GET PAID For Price Increases & Material Shortages With Mike Braun

Hey, everybody, welcome. I'm joined today with Mike Braun of Elite Claim Solutions to talk about the hottest topic right now in the world of roofing. Material shortages, price increases, profits getting eaten, commissions getting destroyed and what you can do about it. So, Mike, thanks for joining me again.

Yeah, of course, man. Thanks for having me. Appreciate it.

For anyone that doesn't know Mike yet, Mike is a former client and friend of mine who owned a really successful roofing company and since exited started Elite Claim Solutions, he's growing so fast that within just a few months is on to office space number two.

Yeah.

And they are doing just an amazing job. Anyone that reaches out to me for supplement help, I refer to Mike. No, I do not get paid. I do not get kickbacks. I share this because Mike and his team do awesome work and they think like contractors. So I reached out to Mike because I got on the phone with a few contractors and in this last week, everyone saying I'm driving all over for material prices are through the roof redeck. I can't even get lumber for Redex. So Mike is here to share with us some gems on what you can do, how to supplement and how to navigate this. And he just hopped off the phone. We had to pause the recording because he got on the phone with a major supplier to get some inside details to share with us today. So, Mike, I'm going to shut up. I'm going to hand this over to you. You run this thing and I'll ask some questions as they come up.

You got it. Well, first things, Adam, greatly appreciate it. Always love being on your channel and chatting with you whether whether recorded or not. Always get some good insight out of this stuff. So thanks so much. Yeah, so just got off the phone as Adam mentioned, with one of the major suppliers in the country that I know, just trying to get some details on kind of what's going on out there. So I thought I'd share a few things with you on kind of the state of materials in the industry. So let's give a little context. Shingles are one thing, I think kind of where things stand from. What I've just learned is that if you're in a market where kind of things are going as they were last year from a volume standpoint, you didn't have a big storm this year that you didn't have last year. You're not in a three, three hurricane market or whatever, that materials should be relatively stable, longer lead times, but you can get material in those, in those markets so long as they're not off Color items, if you need green or, you know, something off color, that's going to take a lot longer, 17 weeks in some cases was, was just discussed. So yeah, some of those things can take a long time.

So.

That'S kind of the shingle world right now. If you're in an area with major event, whether it be hurricane, hailstorm, windstorm, whatever, the shortages are real. Obviously you guys are facing that on the ground. That's not kind of made up stuff. It's real. And here's some of the reasons why. So he explained, for example, in a plant where you used to have 10 people on an assembly line and they're each doing their own kind of job, whatever it be, specifically for anything that's injection molded. So any accessories. Ridgevin, for example, is an injection molded product that used to be, you know, 10 people on a line next to each other, shoulder to shoulder, doing different pieces of the puzzle. Well, I have three people on that line spaced out, you know, 6 to 12ft apart all over. And that just means you can't produce as much of it. And that's. That. That's kind of the nature of the beast. So one way to think about how do I get around these things? As a contractor, one is make sure that you're talking to whoever your distributors are about what color availability they have and then direct your clients to that. Be honest and forthright with your clients. Listen, hey, if you're not in a hurry to get done, you know, if you're not in Lake Charles, where, where half your roof's blown off, or your entire roof is blown off and you have some leeway in time, then, okay, choose whatever call you want. It's going to be four months before the material gets hit. But if you're in a market where, hey, I need to get this done quickly, or if you're a contractor and just for your own sales and commissions and cash flow perspective, you need to get it done quickly. You need to be communicating with your local vendors to find out what material is available, what colors are available on a regular basis. And those are the ones that were mentioned are the standards. You know, your, your weatherwoods, your charcoal or blacks and then, you know, some brown of, of some kind. Those are kind of your three choices. Those products are pretty available. Again, maybe a little bit longer lead time, but, but not 17 weeks. Maybe, you know, a few weeks. A few weeks extra. Sorry, I'm looking down because I wrote some notes down since this was kind of on the fly here real quick.

Sure.

As far as you know, pricing increases go. And hey, you know, what's going to happen with pricing increases? You know, Adam and listeners of Adam's channel and podcast. God bless capitalism, right? And supply and demand, because that's where we are right now. This is a supply and demand problem. And unfortunately, there's way more demand than there is supply, which means prices are going to go up and they're going to continue to go up. That's not something that I think anybody foresees kind of slowing down in the, in the near term, at least. So, you know, you can expect your typical January increase, but it might be bigger than last year's January increase. That's not going to go away. Let's see. I'm going to check and see if I have anything else major here. They do think that things are going to kind of level off from a, from a distribution standpoint and kind of getting material sometime in Q1 of next year. So, you know, the backlogs of ordering should kind of start to level off around then. But that's kind of dependent on no more major events. And we've all been around when there's that November, you know, storm that comes through and things change. So if there's another huge event then, or multiple events around the country in the storm belt, you know, I think that that all goes out the window. The last thing is not roofing related, but siding related. And I know a lot of roofers kind of end up doing siding just because of the nature of how it goes. Siding is way worse than shingles. Way worse. Mainly because of all the accessories that go into siding. So getting the siding panels, not a huge problem. Siding, accessories, light blocks, split blocks, you know, all of that stuff. Way more lead time than normal right now. So you might get yourself in situations. And contractors be really careful when you order a job. It's not just, do you have the 25 squares of, you know, Dutch lap white that I need? It's do you also have the 10 split blocks that I need? And so on and so forth. Because you might get yourself in a spot where you can put all the siding on, but you can't finish the job and get paid because you don't have the accessories for another 12 weeks.

Right.

So be really careful about that scenario.

Mike, is that only affecting vinyl siding or is that for.

Okay, yep. Mainly vinyl. Mainly vinyl. Yep. Did not hear. Did not hear anything about, you know, about fiber or anything like that.

Gotcha. So this may be doom and gloom to some, but there's some hope. And, and if you're watching this or listening to this, that's what we're gonna start talking about now. So I like what Henry Ford did with the Model T. You can have any color as long as it's black. The there's something to be said about limiting choices. And there are companies out there that have scaled to pretty large industry leading sizes that have limited their options for their customers, for buying power, logistics and all that stuff. Mike, do you think that now is a good time for companies to navigate, to be agile? Because if you're 17 weeks out, I mean there are companies that are starving. Colorado, for example, where I live, slow storm year. I haven't talked to one company that said this has been a fantastic year. They've either done the same or they've had some dips. They're going to be okay. It was still a good year, but no one had this massive push. Obviously every market's different. Texas is very different, Florida, Louisiana, Lake Charles. But right now, I mean if you were still in the game, what would you be doing as a company owner in terms of aligning yourself with manufacturers and in terms of color selection so customers get made whole, your salespeople earn their commission because otherwise the starving trickle just continues. Yeah, it goes down to the like everybody gets impacted in a bad way. What would you be doing if you were in the business right now to navigate this?

Yeah, so it's still weird to say if you were still in the business. For me, still. Still weird for me to say that. I still feel like I'm there. Right. I still like think about it all the time. Anyway, so listen, I went through this. So 2008 in. Wait, 2008? Yeah, 2008, Omaha, Nebraska, huge storm, shingles on allocation everywhere, huge economic problems in the country, so on and so forth. Plants were way delayed. And we did exactly what you're talking about. And not only did we survive, we kind of thrived because we figured it out. And that put us in a better position than some competitors who didn't figure it out. So one of the things that we did, and not everybody can do this, but we rented some open ground with a fence around it and found out in a about 500 mile radius around that area, all the suppliers and started calling saying what do you have on the most you have on the ground right now? What is it? Is it Tamco? Is it oc? Is it gaf? Is it what you know, what do you have and what color are you willing to get rid of right now? And they would say we have X And so I started bringing in truckloads of this stuff and getting on a forklift at, you know, five in the morning and loading my own jobs and everything else, which is at the time, not. It wasn't a fond mem. Now is a very fond memory actually doing that. I still, I still wish I could jump on the forklift once in a while and load a job. But. But in any case, the point there is if you don't have ground, you can rent and everything else. And truckload material in the principle remains the same. Find out what your local distributors have and then bring that to your clients. Hey, here's what I can get you. I can get you weathered wood. I can get you. I normally sell oc, but right now I can get you gaf. I normally sell GAF right now. I can get you certainteed. And here's why. And what we can do and let your clients drive those decisions. But your sales process has to be nimble and agile enough to be able to present that information to the client and help them kind of navigate that decision. And there's a great. You mentioned Henry Ford. There's a great study that I love to quote that Stanford did years ago. And it was of all things about jam. I mean, I don't know why that, why they picked jam to do it. But if anyone's not familiar with the study, go look it up. It's a really famous Stanford study. They basically had these people go to a grocery store and there was grocery store said, we're not selling any of this jam. We don't know why. And so they put this study together. They had 230, I'm misquoting the exact number there, different types of jam. And the reason they couldn't sell any of us, because people got analysis paralysis. They couldn't decide what the hell they wanted. So eventually they figured out offer them 10, 10 different things. So the reason I bring that up is because contractors and salespeople in general get really nervous. Well, I need to offer choice, but sometimes choice makes the comp, makes the actual process for the end buyer, the consumer, more stressful and not comfortable when if you just present the information. Here's your two options right now. In order to get this done quickly. Consumers are typically okay with that.

Yeah, there's two things that you said that I think were really powerful. One is choice. And the other one, I want to talk about the forklift experience. That phenomenon has been studied to a huge degree. We talk about it in retail sales too. You don't sit down and say, well, what do you want to do? We can do this shingle with this ridge vent and then we can do this. And then we can go this warranty or this extended warranty. You need packages. And although there's virtually infinite scenarios you can do, there's a reason people choose three packages and they did this. There's another study. Have you ever heard of the book Predictably Irrational?

Yeah. Yeah. I have not read it, but you're like the second or third person who's told me about this recently.

Actually, it's phenomenal. It just shows we're all crazy. We all make these decisions, myself included things. I'll give you this example because it ties exactly into what you had just shared is they were selling subscriptions to a print magazine. So option one was, and I'm going to change the numbers, I don't remember what they were, but print was 47 bucks for the year, digital was. What was it, 97 for the year, maybe? No, it was reversed. I'm sorry. And then print and digital was 97. Well, they're like, but why would I go with print and digital at the same rate as just digital? Like, of course I would go the two route. So everyone went that route even though the upsell was huge. And I reversed on the print and digital. But the idea is the price anchoring. So then they did this test where they pulled out just the digital at 97. So it was 19 bucks versus 100 bucks. And then everybody chose the $19 offer. So the story is that we all will anchor our decisions against what's in front of us. And it's the same reason that restaurants do this. You'll see one really high priced menu, the steak and lobster, surf and turf, the filet mignon. That might be 28 bucks at a decent restaurant or higher at a fancy place. And it's because that, that $20 burger, which if you walked into a burger joint, you're like, $20 for a burger. What the hell is this? New York City? You know, no offense, anyone in New York City, just prices. But all of a sudden the $20 burger compared to a $45 filet or market prices is more appealing to. And the lesson behind this is people need to be channeled into decisions, otherwise they become their own worst enemy. And I think, I mean, have you ever been before you knew that because you sold retail as well. Like if you walked in, you're like, well, what can I do? We have five different shingle manufacturers with 20 colors a piece and Then let's talk underlayment. Then let's talk nice and water. Then let's talk ventilation. Then let's talk quarantine. Then you're like, that's a 17 hour sales appointment with every question under the sun.

Yeah, yeah, we used to. I used to take the siding samples and the gutter and trim samples drove me nuts. And we would literally unscrew them and take out virtually everything and leave it with the five choices that we wanted to give people. Then we also, if they couldn't come to a decision, it's not like we said, thanks, we're not going to serve you. We said, okay, we have another, we have other choices here. But we tried to make that process as simple as possible. We just removed them all. We didn't even show them as options because it freaked people out.

Faster decisions, happier customers. You touched on stress. So for everyone listening, call your supplier, find out what they have. Be flexible. I know a lot of people have allegiance to one brand or another and you know, I might not, I might get a bunch of hate comments on this, but my personal opinion is you align every rep in every industry. Excuse me, every market's different. You work with a company that's got your back because all of them have issues that come up and it's who's going to support you that's been, should I do this or this? I was like, first of all, the growth of your company, the least important thing is what shingle you're installing. In my opinion, if you can't sell ice to an Eskimo. Excuse me, A hamburger to a starving person. If you can sell ice to an Eskimo, you're a good salesperson. A hamburger to a starving person, you're just not going to grow. So great advice. Call the supplier, limit your options, and always have that in your back pocket. You know, you do that one obscure home with a green roof in the log cabin. Look, you're going to need to bust out some creativity because they're going to want it to look the same. But I do want to touch on what you said on the forklift experience, and that is, I forget who said this. You might know. Never let a good crisis go to waste.

Right.

Who was that, by the way?

Was that. I don't know, but it's a great. It might be Carnegie.

It might have been Carnegie. If it's not, I'm sure someone will post, post in a comment if you know who that was.

Where's my Carnegie book, by the way? Which I know I make Everyone who starts working for me, both at 1, 2, 3 when I did that, and at Elite Read, Carnegie Read How Do My Friends Influence People? Is like their first order of business because it's the greatest sales book ever written.

Phenomenal.

Anyway, sorry, go ahead.

Yeah, but on that note, like, right now, people are in crisis mode. We're going to touch on supplementing too here in a minute, guys and gals. When we are faced with these crises as salespeople too, you know, it's not just the customer. It's your commissions that are tied up. It's customers especially. There's a lot of people reaching out that are working like Charles, and they're saying, hey, you know, some they want gcs. I responding to an email this morning, I'm having a hard time making sales because people want a GC to handle it all. And I always say, like, whether you're a GC who does it all or just a roofer, when you position it the right way, you can win business against the other two is a stronger value proposition. But we need to adapt and be agile. In 2020, which is a dumpster fire of a year, we're all looking forward, hopefully until, you know, three months from now, maybe two months from now, whatever it is. I suck at math. People correct me on this channel. But we need to adapt. And we've adapted on inspections. I've had guys that are knocking doors and taping the letters to the door instead of sending them in the mail with painters. Then that worked. And I had another dude who messages me and he's like, hey, you know, I ran all my appointments, but I just did a no contact thing. No tech. He just would sit out front and call people and he'd slip his contingency agreement into. They got bags that were branded with the company. Put a pen, hung it on the door backwards. Truck, Cool. You can go grab it now, you know, And I'm like, that's adapting. That's agility. So just because we're facing a crisis doesn't mean you got to tuck your tail between your legs or quit. This is an opportunity to. For you to know that everybody else is doing it and the top 20% are going to just explode through this and adapt and be just fine. So dig deep.

Yeah, one, one quick comment on that. I think you said something a minute ago that's, that's really important if you're going to be able to adapt, which is this idea that there's an allegiance to a shingle or to a distributor. And I might get some people who don't like that. I say this in my and my manufacturing and distributor friends, but listen, at the end of the day, you know your allegiance as a contractor is to your business and thereby your people, right? That's what matters. The shingle that you install and the place you buy it from is the last thing that matters in this type of a scenario. Because if you are hellbound on sticking to one and that one can't service your needs and your clients needs and guess what, you're not going to have people working for your company and you're not going to have a company that can survive. So you have to break yourself of those, those long held beliefs and understand that, you know, crazy times call for crazy measures. And that might mean switching from A to B. And that's okay, it doesn't have to be forever. But you need to be willing to do it now and you'll be fine. Like I said and like you said, you adapt and you'll grow. You know, this is not a time for everyone to put their head down.

Yep. And I know there's some people are saying, hey, will, I sell X brands warranties and I need to match multiple accessories and have X number of products from that manufacturer. And what would you do? And I have some thoughts, but I'd love to hear yours on how you would navigate that. Both from a brand loyalty, we know that you have to push a certain number of warranties to keep that status. So what do you do from a business standpoint and from a customer standpoint?

Yeah, I think it starts with what we said at the beginning, which is call your distributors and find out what do they have. Because the likelihood that you can't still sell those warranties with brand A or B is unlikely. You just might have to use a particular color when you do it and a particular accessory when you do it because the product is there. This is what I just learned from this guy when I talked to him. The product's there. It just might not be in the normal way that you order it. It might not be in, you know, you might not get the, you know, this particular type of, of synthetic or something. You know, it's, you just have to be, be able to adapt. So it starts with learning what's on the ground. Don't be so rigid that you say, well this is how I have to have it. There's other ways to get there. So that, that's where I'd start.

And this is, I always think of things in a sales and marketing standpoint and you can create your own warranties. If you can't, you know, let's say you're waiting to install a roof and you're going to sell their top tier warranty, but the ridge vents delayed and it needs to be their brand of ridge vent. Well, now you got to get creative for the customer and maybe you create your own warranty because you can't get that ridge vent, but you can get another company's ridge vent. I mean, maybe I'll get put on the chopping block to say that some roof's going to explode with a different ridge vent. I don't think it will. I think you'll be just fine. But you know, you can create your own, your own company warranty to stand behind it. You're doing it for a year hopefully. But yeah, awesome stuff, man. Let's talk because we only have a few minutes left today. Let's talk supplementing. Do people like, are we, are our backs against a wall here or is there an avenue to legally, ethically and reliably get paid while these price increases just slash profits, which impacts many salespeople and their families? So what do we do?

Yep. Yep. So I'm going to go with our reoccurring theme here of, you know, kind of seizing on the moment because this is a huge opportunity for those who actually take advantage of it. The last price increase in exact was October 20th. If you have any job, any job in your pipeline right now that was sold on a scope pre October 20th from, you know, insurance paperwork was done pre October 20th, then you can reprice that job and to the tune of sometimes thousand, literally thousands of dollars depending on the market. You're in Lake Charles right now. It's legit. Thousands of dollars repriced and that is no supplement. You don't even have to add anything to the, the estimate that may have been missed. It's just taking that estimate saying here's the pricing today and we are doing a ton of that right now. Surprisingly, you still have to kind of fight those sometimes. And those of you have watched Adam's channel before and heard me talk on it. I don't mean fight by yell and scream. That's not how you get things done. But I mean kind of plead your case as to why it's necessary. Cause not every insurance company will just take it. But you can get it and you can get it consistently and it's a lot. So anything you have in your, I used to call it the drawer, your backlog right now on paperwork, even if you sold it yesterday. But if the scope was written pre October 20th from the insurance company, you can get that repriced.

So awesome advice. There's people that are watching that are in two camps. I know this. That either don't know where to find it on the scope to know the date or don't have xactimate their younger company. What are their options? Let's start with this. Where do you find the date? The xactimate date on a scope?

Yeah, yeah, it's in the top. So you know, you've got your customer info the adjuster who was there and then it will say it'll have some numbers and then say 1020 perfect. You know, October 20th or before, you know, be a different date before that. I can't remember when the previous one to that one was exactly, but that's where you'll see it. So typically under that adjusters adjusters name the estimator's name. If you are a new company, you're not using Exact, that's fine. You know, I vote I didn't use exact for a long time and still supplement a lot. The way you, the way you deal with that is you show this, the insurance company the material, invoice, date of purchase, not the pricing. It is not the insurance companies, you know, they don't need to know what you paid for the shingles. So you black that out and then you send them the invoice. Once that job is complete with the date you purchase the material and if it's past October 20th then you just say I need this repriced and they'll essentially reprice it. Or you can put it in your own Excel sheet. If you use Excel or whatever you use and just, you know, up that pricing, you know, material may have gone up 10, 20% in your market, 8% in some places. You tack that on to your the original price that was put in and submit it.

Awesome. And for those of you I know I get this a lot people are concerned. Am I going to get blacklisted for supplementing or am I going to get a bad reputation? And you and I talked about this by the way, I'm going to put click this card. It'll be here or here. I don't know where we're going to put it. There'll be a card here for another playlist on supplementing. Mike was a huge part of that. He's in a few of them. Check it out for anyone who's new to this. But the you don't need to be afraid when you're asking for what's right. And remember, this is ultimately about the homeowner. They've paid their premiums. This isn't a slimy tactic. It's not saying pay me more. This is. It was an agreed upon. This is all contractual obligation between homeowner, insurance company, you and insurance company and you and the homeowner. So did I duplicate any. No, I don't. Did I? You, homeowner, insurance company. Anyway, everyone's got this agreement that's just. We're going to do it by the book. And this is by the book. I'm ordering material. There's COVID 19. There is a production output supply issue. Demand has gone up. So price went up. You need to pay for it. It's the same thing. Like otherwise that. That falls on your bottom line, your commission. Even if you're a salesperson listening, you can still email and ask them to do it. I've done that even when I got busy and I was lazy because I knew if I repriced it, they're not going to believe it because they're going to think that I manipulated line items. They're going to reprice it anyway and then send you the revised scope. So don't be shy. And also, Mike was too kind to not say this. You can also reach out to his company. I'll put a link to their website in the description. If you're on mobile, it's a little triangle. You'll see links to all the products, services, Mike's contact info, everything. And you're invited. I hope it was okay that I just put that out there to reach out to Mike, see if it's a good fit. He might be able to help you, especially if you're working hurricanes right now, if you're down in Lake Charles or if you're dealing. I talked to someone in the northeast. He's driving like 70 miles to pick up CDX for a redeck. And I think they were charging him like $50 a sheet or something crazy. Like they are just price gouging.

Yep. And that's a big. I know we've got a wrap, but real quick, because it's a really good point and I didn't. I looked at my notes as you were talking and I meant to say this. That is a. So zip code by zip code, huge differences, literally sometimes hundreds and hundreds of dollars. So we have a client right now who is working three hours from the biggest like major town. The crews are three hours away and initially all the price lists were coming from the zip code next door. Because that's where the adjusters were all coming from.

Yep.

And once we figured it out, the zip code pricing for where the actual storm occurred is like 9% higher than. I don't remember the exact number, but something like. But 9% is a lot. I mean it's a lot of difference. And then of course, if your crews are staying overnight in hotels, Lake Charles right now, other places around the country, if they're having to travel three hours, that's, that's O and P is a very reasonable argument at that point. That's much more winnable than just, you know, we drove 20 minutes to the, to the, you know, from the, from the shop to the house. Which is still in my opinion is a reasonable argument too. But it's easier to win when those scenarios are happening. So that's a big deal.

And it's. This is the beauty of just the expertise. I mean you've got decades of experience in this. Your team does. You know anyone new in supplementing? I learned it, I was slow. I talked to, I talked to a sales guy the other day. He says, hey, I got this opportunity to become a sales manager for a new company because he didn't like where he was. And you know, I'm going to be on there. I've never supplemented so I got to learn it. And I was just like, man, you got to be careful with what you're going to. They want you to be a sales manager and supplement all the jobs and grow a sales team and handle production. I was like, kiss your life goodbye.

Yeah, right.

I'm wired in sales. Like you sit me down into xactimate and I'm like rfg, wait, no, they don't do s on that insurance and going through it. And I'm like plucking like a chicken. Work with someone that knows what they're doing. And the nice thing, I'm going to shamelessly plug Mike here. You'd be silly to at least not talk to someone like Mike. Hopefully Mike, because you only pay on results. And it's often like we, when we were in it, we hired a company. This is before this was you were contracting when I was contracting. It is a pay for success model and often cheaper than doing it in house. And time is money. And for me, I would much rather pay it pay per for performance from someone who's better than me and faster than me and frees up my time to go sell. So you know, you've got lots of options. Whoever's listening, there's programs out there to learn it, you know, then. Or you just hand it off and, and grow, whatever. There's different, different, different fits for different people. So Mike, how can folks get ahold of you?

M Braun B R A u n@eliteclaimsolutions.com or info eliteclaimsolutions.com is also an easy one. Or just go to our website and fill out the contact form. Elite Claim claim. Not with an S. Everybody thinks it's Elite claims Solution. Elite Claim Solutions.com Awesome.

And I'll put links to all that. Hey, thanks for joining us today, Mike. I super appreciate you being so willing. And by the way, the last thing, I should have said this in the beginning. Mike and I paused the interview for him to talk to the supplier and we were trying so hard to put it on speaker and obviously we wanted to do things above board. I'm not going to sit here and record a call illegally. Yeah, if I was in Texas though, it would have been illegal, which is funny. It's a single party state, that's all. Yeah, but I'm not in Texas. So anyway, we couldn't do that and the gentleman wasn't willing. Totally respect it. But we got the info from Mike. So Mike, thank you again and appreciate you being here.

Yeah, thanks so much, Adam. Appreciate it, man.

Awesome. And anybody click that video description, you'll get links to everything in there. We'll see you on the next one.