest, it's hard out there.

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Inflation's risen, it's more expensive than ever.

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We just can't let that be our defeated mindset.

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We can't let that get in the way of your premium service Because, at the end of the day, the people that are calling you, requesting your services, reaching out for you, talking to their friends and getting referrals they're not electricians.

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They can't take care of their own needs and if you don't do it in a sustainable fashion, then you just become one of the statistics that falls down in business, like the other 75 to 80 percent.

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Wherever the small business that is today.

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It's a lot.

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So our only choice is really to set ourselves up for that sustainable success and take a run at it and do our best work.

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Build that value up, make sure you have enough leads, and that really brings us full circle, back to why it's not a pricing problem.

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You know what money is a problem.

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It's a problem.

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That's what we just talked about.

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It's a problem for a lot of people in a lot of places.

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You shouldn't bear that problem on your business.

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The pricing just needs to be done and it should be done right.

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Like on a call yesterday with one of our prospects and potential new members here.

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Honestly, you want to know when you're at the doorstep or when you're at the kitchen table building options, that this is what it really needs to cost, what their price really needs to be, because just setting an arbitrarily leaves a massive gap, leaves a gap in your heart and in your head.

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Setting prices arbitrarily won't get you there sustainably, even if you got through it and it through your integrity wall for a little bit.

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What are your staff going to say when they see the difference?

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No, I had to.

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Sorry for the one brother.

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No, you're good man, I love talking to you.

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So, in addition to it, I feel like when you know your price, it helps you in a major way that a lot of people don't realize.

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And that's, let's say, you didn't know where your price was and the customer says why is it so much?

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You have nothing to say.

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But all price objections are rooted in their disbelief.

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They don't believe in what you have and the only way to overcome it is through your own belief.

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So it's a difference in conversation compared to well, this is what I got a charge to have a sustainable business versus, like I know, hand of God, this is the lowest number that I can give you without me doing this job at a negative Like in all honesty, we always tell people that they need to raise their price and people don't always receive it the same way.

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But if we were put into the terms of if you had an envelope full of cash and I handed it to you to do the job and you didn't charge enough for the envelope, didn't have enough cash in it, would you be able to take money out of your own pocket to put back into the envelope and everyone would be like, no, that's what's happening with the business.

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If you see it in that light, it becomes easier to swallow it.

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You have to raise your price 100%.

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So if you're feeling fearful, if you're feeling the scarcity around the opportunities and that's the reason you haven't done this pricing exercise yet then absolutely take the plunge.

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That's my first action.

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Just take the plunge.

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And, Joe, I'm just going to run rampant here and steamroll this whole thing, if that's okay.

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But what we're giving away and what we're giving away is really relative to Dorian's interview last week, that Service Leads now value piece that we've never given away before.

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But this is the real problem.

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You're feeling the pressure of keeping your pricing low because you don't have enough opportunities and you don't have enough practice.

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So, even as we, Dorian, actually said on that interview, heading straight for a service like Angie Leads, where many people are running away from it once you raise your price, and the reason why?

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Just to practice the value price objection.

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So this week, right now, it's Action Wednesday.

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We're giving this way the Service Leads Now checklist so that you get enough leads on your calendar, so that you get enough practice, so that you yourself can realize and prove to yourself that this is not a pricing problem, it's a quantity problem, a quantity of opportunities.

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Joe, did you have anything else to throw in this one before we shut it down?

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Really.

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I just wanted to say that when people are worried about their price, it also comes down to they're worried about what people will receive them as.

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And when you're more confident in your price, you can also show that confidence in your body language and your tonality and everything you do.

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So if you're worried and saying, well, how can I do it?

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First understand why you need to do it, then physically see the number and then accept that that's your reality.

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And when you can accept that's your reality, you'll be able to speak to it with more poise and more confidence and more strength.

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Love it, man.

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I love you guys.

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If you're listening or watching engaging with us, live on the Facebook group Electricpreneur Secrets, if you're listening to this or live with us, know that you're already in the value stream.

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You are an Electricpreneur, you are with us, learning from us, and so take those wins you get and report them back to us.

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We'd love to hear how it's going while you utilize these strategies.

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Everything that we give again, take everything we give Just promise to take action.

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And if you want to rise up in that value stream, then just reach out.

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We'll tell you a bit about the program and how you can get started building up your business, maybe even hit those milestones, like Dorian did last week.

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Cheers, joe, thanks for joining and thanks to you if you're listening.

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Truly a pleasure, see you all soon.