Roofing Sales About To Get Harder: NEW Pricing Threats & Competition
Adam Bensman warns roofing sales are about to get harder: falling consumer spending, rising rates, and private-equity competitors are squeezing margins. He breaks down how bigger firms cut costs through bulk purchasing and AI, then shows how to compete by auditing overhead, streamlining sales, and offering financing so homeowners can afford the work.
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Roofing sales is going to get even harder in the next 12 months. My prediction is that pricing threats will continually fall upon us in a variety of forms. Things like private equity groups that have buying power. Things like smaller companies that are striving to survive. So they're racing to the bottom. And as insurance companies limit their coverage, increase deductibles and fight paying claims, and then we compare that with rising material prices as consumer spending peels back, homeowners want to delay these expenses and financing goes even higher. We're facing kind of the perfect storm and some companies are going to struggle and others will continue to grow. So what I wanted to share with you is what I'm seeing from being in the trenches inside the Roofing and Solar Reform alliance, working alongside hundreds of roofing companies all over the United States to share with you what I'm seeing as trends. What's popping up in certain markets to help you spot these trends, adapt and get ready for what's to come. Some people have shamed me and saying, hey, you're just trying to use these scare tactics. That's total garbage. What I'm sharing with you is the reality of what's happening. Yes, it's scary. Yes, there are companies that will struggle and go under. In fact, I'm seeing it now. There's peelbacks of companies that can't afford to operate the way they used to. But at the same time, there are companies that are skyrocketing their growth because they're riding the waves of change and they're prepared for it. And that's why I wanted to make this video. So right before we jump into it, just want to say quick welcome or welcome back. Adam Bensman here, founder of the Roofing and Solar Reform Alliance. And everything I do here is designed to help roofing teams like yours outsell, outgrow and out compete the rest of the so we can stomp the scum out. Now let's get started. Roofing sales is personal development in disguise and the reward for growth is life changing. I hope my content helps you create a richer life and bank account. All right, pricing pressure is upon us and I just want to summarize this. We have pricing pressure due to consumer spending peeling back. We are through the 2020 era where our federal government was printing money for people to spend. Next, we have interest rates that are going up and lenders are becoming a bit more stringent on who they lend to and the rates they lend to. We pair that with skyrocketing material prices which make already expensive Items like roofing, even more expensive. And then we bring in the other factors such as private equity. And not large companies, but small companies responding to these sales pressures. So let's take a look at what is happening in the market and how you can be prepared to again outsell, outgrow, and outcompete the rest. This right here, this circle represents the cost to sell and produce a roof. Now, this sliver right here is our overhead expenses. This is what it costs to run a roofing company. Then we've got our material, our labor, and our cost for sales. So here's our material, here's our labor, and here's sales, okay? And we could just group in here marketing and sales if we want to. But the big chunk of the pie is paying commission. Salespeople are part of the process. And of course, here's profit. Now, what ends up happening is if people are getting competitive on price that needs to come from some slice of the pie. There's a couple of ways to do this. Many smaller companies, what they're doing in reaction mode is saying, okay, well, I'll just give up a chunk of my profit. So they're going to cut their profit out, okay? And this is going to just be part of their price drop. And they'll say, hey, I'll get competitive by dropping the price and it'll eat out of my profit. Now, other companies, this is where, again, private equity comes into the mix. They have purchasing power because they're a large organization. By the way, this is one of the things that is really nice about working in a powerful organization such as the roofing and solar form lines is when you come together with a large group of people, you have buying power, purchasing power, and that's what we can do together. That's why the roofing and solar form alliance, I say, is one of the most, if not the most powerful network in the roofing industry. So these private equity groups, what they'll do is they'll say, okay, well, I'm going to centralize my operations. So that means my overhead can actually reduce. So I can free up this much of the pie from overhead. Why? Because I've centralized some of my operations. We've got software that often is being created in house, and they have a competitive advantage then material. They have way more buying power than any single company will ever dream of having to. Now they're buying material cheaper than everybody else. So they're able to shave out even more from their material. Now, labor, this is going to be relatively consistent, one might argue that they're going to be able to shave some of this out. But let's call it what it is, this is probably the last to go. It costs what it costs to put on a roof and labor's expensive and insurance is expensive. Now the other thing is sales and marketing. Now what they've been able to do using technology, using AI, using their own innovative lead processes and developing sales process which can cut out the requirements for salespeople or as much of their time now I don't think salespeople will be going anywhere, but let's keep an eye on AI, let's keep an eye on technology. Instant quotes online. And with communications happening more electronically, the need for salespeople again is not going away. But there's certain elements of the sales process that can be removed. So as this gets streamlined, they can save this money. So what a large organization can do, or a private equity group or potentially like a member of RSRA or an organization with purchasing power, buying power, is able to shave these aspects of their expenses out without compromising profit, which results in lower prices for the consumer while padding the amount of profit that they're able to make. Now method two is if that company, which I've heard snippets of this, I have not been able to validate it, I have not been able to see the books of this one particular organization that was brought to my attention. But what I've heard is that there's an organization that's being really competitive on price. So, so if they shave these, but they're also willing to give up a little profit, saying, hey, you know what, we're in the volume business. So just like the Walmart mentality, Walmart is gonna again make the volume game or Costco. If you go shop at Costco, you can buy stuff cheaper because Costco is buying in bulk and they're selling in bulk. So if they're willing to give up just a little bit of profit, but make up for that in volume, now, they're gonna be able to compete at a much more competitive advantage. And, and instead of having to give up all of this when you actually factor in everything, they're only giving up a small bit of profit. Which is why we're going to start seeing, in my estimation, prices begin to be competitive, very, very competitive on the lower end. Reminder, with interest rates that are increasing, with material prices that are increasing, and with consumer spending decreasing, this is why we have the perfect storm. So what does this mean to you? What this means is that as a organization or A salesperson. We need to be aware of what's happening and why so we can maintain being competitive. Which is why it is very important as an owner to understand your overhead expenses and audit them on a quarterly basis. If you haven't read the book Profit first by Mike Michalowicz, do that right now. You will likely be able to find expenses that can be trimmed. Next is your material. If you audit the material that you're using, I this is not popular opinion, but in today's time, insurance companies are going to homeowners saying, hey, your roof's 10 years old or older, you got to replace it or we're not insuring you. Now, a roof really needs to last 10 years. In many markets within that 10 year window, there's a high likelihood that that roof is going to be damaged by a severe weather event. Which means my opinion, any of the major manufacturers, as long as the material is installed the right way is it's going to last the 10 to 12 years it needs to last until the insurance company says you got to replace it or there's some severe weather event. So again, taking a look at your material expense is really, really important. And then auditing your sales process to streamline it, not to start paying people less money, but to look at how the people on your team who are mission critical can operate more efficiently. Now, likewise, what this also leads us to doing is instead of focusing on product, this because roofing is a commodity, okay? Everyone has access to the same products and selling the same roof systems. We need to instead focus on selling the experience. Now, what do we mean by selling the experience is that I don't remember the exact stat. So I'm going to share this anecdotally for the concept, but someone can fact check me and drop it in the comment section below that the average homeowner surveyed within 90 days of getting their roof installed has no idea what manufacturer was installed on their roof. Which again shows that product is far less important than the experience or which is what matters here today. The other thing that we need to do is make the money make sense. What do I mean make the money make sense? We need to make the money make sense. Because if I'm there selling a $20,000 roof and I don't offer financing, for example, but the next guy offers a $30,000 roof and I can get started for $250 a month or zero down zero payments for 12 months, who's going to win the business? The person that sells a better experience and makes the money make sense today versus this person requiring them to come out of pocket $20,000. So there you have it. These are my predictions over the next 12 months and longer as we see this perfect storm of changes come into the industry in the Roofing and Solar Reform Alliance. Just this morning I ran a training on this exact topic and how to make the money make sense to sell the experience and present higher ticket pricing. It what seems to be a no brainer investment to help you win more deals even if you're more expensive. So if you want even more from this type of training to join myself and other industry leaders like John Cenac and Daeshon Bryant, Cody Lannells and Jim Alleen in the trenches to help you navigate the changes that are coming in the industry and arm your team with the ultimate toolbox while you're surrounded by the most powerful network in the industry. Then click the link in the description to learn more about the Roofing and Solar Reform Alliance. Hey, that's all for this video. And just cause our time's about to wrap doesn't mean you're in. My time has to. If you haven't jumped into my free training center, get in there now. I got binge worthy content for the rookie, the seasoned veteran or the owner or manager and there's no catch. I can't wait to see you in the next video. Stay tuned and watch this very next one that I think you're really going to love. We'll see you soon.
