These are my original notes for my talk at The Johnny Cash Museum in Nashville, TN with Lowe’s ProServices in partnership with GAF Roofing back in 2015. A special thank you to Alyssa Hall and her outstanding team for putting together this memorable event. Image Credit: The Johnny Cash Museum.
The year was 1954.
A young staff sergeant by the name of John R Cash had just been honorably discharged from the US Air Force. For the past 3 years, he had been exchanging passionate love letters, sometimes daily, with Vivian – the young lady he met back in San Antonio while stationed at the base. He asked her to couples skate with him at the roller rink one evening before being deployed.
John and Vivian were married and moved to Memphis where John had high hopes of breaking into the music business. To pay the bills, he worked as a door-to-door salesman with a local appliance company. Although, by his own admission, he wasn’t much of a salesman because he spent too much time in his car listening to his radio, and not enough time out knocking doors.
John’s life was about to change drastically…
Fast forward almost 40 years later to 1995, the year I broke into the roofing business as a door-to-door salesman. The biggest hail storm in US history had just slammed through Fort Worth, Texas. They said, “You can make $100K a year, easy, in roofing.” I believed them. So, I quit my full-time job and went to work at the roofing company.
With very little training, they handed me a box of business cards, a stack of blank contracts, and told me to get out there and start knocking doors. I was so scared; I couldn’t even get out of my car at first. I just drove around all day in my old Chrysler 5th Avenue like my doors were welded shut. I would have to work up the courage to get out and start knocking.
As the story goes, John finally worked up the courage to visit the Sun Records studio and audition for Sam Phillips. He sang mostly gospel music songs. Obviously, Sam wasn’t buying what John was selling because he supposedly told him to “go home and sin, then come back with a song I can sell.” Funny how that works – people only buy what they find valuable.
John went to work on new material and sold Sam Phillips his brand new songs, “Hey, Porter,” and “Cry, Cry, Cry.” They were recorded in 1955 when he signed with Sun Records and took “Johnny Cash” as his stage name.
JOHNNY WAS COUNTRY
Johnny was country…he was rock & roll, too, but he was also rockabilly, blues, folk, and gospel. He’s one of the rare artists inducted into the Country Music Hall of Fame, Rock & Roll Hall of Fame, and the Gospel Music Hall of Fame.
His personal struggles aren’t a secret. He was deep, reflective, and at times severely troubled. Johnny was a Saint and a sinner, saved by grace through faith. Later in life, Johnny & June Carter would often do the special music for Billy Graham’s evangelistic crusades. He was a friend to Presidents and celebrities as well the oppressed, downtrodden, and especially the American soldier.
DIFFERENT & UNIQUE
Johnny was different and unique. When you hear the distinctive “boom-chicka-boom” of Johnny’s music, you’re instantly mesmerized…
“I fell in to a burning ring of fire…
I went down, down, down and the flames went higher.”
SAFE & SAME
Johnny refused to play it safe. He wouldn’t allow himself to be labeled the same as everybody else. It’s a good thing, too, because they don’t build museums for the folks who play it safe…the same as everybody else.
When I finally worked up the courage to get out of my car and start knocking, I didn’t have much luck at first.
“KNOCK. KNOCK. KNOCK. Hi! I’m Mike Coday. Would you like to buy a roof?” “NO!” “Okay, Bye.”
I used this same line for several days without having any success…
“Would you like a free estimate?” “NO!” “Okay, Bye.”
And then it happened…I remember seeing the old guy across the street trimming his bushes. I walked over to give him my sales pitch, “Hi! I’m Mike Coday. Would you like a free estimate to replace your hail damaged roof?”
He slowly turned to face me, wiped the sweat from his brow, and replied, “Well, that depends, young man. Do you install Timberline shingles?”
Now, I had no idea what a Timberline shingle was, but I knew we were making progress. I put on my best poker face and sheepishly replied, “Yes, yes. Of course we do.” He answered, “Okay, I’ll take a free estimate then.”
Unfortunately, I didn’t sell him, but it wasn’t too long until I made my first sale: A little white, 20 year 3-tab, to a farmer wearing blue jean overalls.
My confidence shot up and my sales started racking up. By the end of the summer, I had sold more roofs than any of the other 50 salespeople at my roofing company.
TWICE AS MUCH
Sadly, I sold twice as many roofs as Paul, the next closest salesperson, but only made 1/3 as much money as he did.
At the end of my work day, I would come back to the office drenched in sweat, dead tired from giving away free estimates all day in the Texas heat – we actually measured the roofs by hand in those days. On the other hand, Paul would come back to the office looking clean and fresh – like he just walked out of a deodorant commercial.
I sold a lot of roofs my first year in roofing, but I sold them way too cheap.
I was competing on price because I was afraid I wouldn’t get the job if I charged more.
Sales experts tell us there are only 3 ways to increase your revenue.
#1 SELL MORE CUSTOMERS
That was my motto: “Sell More Customers.” What I lacked in profitability, I made up for in volume.
New client acquisition is expensive. You may not have a sales force willing to walk the streets of your city knocking doors for a split of the profit. The Yellow Pages don’t work like they used to; neither does an ad in the local newspaper. Everything works a little, but nothing seems to work a lot.
Actually, Google is the new Yellow Pages. Online advertising is good if you know what you’re doing. Even if you don’t, you can buy shared roofing leads from places like HomeAdvisor for $75 each and then duke it out with 4-5 of your closest competitors for the sale.
If you need more customers, a better solution might be to invest in a private roofing leads program. You’ll pay $150 – $200 on average to generate an exclusive roofing lead…not too bad if you’re a good closer.
#2 SELL MORE TO YOUR CUSTOMERS
I’ll come back to this one in a minute because I believe it is the best way to increase your revenue.
#3 SELL YOUR CUSTOMERS MORE OFTEN
We don’t control Mother Nature. We can’t make it hail or storm. It’s difficult to sell more roofing to a customer who already has a new roof. We may be able to sell other products like insulation, replacement windows, or service contracts, but once they’ve bought a new roof, it usually takes some time before they’ll buy another one from you.
JUST TO RECAP…
#1 Sell More Customers
#2 Sell More To Your Customers
#3 Sell Your Customers More Often
Tonight, I want to focus on #2, “Sell More To Your Customers.”
Specifically, we’re going to discover how to sell more to your customers by increasing your overall profit on every new deal.
Obviously, we’ll either increase profitability by selling additional items (e.g. Ice & Water, Z-Ridge, Upgrades, etc.) or we’ll sell what they’re already buying for a higher profit margin by raising our price.
I CAN’T INCREASE
“Mike, I can’t increase my prices. My customers are all on a budget. It’s impossible for me to sell them more. You don’t understand my business. I have to compete on price because if I charge more, I might not get the business at all, and I can’t afford to lose business.”
Here’s the problem with that kind of thinking:
Winter is coming!
Every if you could sell more customers this winter by lowering your prices, do you want to spend the rest of your life making less and less for doing more and more work? Every time you do another job, you increase your liability. Haven’t you noticed, cheap jobs are always more trouble than the extremely profitable jobs? You have less time to spend with your family because you’re always worried about losing your business. You give work away just to keep your people busy.
You catch yourself being jealous of how much everybody else is making off your business. It feels like you’re handing out big stacks of money to everybody else – your labor, insurance, lease space, and materials – but you only get to keep a little stack of money for yourself.
You’re the one working yourself to death. It’s not right, is it?
Imagine what it would feel like if you actually could sell more to your customers by increasing your overall profit on every new deal. Imagine selling more profitable upgrades or selling at greater profit margins…or both! Imagine selling more and making more, too.
You could hire extra office help, pay off old bills, take a longer vacation, or spend more time with your family without feeling the weight of the world on your shoulders. That’s a great feeling, isn’t it?
PRICE IS NOT YOUR PROBLEM
Price Is NOT Your Problem.
Your Prices Are NOT Too High.
Your Value Is Too Low.
Obviously, the problem with competing on price is somebody is always willing to sell the same thing you’re selling for $1 cheaper.
Actually, our prospects can usually find someone willing to sell them the same thing for $100 less – sometimes even $1,000 less or $10,0000 less.
If a prospect called you right now and said, “I just got a quote on my project for $10,000. If you can do the deal for $100 less, the job’s all yours,” would you want the job? Sounds like easy money to me.
All you’ve got to be is $100 cheaper, and the work is yours. Of course, you’d want to double check the material and measurements, but if everything checked out, you’d take that deal every day of the week, and twice on Sundays, right?
PRICE IS DECEPTIVE
We get into trouble on our pricing when we falsely believe the price is the deciding factor in the sale.
Salespeople, especially good salespeople, understand their labor, material, and overhead costs down to the dime. They get lost focusing on what a job costs. By the time they get around to giving the prospect a price, they already know how much money they’ll make on the deal. They’re already spending the profit in their mind long before they get the signature.
We lose sight of what our prospect is buying. All too often, we’re focused on the price, but price is not what our prospect is buying.
Price is an illusion; it’s a mirage. Price is what we see, but it’s not what our prospect sees.
WHAT THEY WANT TO SEE
Your prospect notices your price. They make a mental note, but they aren’t focused on it.
Your price is just a starting point, an anchor, for your prospect to measure your value against.
What your prospect sees is everything they believe is valuable about you and your service. They see what your competition isn’t. They look for your differences because that’s how they determine your value and justify paying your price.
If there’s not enough value to justify your price, there’s not enough value for your prospect to buy from you.
If you’ve seen the classic movie, Jurassic Park, you’ll remember the two kids in the overturned jeep. They would have been okay if they had just stayed still. The T-Rex is blind in this regard: they can’t see anything unless there’s movement. They need points of contrast, differences, to activate their vision.
Your prospects are like these ancient dinosaurs. Actually, we all are, especially salespeople. Until we see something, anything, that looks, sounds, smells, tastes, or feels different that the competition, we’re in the dark, blind, and we’ll refuse to make a decision.
If it doesn’t move, if it’s not different and unique, we can’t assign a value to it or determine if it’s even worth pursuing.
If it doesn’t move, if everything looks the same, the only choice we have is to pay as little as possible for whatever we’re buying.
If you give a prospect a price that’s higher than the value of your differences, they get confused. We all know the first rule of selling is to keep it simple because a confused mind never buys.
SELLING THE SAME THING
If there’s always somebody out there willing to sell the same thing for $100 less, what should your primary objective be in every sales presentation?
Wouldn’t it make sense to make sure you’re never selling the same thing?
I cringe when a salesperson or contractor tells me how super great they are because they’re BBB Accredited, Licensed, Insured, Bonded, and Certified. These are all good things, but they’re only the starting point in a sale. They’re not valuable points of difference.
Prospects already assume you’ve got the basics covered. Aren’t all reputable contractors already BBB Accredited and Insured? The basics aren’t strong enough to make a sale on their own, much less make a sale with higher profit margins.
They’re not enough because they aren’t significantly different from what your competition is already doing. This is especially true when you’re selling high-end metal, synthetic, slate, tile, or commercial work. Even if you’re only selling 3-Tabs, you’ll need more than the basics to make more money on every sale. You’ve got to focus on your differences.
The basics just get you in the game. At best, they open some doors. They’re the price of admission for you to compete, but they’re no guarantee of success, much less of increased profitability.
If you honestly believe the basics are enough, the next time a prospect casually asks for reassurance that you’re insured or certified, simply reply, “Yes, we are. Here’s my price. Sign here please…”
SELLING YOUR DIFFERENCES
[Story: Knowing Where To Tap]
Knowing how to tap is almost worthless.
Knowing where to tap is priceless.
Fundamentally, a prospect understands they need the old roof off, they want a good-looking new roof hammered back on, and the whole mess cleaned up at the end of the day.
Sure, they know it’s a lot of work, but there’s plenty of people willing to work hard. They work hard for a living. Why shouldn’t you? It’s all nails and shingles to them. There’s not a lot of difference between one company and another. As far as they’re concerned, fixing the roof isn’t much more than knowing how to tap your hammer.
POINTS OF DIFFERENCES
A roofing company or contractor, actually any business, makes more money when they identify their points of differences – differences their prospects value and will pay more to acquire.
When you know where to tap, how to give your prospect value that’s different and unique, their ancient instincts will kick in and notice the movement. You’ll make more money and increase your profits on every new deal.
If you don’t look different, you aren’t different, and if you aren’t different, your prospect only has one choice about how to measure your value…and it all comes down to the cheapest price.
You say you’re different, but if your prospect believes everything about you and your competition should be valued the same, the lowest price usually wins. There are exceptions.
4 WAYS TO DIFFERENTIATE YOURSELF
There are 4 ways you can differentiate yourself, starting tonight, to sell more to your customers for greater profits.
You could either be cheaper than everybody else or increase your prices and be more expensive.
If you continue to compete on price, you’ll get more business, but you’ll make less and less doing more and more work.
On the other hand, you could start charging more for the work you’re already doing. Raise your prices. Most people will automatically assume you’re worth more if you charge more.
Price is a shortcut we use to determine a service or product’s value in the absence of important information. If a prospect is in a hurry, or they’re unable, or unwilling, to sit down for multiple sales presentations, a higher price is usually enough to signal they’re getting a better value.
A small percentage of the population, maybe 5% – 10%, almost always defers to the higher price as a sign of value. They take the phrase, “You get what you pay for,” to an extreme.
Maybe a parent hammered it into their head as a child or they get burned on a major purchase when they picked the cheaper option.
With this type of prospect, the higher-priced service is almost always granted an increased level of value and worth without question. It’s automatic. If the price is higher, the service must be better.
Prospects who want to project an image of always buying the best, having the best, or wanting to be seen as being the best are especially susceptible to interpreting a high price as a sign of good value.
I won’t go into the deep psychology of why a higher price is such a strong buying motivation for them, but it’s fair to assume they believe their own value, as a human being, is based on the price they can afford to pay. The more they pay, the more valuable they become.
They pay more because their self-esteem is wrapped around what they can afford to pay. If you show them value, and a high price, you’ll have a good chance of getting their business.
However, if you show this prospect value, without the high price, you run the risk of confusing them, and a confused mind never buys.
HIGH PRICE BUYERS
How do you recognize a high price buyer – the 5% to 10% of society that uses price as a substitute for value?
Look for patterns where they’ve purchased the high-priced option before.
For example, you pull up in their driveway, and it’s stamped concrete, when all their neighbors have gravel drives, you might have a high price buyer.
If they make a special point of telling you how they have “real wood floors,” not laminate, you might have a high price buyer. When they point out all the places they go, experiences they’ve had that are “better” than everybody else, you might have a high price buyer.
It’s your job to charge more or risk losing the deal. If your prospect wants a high price, and unusual value, give it to them.
The second way you can differentiate yourself to make higher profits is to identify your emotional connecting rods.
You want to have points of emotional contact where your prospects can feel what’s different about you and make a valuable connection.
Fight the urge to be safe. Take a stand. Make a point. Be transparent – Saint or Sinner. Like Johnny Cash, your prospects want to feel you – warts and all. Remember, they don’t build museums for folks who play it safe, the same as everybody else.
Fireman Roofing – People love firefighters.
Father & Son – Family businesses evoke warm feelings.
Your Personal Story – Everybody has a story. What’s your story?
Your Prospect’s Story – If you can’t think of anything that would be valuable to share about yourself, listen to what’s valuable to your prospect. Your prospect may not be the most interesting person in the world, but they are the person they’re most interested in. Make an emotional connection with your prospect through their life story.
The third way you can increase your profits on every sale is to involve your prospects physically in your presentation.
Let them see and feel your products. Pull out a strip of Ice & Water. Let them feel the spongy, sticky, padded protection. Compare ridge vents, starter strips, or anything else you want them to pay more money to get installed.
By touching your products, your prospect develops a physical bond that creates value – value that justifies a higher price.
If you install the same roof as your competition, but your competition isn’t explaining the process fully, you can create value by physically showing your prospect what you’ll do, even if it’s exactly the same work.
The fourth way you’ll increase your value and make higher profits is by giving your prospects a logical reason to buy from you.
It’s true; we buy emotionally, but we justify logically. After you’ve given your prospect the financial, emotional, and physical differences, it’s time to back up your value with logic. Logic is the last hurdle you cross before closing the deal for more money.
“Mr. Jones, I think we both agree that upgrading to a Class 4 roofing system will not only look great on your home, but you’ll also save money every year on your homeowner’s insurance premiums.”
“Before voting on this proposal, I would like to ask if there are any more questions. I want the board of directors to know we’re not just a good, local company you can trust, we’re also serious about being your business partner for many years to come.”
Give your prospect the logic they need to justify the purchase.
MAKE A LIST
The most profitable investment you can make is discovering your most valuable points of difference.
What are you that nobody else can be?
Your prospect is not buying your price; they’re buying what they get for your price. They want to buy value. Value is created by your differences.
If they don’t buy from you, but bought from somebody else, your price wasn’t too high, you just weren’t valuable enough for them.
You have to force yourself to be different.
Be different and unique. Stand out and be yourself so you can make those financial, emotional, physical, and logical connections that lead to higher profits on every job you sell.
The natural tendency is to conform to what everybody else in the roofing business is doing, to play it safe and be the same, but that only makes you invisible to your prospects…and they don’t build museums to the folks who play it safe. Have the courage to be different, like our friend Johnny Cash.