HORRIFYING Truth About Competing on Price in Roofing Sales

I'm about to show you the horrifying reality about competing on price. And my guess is that after you watch this video, you will never, ever, ever want to drop your prices ever again. This topic keeps coming up because there's no secret that there's always someone who is willing to do it cheaper. And in fact, I was recently down in San Marcos, Texas training a team of Owens Corning contractors for an invite only event down there and this kept coming up. Adam, we have cheap labor. There's always someone willing to do it cheaper and we're really struggling here. Now I have an entire training on how to sell with the highest price, even beating the competition. But this isn't about that. What this video is really designed to do is to plant a seed in your mind to change the way you think about sales forever. So you can run all of your personal sales decisions and or your company sales decisions by running them from the numbers. Now, I'm horrible at math. I've double checked this math. But I encourage you to pay very close attention and double check my math. Most importantly, I want you to follow along and do this math for the numbers that are relevant to your personal sales or your business. So let's get started. Hey, before we do, just want to say a quick welcome or welcome back. My name is Adam Bensman, the roof strategist. Super excited to have you here. Everything I do here on my channel is designed to help you and your team smash your income goal and give every customer an absolutely amazing experience. But an amazing experience needs to be funded. We can't do it if we're broke. So we need to learn how to sell with a higher value. And that's going to start with with our mindset. So let's jump right in, shall we? The horrifying truth about competing on price. My goal is that after you do this math with me, you're never going to want to drop your prices ever again. Let's start looking at a sales rep. I'm going to do an average of 100 roofs that are sold for this salesperson. By the way, this is a number based on a recent poll I put up on Instagram. You can follow along roofstrategist or know the roofstrategist. And I said, hey, how many roofs should a average salesperson sell? Like someone who just like a good fit for the industry and they're working full time and that range was 50 to 100. I know that there's many that can do more depending on the structure of the business. So reflect your Number, but follow along on my math. Now, generally speaking, when we start competing on price, we're doing price drops on the retail side or we're giving things away or free upgrades, and we end up forfeiting our commission. And that range is going to be about 200 to $500 when we start giving things away. Now, what many people and salespeople think, and believe me, as a new salesperson, I fell victim to this very delusional way of thinking, which was, hey, well, I'm giving up 2 to $500, but it's in exchange for earning a thousand or two thousand or three thousand dollars. So if I have to give up a little, it's okay. And again, you might be sitting there thinking, well, yeah, that makes sense. Like if someone said, here's two grand or here's 1,800, like, do I care? Like, I'd rather two, but I'll sell for 18, because it's still better than nothing. But what we don't think about is the compound effects of what that actually means on our personal income, which means if we sell 100 roofs and we're giving up 2 to $500, we are forfeiting $20,000 to $50,000 of income every single year. We are literally giving away. So imagine this, and I'm going to be a little cheeky and playful because I needed a gentle nudge when I had this thought process. And imagine going home, your significant other tonight and saying, honey, are you cool if I give away 20 to $50,000 of our income to make easier sales and bring some money in? Your significant other or spouse is going to turn to you, reach out and grab your shoulders and give you a good solid shake and say, honey, just learn to sell the value because you won't need to sell as much. Why are you giving away our income? That's feeding our kids, setting up our future, buying our dream home, and setting us up to retire early. What are you thinking? So to make up for this 20 to $50,000 deficit, if your average commission is 2 grand, that means that you have to sell an extra 10 to 25 roofs per year, which is a 10 to 25% increase in your sales volume just to make it where you should have been. It is crazy. Now, my guess, and from everything I've seen, if you have to sell 10 to 25% more roofs, okay. Which my calculation is that if you were to sell these roofs without having to compete on price, your close weight may reduce, but it's not going to reduce 10 to 25%. Excuse me, in my experience, which means just sell at a higher price. Even if you bring in less sales, you're more profitable and you'll make this money as opposed to having to go chase 10 to 25% growth to just net out where you should have been. Now this picture gets way more horrifying when we start looking at a company level. So owners and managers pay very close attention. For this example, I'm going to use a company that's selling 300 roofs a year. All right, 300 roofs, that's about a six million dollar year company with a $20,000 average on roofs. So your mileage may vary if you are competing on price. Generally speaking, when we're talking full roof systems, we're not competing on hundreds of, we are talking thousands. So for this example, we are going to say that you're giving up $2,000 on every single roof. Now you might be doing this math really quickly and having a heart attack just the way I would if I saw this. And I would say, holy smokes. By dropping my price by $2,000 throughout my year of selling just 300 roofs, I am leaving $600,000 of pure gravy roof profit on the table out of my own pocket from the company. I am giving away over 1/2 million dollars. Pardon me. This gets really spooky because that's a boatload of money and it gets even spookier when we look at the cost to the, to the company and what we need to do to make up for it. If we're looking at an average company profit. And again, this is a range adjust to your market, what you're selling. Storm, retail, northern, southern market price per square, if I'm talking average roof is $4,000 of profit. That means that we must sell 150 additional roofs to get that back. So let me remind you, you'd have to sell 150 more roofs, which means 150 more homes that you have liability on that something can go wrong to that you're married to through the life of the labor warranty and you have to have your sales force and cash flow tied up you to sell 50% more roofs to get to the same amount. So if you have to sell 50% more, my guess is if you're coming in at $2,000 higher on average, let's say, because you're not, you decided I don't want to compete on price, is your close rate going to go down by half? No. So even if you sold less roofs with a higher amount, you will end up making more money. This race to the bottom is ludicrous. We forfeit money. We increase our liability. Okay. We destroy our cash flow. We steal from those we love. And yeah, that's crazy. I know. Steal from who we love. And you might be saying, adam, that's really dramatic, but if I took 20 to $50,000 out of my family, I'm stealing from them. I know it's a different way to think about this. And we are not financially healthy. If we end up. My handwriting is improving. That's a joke. Not financially healthy. If we ended up bringing this extra 600, look at what that would do for your growth. If you ended up bringing 20 to $50,000 more per year, look what that will do to your family. So what I want you to do now is to do the math based on the number of roofs you sold, the average amount you've given up on a project, figure out that difference and how much, how many more roofs you need to sell. And then what I'd love for you to do is drop a comment and tell me, are you ever dropping your price again? No. Because smart salespeople who just learned to sell at the higher price, even if their close rate isn't as high end up in a better position with happier customers in an amazing experience because you can fund the growth. And there you have it. This is the horrifying truth of what it means for you and your company to race to the bottom. Hey, thanks for joining me in today's video. If you want me to do a follow up video on selling with the highest estimate, go ahead and drop a comment below. If there's enough demand, we'll consider putting that one in the video queue. Super appreciate you being here. I do have one thing to close with. Just because our time here is about to wrap up doesn't mean your and my time has to. And I have some exciting news. We have a brand new free training center. And in our free training center, we moved over our pitch Like a pro roofing sales training video library, which you can get 100% free at theroofstrategist.com or texting the word free to 303-22-2271. And inside you're gonna get the pitch Like a pro roofing sales training video library. The roof claims crash course as well is in Here we have my recommended reading list of all the books that I think are actually worth reading. It's the top 82 organized by category. Here we have the replay for my webinar on the 10 closing techniques for every situation. You can click right there. So I'd love to get this in your hands. You can click right over here and pop in and get a free copy of the Pitch like a pro Roofing sales training video library. By the way, if you've been in there before, we're getting that all updated. You should be getting an email with your login link to get into the free training center very shortly. And if you want to hang with me here on YouTube, pop into this video and I will see you on the next one.