Episode 5 - The 5 Common Pricing Blunders And How To Avoid Them with Mike Busher

Service MVP Sales Training Podcast with Joe Crisara

What are the 5 common mistakes that home service professionals make? In this episode Uncle Joe Crisara interviews Mike Busher and they discuss these 5 common mistakes many home service professionals make.

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Podcast Episode Transcription:

We would offer up to a 15 year warranty but the customer is also paying for 15 years of service with that so we can make sure that they're married together right I don't want to give you a 15 year warranty if you're not going to maintain the system so I make sure you have both welcome welcome to the service MVP podcast this is where you go to learn how to use pure motive service to create higher value to grow your results grow your results and now here is your host America's service sales coach Joe Crisara alright everybody welcome to the service MVP podcast my name is Joe Crisara America's service sales coach and I am here today with one of the people that I am most proud of as one of my students here taking our total immersion training his name is Mike Busher, Mike is a seasoned sales professional who's now doing coaching for service MP he also does a pricing meeting that's called our pricing profit tax which is made for service taking members to be able to price out their services the best Mike welcome to the program how you doing today I'm doing good Joe thank you for having me I appreciate and being able to talk to everybody today thank you for taking your time Mike at through a hard day of work you still have enough time to help all you professionals out there get your pricing set up so today's meeting is going to be called I'm in pricing blunders and how to avoid them Mike will be here I'm telling you some of the biggest mistakes that noticed with people that he's been coaching with over the last couple of months now in our company Mike welcome why did you tell people this little bit about yourself and some of the histories that people know who you are sure so I've been in the HVAC industry for a little over six years was able to start with the company here in the Twin Cities with genz Ryan plumbing and heating and they really gave me the opportunity to take anything and everything I wanted for training which included all the HVAC training technical wise and then on top of it Joe your process with pure mode of service and being able to marry the two of those together I've got a fairly lengthy sales career in other industries over the years but never was very successful or had the type of success until I saw your system was able to work there for about 3 1/2 almost four years as a coach and trainer manager and field technician and got to the point of being a $2 million producer as a technician and then decided I was going to take my show on the road and and went across the country and went to a little company a lot of people know called sky heating and air in Portland with Travis Smith and that's where I really was challenged #1 because it was a big challenge moving across the country during COVID and just was challenged on what I was capable of and there is capable of getting to almost half a million in a month in production and just learned a lot about myself in the process and then you're training helped to push that even further to push the envelope of what I wanted to offer to the customer like what was the output that was your highest output when you're there it's got 488,000 in a month which at the time was a record that record only last about 22 days somebody dashed it with 629,000 yeah just it was great being able to even put myself in that arena and never even thought that that was something impossible well Mike yeah you definitely have earned your stripes doing almost 3 1/2 million dollars in sales in a year and so let's talk about some of those common pricing blunders that people make Mike let's get right into it what is the first pricing blunder that you think the number one pricing bonder you see that out there making the general public people who don't understand their pricing number one Joe is going to have to be not offering premium mid Ranger economy choices what happens Joe is what I've noticed it's it's unfortunate but technicians and companies and owners in general think that maybe giving your customer one or two options is going to be just enough through the peer motive process I was able to realize that now if we can give them two premium 2 mid range and two economy options the customer is going to choose way more and it makes it that much easier of a process that they get to decide and uh what I've noticed is there can be a lot of variations people think just a good better best is OK that's even taught in the industry we we work in unfortunately for pure motive service we're able to take that to a whole nother level to be able to make sure that customers and clients are being given every option possible and that we don't stand in the way so offering the premium option first is the key to you're saying is that option I suppose it's saying now what do you say to the people who say Mike I give people a prices like that I verbally tell them the prices is verbally telling people prices is that enough is that kind of what you're talking about there still no Joe it's not verbally telling somebody that's lip service Joe right if I'm not willing to document and write these things down that customer has no benefit from from those options they have to take my word for it so when you say when you say offering the premium mid range economy prices you mean taking the time to writing down the price before you go over all the solutions with people as opposed to saying here's all the problems here's all the solutions and let me go look up a price later on is that some couple under what you're talking about yeah we're what we're doing is we're we're spilling our candy jar at that point Joe and the only reason I've gotten to this level today is because I've done it numerous times and you've scolded me on it like what are you doing what are you doing out there and then I realized oh crap OK I've gotta have a proper way to be able to control the flow of information to the customer doing it that way #1 just makes you look more like a professional nobody wants to look like the average Joe out there you know Chuck in a truck you know trying to offer more service Mike what's the difference in the good better and best and the premium what's the difference in the result if I were to show my cheapest thing first and trying to upsell versus trying to show the premium thing and then say here's the rest of them what's the difference in the result that people upgrading from the economy option well starting at the low end first sure everybody's gonna pick a low end option right but you're not really doing anything for the customer you're gonna have a lot more Band-Aid repairs you're definitely going to get a lot of callbacks versus being able to offer the top solution first getting that customer understand why you're offering these things to them why you want to help take care of their family and provide these different services based on the conversation you had that way you're going to have a much higher result statistically most customers pick in the middle anyway right and only I think 8% of people actually pick a Band-Aid when they showed the process properly nobody wants a Band-Aid they they've got a better self esteem for themselves than that right Joe right right all right Mike what's the number 2 blunder when people do their pricing what do you say there is so I would say it's not really being able to differentiate your options right I I've been able to see some options where somebody thinks that hey we're going to we're gonna change our flame sensor capacitor and then they give you know five years of warranty four years of warranty 321 and it's still only one repair right not being able to offer more and offer more service and all those different things along with that it is a huge blunder and a huge gap for that company so when you say the differentiation of the option you say the options when you're making premium mid range economy options the premiums that premium enough it's not different than the mid range it's the differentiation between the yeah there's no difference Joe yeah there's there's no difference because if the only thing that's different is is warranty and service you're just having a customer pay for extra thank you for for nothing we should be offering them more maybe you know filtration for their air filtration water filtration there's so many more things that the customer really needs that we need to zoom out and actually find out about that family and that customer like let me ask you a question how about if every option has like a lifetime warranty on it wouldn't that create value for all the options?

I'm working on it wouldn't that create value for all the options if we if all the options had the same warranty you would think so Joe but but no in the end it doesn't right because what's the difference so so if I get a warranty I could get a lifetime warranty if I just bought a Band-Aid option Joe is that what you're telling me nobody wants that right so you have to have some or or why would I buy the premium one if the economy one had the lifetime warranty too why should so either yeah it doesn't it doesn't work with that part so the options being too similar and the ones not truly being premium with better you mentioned the air quality the water quality better service the five year warranty versus no warranty at the bottom on the Band-Aid right is that kind of thing you mentioned there yeah exactly if you if you're replacing equipment I know one of the things that I've seen over the years we would offer up to a 15 year warranty but the customer is also paying for 15 years of service with that so we can make sure that they're married together right I don't want to give you a 15 year warranty if you're not going to maintain the system so I make sure you have both so the differentiation which would include the service and the warranty being better at the top premium option and also not being being not as good is really an important thing which is not much number 2 #3 I'm going to bring up which is not using financing we're going to go ahead and put that one up Mike how important is it to make financing the gift of affordability tell us about that I really think that's probably one of the most important things you could do just because in this day and age the one thing I hear constantly is money money money customers don't have money well if you're not showing them that you have the gift of affordability right we're right around the holidays that really wants a gift give them the gift of affordability and they'll see something that fits their budget but that also takes care of their entire family very few people want to shell out six seven 8000 and and sometimes up to 60,000 depending on what we're working with that kind of money and not have some sort of a monthly investment option now on that part of it there when should people offer that should be something like like how should we offer that monthly payment should be delayed payment like six months same as cash or one year same as cash or a monthly payment because everybody says financing but exactly how should that be done because I think that's where people are kind of got kind of out of step on that right we all for sure Joe there there's a couple of different ways you could do it I would say personally that the larger the project you want us try to stretch that payment out for that customer and give them a a lesser monthly investment if it's something you know you could put a dollar amount on it hey 3 to $5000 so you get a 12 month no interest pay it off in a year and then the bottom option could be hey you just pay out of pocket for that one nine times out of 10 you're gonna get that customer to to buy a better option for themselves their family just based on the opportunity that they have to be able to make a small monthly investment and know that it's all taken care of and given that Peace of Mind Mike what is the next blunder of going on to #4 now what's the 4th blunder that people when it comes to making their prices for customers I would say that the fourth one would be the disclaimers that maybe telling clients to do things themselves or that the different things we won't do right there there's some ways that we can add or take away value from our options right so if I told you yeah you can do the bottom option here Joe but you're you're gonna have to do some drywall work are you OK with that Joe no most customers don't want to touch drywall right right right I don't wanna do it I I could do a lot of this stuff you could do a lot of this stuff but most customers are gonna say no I don't wanna do that so we can add or take away value by making sure that we're we're having those conversations and those disclaimers with the customer so how can we then like I know you're saying tell people to do things themselves like isn't it common that a guy service tech would tell somebody how to change their filters in a furnace are you saying we shouldn't be telling on that what should we do instead of telling them that how could that work well they definitely could do that job but what if it was an option where I came out to the house and I changed it out twice a year for you Joe when I was here to check on the system would that be OK would you be OK with that finished like 12 times a year like every month like how would that work you come out well in the bottom option it does Joe I do have some options up here at the top that you could actually have a much nicer system and you don't have to touch it you didn't you said you didn't like going in the basement down the steps right spider webs down there and everything like I hate that yeah yeah that's my job and I don't even like doing it right you live here something like that even a disclaimer like the warranty is not good how about this one you gotta buy a service agreement every year how do you offset that about saying you know that what if the guy doesn't buy a service stream he doesn't maintain the equipment how that's a disclaimer there how professional offset that problem well the the the number one way is just to build it into your options automatically right if you're out there you're showing a customer options for repairs from five years down to one or even a Band-Aid having a preset price for five years of service agreement with the warranty included doing the same for four and three and two and one and it's just the way you run to operate your company and to operate your business don't give them an option we want to maintain this we want to protect the warranty if you saw the media filter and you say well this thing's not gonna work if you change the filter so so so this is so we can't guarantee the filter if you don't change them so you gotta change them once a year you gotta go to the store and pick them up once a year or order them online or something like that wouldn't that are you fair to say that people do that well what else can we do well a true service provider Joe is actually gonna offer them more of those consumables than have them delivered right to the house I would appreciate knowing all my water filters for my RO system are sitting downstairs and just need to be changed from the technician gets here you got this final one which is number 5 and then we can still talk care about this after we get this final one out so the disclaimers and presenting the people for things we don't do or things that they gotta do because somebody shouldn't feel that's #4 what's number 5M it was kind of goes into both for salespeople and service people go ahead and talk about this one yeah Joe this one is a is a big one that I've noticed in the coaching process and the concern is that technician goes out for a repair job and a urgency call and uh the bottom three options are repair and the top three options are replacement right but we should still be focusing on giving the customer 6 repair options and then after so after doing that then get them to convince us that they actually want to see replacement options right we don't want to be mixing the two options it gets way too confusing you're going to end up getting a lot of conversations about hey just just go ahead and e-mail those over to me Joe right that's where a technician unfortunately can drop the ball and even salespeople by not having specific solutions at the right time wouldn't you say that a lot of times the when it comes to this part of the day that they have the separate repair separate replacement options that's gonna take a lot of work Mike what about that part what do you ever see service professionals who they don't want to put that they're working to make all those prices and make all those options and and why do you need six is it 6 gonna be confusing tell me a little bit more about that so with the sixth options again it goes back you know number one not offering premium mid range and economy options we want that customer to see that there's better ways to definitely repair their existing system but we also want to have them you know see that maybe it's not the best way to throw good money after bad and that we should have 6 replacement options built along with that right yes can a technician say gosh that's just so much more work well unfortunately if you feel that that's so much more work then we could always find somebody else that wants to make money at it right we there's all kinds of people out there looking for for work and I know that's where I started six years ago like hey I wanna make more money the six options is a key factor that you know they're always going to pick in the middle and if it's set up properly getting the customer to tell you that they want to see replacement options nobody wants to waste money these days they want to make sure that they made a the the right purchase at the right time and being able to have six and six is is going to give them that opportunity so like you discover all this and the science of pricing which you teach and that power pricing profit X class for service Titan users Mike you probably have gone through a lot of different people I know you've got a lot of in-house and now you're doing public events with this our pricing profit tax program for service Titan users when you do this Mike what are some stories you can tell us about things you've seen you don't gotta mention any company names what kind of things have you seen stars you've seen out there you told me about a client you just saw today could you tell me a little bit about what you saw there just give us that little quick story rundown so people can understand maybe they could tell by the story it might work out a little bit better maybe understand sure talking about what I come across is I do a lot of inspecting right I do a lot of inspecting on the option building on what the team is putting together out there for options for the customer and what I had seen on that particular one was just somebody was really uh not offering you know number one we're offering six options they had a mixture of repair and replace options together and it just you know as a customer I could see where that could be really really confusing some of the other aspects that I've seen where the science of pricing has worked really really well is you know within 45 days somebody going from a $4000 average ticket on the sales side to 12,000 right that's a two point I think it's like 2.6% growth right just in 45 days of understanding the science of pricing proper service agreements and warranties built into the options and then let the customer choose and you told me about the statistics of the company before we came on the air about what happens when you make these blunders you said they had ten maintenance calls tell me about there was yeah unfortunately there are 16 calls that were ran on a particular day and they walked away with one selling one Band-Aid and I I looked at various calls in my inspection process and found it's all across the board of what's being offered to the customers there's no consistency nothing that's able to be able to go back and leverage how the technicians are running the calls or the sales people are running the calls and that's where the problem begins if you can't inspect if you expect or there's no consistent process then it's gonna be an uphill battle I mean like if you look at it like this way the price the prices that we give people it's kind of like the baseball bat and the baseball game that's the that's the implement where we score runs right that's how we use those runs but if you're not swinging the bat right and you're striking out all the time it could be defeating for a team right so how does how does somebody like tell me who sings that bad or somebody who makes those prices how can they get better at this how is the way they can get better at this Michael how would you how would you advise a manager or a salesperson themselves to say I don't the pricing I'm not quite getting it right now how can they how can they improve this mic so the biggest way they can improve it you know how it's being monitored #1 being able to go in and inspect these calls but there has to be somebody may be a dispatch person may it be somebody within the office of field coach field trainer that's able to look at these jobs and recognize immediately when we have you know 6% closing out of 16 calls that there's a gap right if we don't recognize that there's a gap we we really can't fix the gap once they recognize that there's a gap then we have to be able to implement OK what do we have to fix first is that our option building right is it there's too big of a gap right those are some of the differentiating things we do see is having too large of a gap between two options while customer statistically is going to go for the lower number because they don't see value right or or having something that's you know gaps that are only $200 difference like we talked about earlier you know what's the difference here if I can get the same thing for this why wouldn't I just do the the lower one right well Mike unfortunately all good things have to come to an end now before we came on the air you did offer to make an amazing offer to people here on this podcast tell us about the offer that you made about doing a free audit of anybody's pricing if they wanted to contact you directly and say you would inspect their as a professional pricing inspector you would go ahead and make that offer to inspect anybody's price sheet and make them give them some feedback on what they could do to improve it Mike you wanna go ahead and tell us how people can do that yeah absolutely those amazing generous offer on your part Mike and the whole goal Joe is what are we here for right we're we're here to make everybody better I feel like I've been volunteer old so I'll go I'll move forward and and we'll do this see it's easy because I enjoy this right I enjoy coaching I've always have always have if somebody's willing to be open minded to the fact that hey we may have some issues and some gaps and let's let's have Mike take a look at it I would definitely do that you can e-mail me at [e-mail] if you know Joe personally you can get in touch with Joe you can get in touch with me on Facebook all those different areas I am more than happy to help teams do that and kind of figure out where the gaps how can we make your team better how can we grow because that's the ultimate goal right is being able to grow and and have those opportunities to watch your business day in and day out get better well you heard it here everybody Mike at service mvp.com Mike will offer a free audit of your pricing you have a problem most likely it starts with that using that wrong size bat or swinging that bat wrong in baseball and in this case the bat would be the pricing option sheet have to give people Mike I think it's a generous offer Mike thanks for taking your time after a busy day of coaching hundreds of people I appreciate you taking the time of meeting those here I appreciate the opportunity Joe and I appreciate everything you've done for me over the years so anything I can do to give back to everybody we'll see you guys next on the next episode have a great one everybody.