We continue our fantastic conversation with Paul Kelly, President and Owner of Parker & Sons in this episode! If you didn’t catch the first part of our series with Paul Kelly, be sure to go back and read or listen to get yourself caught up.
Where we left off, we were talking to Paul about the “war on talent”. When things are going well in your company, you have to staff correctly to keep up with it. An ongoing problem contractors are facing is the so-called “labor shortage”.
Paul truly believes that simplicity is the key to everything, and that goes for both the war on talent and the labor shortage. There’s been a blue collar labor shortage every decade running all the way back to the 1970s, and perhaps even further in the past.
We hear it often: “there aren’t enough technicians!”. What Paul believes is that there isn’t so much a shortage of technicians, but rather a shortage of good technicians. All of the business gets done eventually, but how do you make sure you get yourself the best techs? Keep it simple. Paul’s solution is simply that first, you have to make the decision you’re going to solve the problem. Then. it’s only a matter of spending enough time, energy, and money to solve it.
If finding enough good talent is your number one problem, what are you doing currently to fix it? How much time, money, and energy are you actually spending towards fighting the war on talent? Putting up flyers, a few indeed posts, and offering a $100 dollar referral bonus just isn’t going to cut it.
You might be thinking to yourself, “Okay, Paul, great. Spend more time, money, and energy. But where, and how?”. If you want to solve any problem in life or in business, there is one thing you can always do, and it’s completely free. Meet often enough with the right people. That doesn’t mean once a month, or once a year. It means meeting frequently with the right people who are like-minded. This can be mentors, other contractors who have the same problem, or anyone else you think would be a value add. If you meet often enough with the right people, you will start coming up with a plan, assigning responsibilities, and holding each other accountable. You will solve things.
The second thing you can do is change the way you think about how much money you can spend. What is having the best tech in the area worth to you? $1,000? $5,000? $30,000?. That tech that works hard, stays late, shows up on time, and customers love. The one that can do anything, gets along with the team, buys into the culture, and has a great average ticket. How much is it worth to you?
Now, you don’t need to spend tens of thousands to get the right technician, of course, but if you’re not willing to at least consider spending more on talent, someone else is. What you’ll find is that, in most cases, a good tech is going to quickly recoup even a large upfront investment on their acquisition and training.
Paul tells a story of a time in his life when he had one of those “lightbulb moments”. His partner, Vince, came to him to ask about an ad he had seen from George Brazil (a local competitor). The company was advertising that, for $134/month, you could get a brand new, state-of-the-art, high efficiency HVAC system with all repairs and maintenance covered for ten years. Vince couldn’t fathom how they were able to do that. Keep in mind, Vince is an incredibly smart man. But $134 dollars a month with all repairs and maintenance for ten years and a new system? That didn’t add up.
Paul did the math with VInce. He assumed that it was probably a lower SEER rated system, albeit perhaps slightly higher than the minimum SEER and more than the average customer was used to. Next, if you multiply $134 by 120 months, you get just over $16,000. Paul and Vince would sell a similar system for around $8,000 or $9,000. That’s a big price difference! Vince, in a matter of minutes, went from saying “how do they do it” to “that’s a ripoff!”.
Now, Vince and Paul respect their competitors and certainly didn’t mean that George Brazil was trying to rip anyone off. Quite the contrary. Paul points out that the promotion was genius, because it solved a very important problem: overcoming the “grudge purchase”.
No one wakes up in the morning thinking to themselves “Gee, I’d love to spend money to fix or replace my air conditioner today”. This is what we mean when we say grudge purchase. It’s those expenditures that the consumer makes that they don’t want to go through with, but rather have to. Contractors will often talk about future pain, and doctors do too. Unfortunately, telling someone they will have cancer if they don’t quit smoking usually won’t get them to quit. Similarly, it’s hard to convince a homeowner that a new system would benefit them during a tune-up. The future pain isn’t here, and so there is no problem to solve in the homeowner’s mind.
Current pain can be a bit more effective, where you might discuss lowering energy bills with a new system, or how a new system wouldn’t need these expensive repairs. Still, it’s often not enough. What does work, however, is removing that barrier by making it affordable. That’s exactly what that $134/month did. Instead of staring at thousands of dollars, the homeowner is now looking at something they can afford—even if it’s more expensive in the long run.
The pain for paying for a $10+ thousand dollar system will always outweigh the pain of waiting until the event (the AC going out). Once you get rid of that pain and create affordability, you can create urgency. Urgency can be created through advertising, promotions, a sale, etc. Now, you have a home run.
At the end of the day, Paul really just loves the industry. Tricks of the Trade to Success was truly written to help other contractors, and it shows. Paul is quick to point out that everything in the book isn’t really new, and none of it is truly a secret. It’s mostly things that he’s learned from others along the way, and credits those who have taught him these valuable lessons. Still, it’s a powerful collection of stories and wisdom all in one place that will absolutely help contractors both new and old help change the way they think and improve their business and their lives.
If that’s not incentive enough, half of the proceeds for the book go directly to the Make A Wish Foundation. It’s a pretty quick and easy read, so if you’re someone who is intimidated by lengthy, wordy books, fret not! Read it, share it, and pass on the knowledge of the industry to those around you and the next generation.
If you’d like to get in touch with Paul or purchase your own copy of the book, please visit TricksoftheTrade.com.