KickStart: ‘Charging more’ let’s you pay more to attract better applicants! (And keep the great team you’ve already built.)
I’ve always pushed my students to “charge more”! Why? After almost 50 years in this industry (I started young!) I’m convinced the vast majority of residential service contractors do not remotely understand the TRUE COST of daily business.
But hey, I’m not really a ‘number crunching accountant’ type of guy! So instead, I just preach to my students:
1) “All other things being equal… its better to have LOTS of money instead of having NO money!!”
But the plot thickens! Thanks to good, old ‘supply and demand’ employees have realized that for them too “its better to have LOTS of money instead of having NO money!!”😰 (More workers changed jobs in 2021 than ever before in history!)
This means to compete for the ‘Very Best People’ you’ll need to ‘pay more’ which means you’ll need to… (Don’t rush me, Steve, I’m thinking!)
2) “I know, Steve! I need to (hesitantly) CHARGE MORE so I can PAY MORE to attract better applicants!” Yes!
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And yet this “PAY MORE to attract better applicants” strategy will probably have ‘consequences’ for you! Here’s a tough reminder…
Offering the higher wages new hires are demanding will have a ‘trickle-down effect’ in your company! For example, here’s how your increased starting wages will likely play out with your loyal, long-time staff…
Upset employee: “Steve, wassup with this help wanted ad you just posted for new job applicants? You’re offering new hires more than you’re paying me even after two years working my butt off here!”😣 You know, your worker is right! So this means…
3) “Ummmm, I’m going to need to pay ALL my employees more?” EXACTLY! Which means…
You need to raise your prices NOW! But fear not! Here’s the good news!
A) People now EXPECT you will be charging more! Thanks to the constant drumbeat of inflation news potential customers (and your repeat clients too) ASSUME your home services will cost more. BUT they won’t OFFER to pay more till you ASK for more by increasing your pricing!
NOTE: Stop fretting about losing returning customers. Click HERE for my slam-dunk ‘Rebooking Previous Clients after Raising Prices’ phone script. (Want more phone scripts and systems? I’ve gotcha covered!) And here’s another happy tidbit…
B) You don’t need to raise prices by a HUGE amount to pay more. For example, if you’re making a good profit at an average gross of $100.00 @ hour per on-site worker consider hypothetically raising your prices by 9.67%. (An ‘odd percentage’ is always more credible than the good, old 5% or 10% increase!)
If we round this 9.67% increase off to $9.00 per employee hour and stick 2/3 of it toward other expenses (inflation IS rising) you could still give ALL your workers a 3.00 @ hour across the board raise at no extra cost to you! (Yes, I know I’m painting with a broad brush here- you and your accountant will need to work your own numbers.)💲💲💲
Even more good news? If you have ‘Service Engineered’ your client’s experience they will be referring you like crazy! (Including online!)👍👍 These delighted customers mean deep-down-inside your first-time callers will only want YOUR company in their homes! (Callers may bluff but ‘stick to your guns’ and they will almost always cave in!)
Now… don’t you have some serious number-crunching to do?😁