Summary:
In this episode, Ari Greenbaum interviews Craig Cole, owner of The Roof Factory. They discuss how you can find the correct value for your service offerings and how to find leads as a growing business!
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Transcript:
Ari: Welcome to The X Factor, a Home Pros Sales podcast. This is the podcast about all things sales to help home improvement pros generate high-quality leads, and close more deals. I’m your host, Ari Greenbaum, and in this podcast, we’ll talk about different tactics, tips, and resources to help you succeed and grow your business while interviewing experts in the industry.
But before we get into today’s episode, just a few housekeeping items, if you could us some love on Apple Podcasts, that little purple icon, give us that five-star rating, leave us a review, let us know if you’re enjoying the podcast, we love the feedback.
Now today, we’re going to shift gears from what our typical topics have been, which is more interacting with clients, and homeowners and how to secure deals. Today’s guest is Craig Cole, he’s with The Roof Factory right here in our backyard. He’s out of Winder, Georgia, neighbor to us here in Atlanta but the topic we’re gonna focus on is something that Craig himself in sharing with me, has experienced from being a new business not terribly long ago, and some of the transitions that he’s gone through, to really make his business successful, and to learn how to effectively price and value your services. That’s really what we’re gonna be focusing on today. So before even getting into it, Craig, maybe, you know, just introduce yourself, let people know a little about your background, where you’re coming from. We’ll dive right into things from there.
Craig: Okay, well, my name is Craig Cole, I own The Roof Factory. We’ve been in business since 2010. Before that, we used to build houses, but I always tell my customers, you know, we can do anything on a house pretty much, but I don’t want to build your house. So anyway, that’s what we do, roofs, gutters, windows, decks, just pretty much anything on a house. My background is in finance. I worked at a bank for a while and had a mortgage company and now I have a roofing company and gutters and just pretty much anything to do with a house. We do commercial work, we do residential work, and we just love what we do.
Ari: Yeah and I know, it’s not the topic of the discussion but you know, again, that’s a big transition from the banking world into the home improvement home building world, What triggered the transition for you, you know, such a drastic one?
Craig: Well, I was a mortgage broker, and I worked at a bank and a number of different mortgage companies, and then decided to, you know, go out and do my own thing. So I had my own mortgage company for a while and I liked doing that but then when things changed in the mortgage business, you know, I’m just sitting behind a desk all the time, I would have to get up sometimes and go look at people’s properties or go meet with a customer at a house take an application there. I would do that but I think I just got tired of sitting behind the desk all the time. You know, and really enjoy getting out there and talking to different, you know, different people and it’s nothing like working for yourself.
Ari: Yeah, that’s a great reason, especially if you don’t want to be stuck behind the desk home improvement and homebuilding definitely don’t have you behind the desk. That is for sure. So I’ve been on the other side, as I shared with you in the past, and it is definitely got you active out and about and having some fun. Cool. So yeah, I know, we want to talk about, you know, some of the transition and the backgrounds of what you when you started your business and what that was, and where that has led to.
So maybe can help enlighten people, I know the story from you personally but you know, when you first started your business back in 2010, you know, what was the mindset for you going into a business that was a brand new thing, and a lot of our listeners are new business owners just getting started the first couple of years, the tough years.
So what were you going through? And what was the mindset you had back then?
Craig: Well, the mindset I guess I had was to get some business, we would knock on doors a lot of times. You know, one of the things about the roofing business is you know, I can look at your house and tell you if you need a roof or not. If I was in the appliance business, I mean, not just from looking at your house, I wouldn’t be able to tell you if you needed a refrigerator or not, you know. So we would do that we knock on doors, but then it got to be where word of mouth business was really our bread and butter. So we don’t knock on doors anymore.
You know, we do a lot of roofs. We do a lot of gutters and we probably do more gutters now than anything else but back then, it was just, you know, do what we had to do to find the business. You know, we just talk to anybody and everybody and you know, most people need something done on their home, whether it’s gutters or Faceboards, you know, a new roof, windows, whatever, they pretty much need something done on it and once you start talking to people, you know, and they’ll say, Well, you know what, I may need a roof and I said, Well, I’d come out and take a peek at it for you. We go out there and look at the roof and, you know, sometimes they need one, sometimes they don’t need one. So, you know, it just depends but, but that’s sort of how we did it, we just didn’t give up.
Ari: And you had plenty of business coming in if I understand correctly. I mean, you were signing deals, getting clients, building your business, but you shared some other things as well, that it wasn’t always, as a perfect world, or an ideal world as you were hoping, what were the challenges with that, that you found?
Craig: I think probably the biggest challenges were when you go to a customer’s house, and you see that half the roof is laying in the front yard, and they just for some reason, may not want to talk to you or just don’t want to be bothered, I think a lot of people just don’t want to be bothered, you know, years ago, you know, if your doorbell rang, you were excited. I remember as a kid, if my doorbell rang, you know, Mom would invite the people in time.
Nowadays, it’s not like that nowadays, the doorbell rings, you know, and everybody inside runs and hides. So, you know, it’s changed a whole lot but I remember this one customer, we had walked up to the house, and you could see that he had a hole in his roof. I told him, and he came to the door, and it was in the afternoon and I was talking to him about it. I said, you know, you got a hole in your roof, you know, we are here now. We don’t use what a lot of people say, you know, hey, we’re here in the neighborhood, we’re doing the roof down the street or, you know, and, you know, but we were in the neighborhood and I told him, I said, you know, we can fix that thing right now for you and I forget what I would have charged him, but, but it was a great price and he said, Well, I probably need to check with my wife. I said I think I said something to him like, well, you know, if you let us fix it right now, and we get a fix and your wife comes home, and she sees that it’s been fixed, she’s gonna be a lot happier than, you know, if you check with her to see if it needs to be fixed because I can guarantee it, she’s going to say it needs to be fixed. If she’s anything like my wife. So anyway, just, you know, things like that just sometimes just customers are hard to deal with, you just can’t give up on them. You know, I mean, the guy needed, he had a hole in his roof, he needed it fixed.
Ari: You were doing all that and gaining customers but I know you share with me also, you know when it comes to the value that you felt you deserve. I mean, for what I bring to people, that’s, you know, there’s the urge to allow pricing to be dictated by your seniority in the business, so to speak, or I don’t want to call desperation, but the need to build the business so how did the factor into the business? A big thing for you.
Craig: Right? So early on. You know, you’re like that guy, I can’t remember what I was going to charge him for is, you know, for the repair, but you’ll do things I mean, you want to get business, okay, so you’re not really sure how to price your price the business. So I think you need to know what your numbers are, if you don’t know the numbers, you’re going to be making all kinds of mistakes. So you need to know the numbers but to price it right, and to price it where you’re gonna make money, and not just keep your guys busy. It is how I do it.
Ari: But that’s how you’re doing it currently, I mean, back when you were getting started. I mean, if I remember correctly from our initial conversations, that that was really what you noticed when you’re analyzing the business after about a year or so of doing things is that I’m doing all this work, but I’m not really that profitable.
Craig: Right, right.
Ari: I’m not making a really good living, I’m keeping other people busy, my crews, et cetera. So when did that epiphany happen? And, you know, what was the thought process to shift that but that’s, that’s really the juicy stuff for a lot of the folks that are listening here understand the business, but we also got to value ourselves.
Craig: Right, right. It happened early on. Because if you do a job and in you make $100 on a job that day, you know, you might want to go to work at McDonald’s and
make more than that, and you get to eat too, you know, so. So I just caught it just early and what I mean by that is that you know, the work that we do, okay? It’s valuable work. There are a lot of people out there who don’t do good work, okay? If you do good work, and you and you’re straight with the customers, and you let them know, I mean, you know, because you’ve got to know your numbers, again, you got, you got insurance you got, you got, you know, your materials, dumpsters, you got, you know, your labor costs, your advertising, your office expenses, you know, just all those kinds of things, those have to be in those numbers and if you’re, if you’re early on, just just, you know, you may cut it short, just to get, you know, some business right away but you’ll learn quickly, that, you know, this, and you’ll get a lot of, you’ll get some nose, but like, if you’re knocking on a door, say, and you’re a really good sales guy, okay, out of 10 doors that you knock on, you’re gonna get probably five or six of them, maybe seven of them, you know, if you’re really bad, okay, you’re gonna get one. So if you know, you’re gonna get one out of 10, and you want to get three jobs that day, and you’re in this large subdivision, you got to knock on the doors. Yeah, but don’t be discouraged.
You know, when somebody says, like, the guy with a hole in his roof, says, Let me check with my wife, you know, so you just get the smile, be nice, don’t you know, I mean, be nice with him, don’t be ugly with the guy and then you know, and leave your cards and information about it and then chances are, he’s got to get it fixed. So it’s going to be there you fixing it, or somebody else. So if you leave his house with a friendly smile, you’re more likely that he’s going to call you back.
Ari: So you made that shift pretty early on from what you said, you know, as far as understanding, wait a minute, I gotta value what I’m doing a little more than I am my numbers, as he called it, and then price things differently. So let me ask you, based on the comparison of the early jobs you were doing, and the percentage of jobs you were winning, you know, we don’t estimate everything and win them all. I wish we all did. Compared to when you change your pricing, and we’re and if I remember correctly, you didn’t go to a top end, you went to you know, a comfortable middle place. Did you feel there was any change or difference in the volume of business you were closing? And if so, I mean, to what degree?
Craig: So let’s say that you’re closing 10 deals, and you’re making $100 a deal? That’s $1,000 but if I go to Bob’s house, and I price it right, and I do his job, and I make $1,000 on his house. Do I really want 10 jobs at $100 each or one job at $1,000?
Ari: So the volume maybe went down a little bit, but as far as like, you know, work hard and work smart kind of statements. Yeah, that sounds like working smarter, as opposed to just running and gunning, trying to get as many jobs done to make that small profit, as we’re adding to a bigger one. So that was part of it, you closed fewer jobs and you felt that was because of the price. There are obviously people out there that are always gonna go with, Hey, let me get the cheapest option.
Craig: Sure, absolutely and that’s wonderful. They want to do that but that’s not the kind of customer I’m looking for.
Ari: So that’s the key. So that sounds like a critical piece, you got to know the customer you’re looking for as well as know your numbers, and then make sure that those things stay parallel from what I’m understanding and then that’s when you start working smart versus hard and it’s not. Well, what’s my closing percentage, but no, what’s my profitability?
Craig: Right? Right. Exactly.
Ari: Do you find that it is harder to close business at a higher price mean, again, everyone likes a cheaper price? I’ve never met anyone that ever buys anything that wouldn’t rather pay less but, you know, when it comes to being at that middle-of-the-road price not being the top end? Do you feel that that has benefited you because I’ve heard from many people, you never want to be at the bottom. You never want to be at the top you want to be somewhere in the middle with pricing. So did you feel that that was the case with you that you had a lot more attention from the better buyers, you know, the people that really parallel what you were looking for?
Craig: Yes, and not only were they better buyers, but they were better at helping me find other customers. Yeah, the $100 guy, you know he’s glad he’s got his roof fixed but do I want him to send me five other $100? I’d rather have the $1,000 guy sending me five to $6,000 types of business.
Ari: Yeah, no, that makes sense and so that’s something I’d even calculate in there but the referral basis and again, like will refer like, you know, the most logical theory. What I’m saying is that is the case that you notice that the people that are we’re being referred to, he said word of mouth was big. Previously, it took a shift to a much better caliber of clients, when you started yourself, when I call, like, fair or at the right value for what you’re offering.
Craig: Plus, just the people who are, I don’t know, this is gonna sound bad, the $1,000 guy say, okay, he’s more likely going to pay you quickly. You know, with $100 a guy maybe, you know, might take a little while. That’s just the kind of customer I just prefer.
Ari: Yeah, that’s your experience what it showed you that? Hey, I don’t think you’re saying anything funny. It sounds like it makes sense.
Craig: I don’t want every job. You know, I definitely don’t want every job. I want all the good jobs.
Ari: So that that was a big part of the shift there is recognizing you don’t need to win them all. No, there’s no, there’s no rule saying I got to even close to 90%, right? It’s a matter of finding the right jobs, and the right customers, and not being afraid to maybe turn some people off because your price might not be aligned with what they’re looking for as a bottom basement price. At the same time that is automatically weeding out and filtering. So at the end of the funnel, you’re left with, yeah, do you want to work for.
Craig: I had an example I was, oh my gosh, years ago, I was in my 20s and I remember I bought this car, and I paid I think was like $1,500 for this car and I was gonna just flipped the car. I remember putting on the windshield in shoe polish in front of my friend’s shop, which was on a busy road, $2,000. You know, so I was gonna make $500 on this car. Nobody was stopping to look at the car. Nobody. I told my friend I said I don’t understand, you know, we’re on a busy road here. You know, there are hundreds of cars going by maybe 1000s and nobody stopped. He goes, you know why? I said no, why? He says You have it priced too, too low. Change the price to $5,000. I said nobody’s gonna pay $5,000 for that car. He goes, ‘change the price to $5,000.’ So I did and guess what, within five minutes, somebody stopped to look at it. It sold oh, it sold for a lot more than about five it sold for, like 3500 or something.
Ari: So it was just another really interesting point. I mean, based on what you shared is like this story. I mean, if you’re pricing things a little more aggressively, let’s call it you know, a little towards the mid to higher range. It allows you a little wiggle room as well. I mean, that’s part of your business skill negotiating and allows you to, if you need to make some adjustments, make someone feel that they’re getting a great deal, right, but you are still getting the ideal customer and the margins you want. Right? Right.
Craig: I’ll do that sometimes I will, I’ll price a job that if you price it to where it’s fair, and you’re making whatever the profit amount that you need to make, say, but it’s fair to you, and you don’t have any room to go down. Okay, maybe you should price it a little bit higher, you know, and then offer them a discount on it or something, you know, some kind of I know that if I buy something, I really like it, if somebody says, you know what I’m gonna I’m gonna take off an extra $100 on this for whatever.
Ari: Builds that trust and builds that solidifies the deal to a degree, right, so that’s fantastic, right there alone, I mean, you again, just the increase in pricing and value at a certain level allows you the flexibility to so it’s not just getting you the right kind of customer, but hey, if you did want to do the job and you have the wiggle room, so to speak, to play around and still win jobs and still be well above the small margin you’re doing, you know, in the beginning when it was a let me just price these to win, you know, and that’s all that mattered. So it’s not just if I’m really understanding all this, you know, I’m putting a bow on it. There are a couple of key factors here.
Number one is to value yourself. I mean, that’s a critical piece. I mean, you’re out there working, get you to want to get paid for the work you’re doing providing you do quality work and you know, craftsmanship and great customer care, which everyone should do anyways. Again, that’s a critical piece. The other piece is knowing your number. So educate yourself, really do some competitive analysis, understand the price and what’s out there and know what people are getting quoted, and stay on top of your market so you could always be relevant. Then know your customer. That’s a lot of knowledge is what it sounds like to educate yourself, not just reading and clicking on things on Google, but really analyzing and understanding who your customer is. When you have those things, all aligned value itself, know the numbers and you have that customer. That’s where it sounds like you have the winning formula and what you built your business on just after getting started in 2010 through now. I mean, you’re talking 11/12 years later, almost 13. Clearly, the formulas work quite well for you, if I can say so.
Craig: It’s been a great formula.
Ari: Awesome. That’s what it’s about. That’s the whole idea of what we’re doing here in this podcast is giving people like, you know, the reality, you know, and dealing with guys like yourself that have been out there doing this, you know, busting their rear ends out there doing it and doing it through trial and error and figuring it out. So we can share that with others and help them to succeed as well and not experience the same pitfalls, or hopefully not, even for a few moments longer than it needs to be, or understand these things and grow their business. So I really appreciate you sharing all these things and, you know, enlightening people that what it is for you that made the difference. Again, it’s a similar story that I’ve heard from other folks as well, you know, that went through similar transitions and it all comes down to that knowledge base. That’s what you’re sharing and that’s really, to me, the critical component is to have those three pieces of knowledge and you’re set up for success.
So I really do appreciate you hopping on here and, you know, sharing all those things with everyone and telling the stories about your background and what led you to, you know, those realizations and obviously, the success you’re having. So, you know, besides thanking you obviously, I want to thank our listeners for listening to the X Factor Home Pros sales podcast. I do hope it brings you value and like I said, helps you take your sales game and your businesses to the next level. Be sure to subscribe so you can catch that next episode. So your action items as a listener are or wherever you are listening to this right now hit the subscribe button so that way you can catch the next episode. You can also follow us on any other social platforms Instagram, and LinkedIn. Again find us @conXpros. Again if you didn’t catch that you could check out our description for our social media links here. If you have any questions shoot us an email happy to help you out at learnmore@conxpros.com Again, thanks for tuning in, and happy hunting.