Question: How do I maximize revenue without hiring more people?
Weldon Long; New York Times Best Selling Author:
I love this question because it’s one of my favorite strategies. There are two ways to grow a business: you can acquire new customers and sell things to them or you can sell more things to your existing customers. Selling more accessories provides more solutions to your homeowners and results in a higher average ticket. When you acquire new customers, you have to get more trucks, you need more admin staff, you need more of everything.
For example, I’m working with a client right now in California. About a year ago, the revenue per lead was $4,000. The commitment that I made to the owner was that I’d increase revenue per lead to $6,000 in six months. We were able to do that through a very simple process – we raised prices about 15% and we increase their close rate from 30% to nearly 45%. So, in my opinion, you maximize revenue by improving sales performance on your existing calls.
People sometimes freak out when they hear “price increase” but works it’s actually a very effective way to increase revenue without increasing overhead and without hiring new people. Even without raising prices, you can train your salespeople to solve more problems when they go in the house. If I go in and replace the air conditioner and the furnace, then I get X amount of dollars. But what if I opened up the entire top of the house and put in a radiant barrier, new attic insulation, new duct work or a zoning system?
I’m working with another client to produce a marketing video called “What’s in Your Attic?” It shows this family in a very clean house playing a board game. The camera pans up into the attic and all of a sudden you see rat feces, dust, dirt. You then see it get sucked into the ducts and dumped back onto the family. What we’re doing is opening up an entirely new level of the house that not too many companies are looking at.
So, my advice is to look for different areas of the house that may have a problem and provide a solution. We all know that the ductless mini split is one of the fastest – if not the fastest – growing segments in the industry. Go through your last 500 installs and call those customers. Unless the duct work was designed perfectly, I guarantee they still have hot and cold spots in their homes. When you talk to them, tell them you have a new technology called a ductless mini split for custom, individualized heating and cooling that can help the hot or cold rooms in their home.
You have to mine your own existing customers, raise your prices if it’s possible, and train your people to sell more stuff. All of that can be done without increasing one dime of overhead or hiring one new person. I find it’s better to grow your business by selling more solutions to your existing customers. Then you have more money to do more marketing, hire more people, and grow that way too.