How Moving Companies Boost Profits in 2023

I always aim for a 20% profit margin in my moving companies. And what that means is if you do a million dollars in revenue, you've got 200k that you're able to take home personally, right? If you do 10 million in revenue, you got 2 million that you're able to take home personally. And I know this sounds crazy to a lot of people when they first hear me say this, because industry average is 10%. But. But when we think about the average, the average is people that are crushing it and people that are losing money combined to come up with that average. Right? I don't know about you, but I don't want to be average. My clients don't want to be average. And if you're listening to this, I'm pretty sure you don't want to be average either. So how do you boost profits in a time in 2023 when there are less people moving? Right. You may have experienced a little slowdown this year. You may have had a big boom in 2020, 2021, and then all of a sudden things started to come to a halt, right? That's just business. There's hills and there's valleys, right? It goes up and it goes down. So what do we do in the downtimes to prepare us for when things come back up, but also so that we can maintain and we could profit in a period where there might be less people moving, you might not have as many leads as you want to have or as many opportunities. Right? For me, when I was going through the recession in 2008, it hit me hard. I mean, I had five or six locations at that point, long distance division. We were rocking. And then all of a sudden things started to slow down. All of a sudden things felt like they were coming to a halt. And it really started to highlight all the inefficiencies in my company. I thought we had things dialed in. I thought things were on point. I started a business in 2000, and from 2000 to 2008, we're rocking. I was making a ton of money, the businesses were growing. But what I realized when the recession came was I built my business in good times. Therefore, I built it to thrive in good times and not in bad times. And so during this period, I realized there's some things that I needed to do in order to get profits back up. Right? Same thing right now. Same thing today. This is what I'm advising my clients to do. And I want to break it down for you today, because if you're struggling to get moves, I Get it. I know where you're coming from, right? I know the feeling of wondering what it's like to, you know, am I going to make it right? What happens after moving season? Will things ever turn around? Is the industry over? Are people going to, you know, like, all these thoughts go on in your mind. And here's what I could share with you. The companies that I saw succeed in 2008 took action. The companies that I saw not succeed froze, right? They didn't know what to do, and they got so in their head that they were thinking everything was outside of them that they couldn't control it. So I want to give you some things to put it back into your control so that you could start thriving right now, regardless of what's going on out there, all right? Because we've got clients that are doing that right now, gaining market share, kind of putting the blinders on and saying, listen, I don't care what's happening out there. This. This is what we're going to do to focus. Because as you're doing that the same way with me, you build the capabilities, right? I would have never been able to take my business to $20 million a year had I not gone through that period and learning and adapting and pivoting and finding new ways to grow that I didn't even look for before because it just felt much easier, right? So first thing I want to share with you today is focusing on sales, right? Every time we see someone, a company that we're working with, and they've got cash flow issues, they're not making enough money. The profit's not even at the average at 10%, let alone 20%. We look at it almost every time it goes back to sales, right? And so many people think that what they need to do is start cutting costs, cutting costs, cutting expenses. And let me share with you how focusing on sales, your booking percentage specifically, is going to help you make more money now, regardless of the amount of leads that you may have or that may have went down, right? So when we talk about booking percentage, booking percentage is, you know, if you get 100 leads and you book 22 of them, that's a 22% booking percentage, right? And I know you're probably wondering, Louis, what's the average in the industry? And it's really hard to put a number on that because everyone uses different marketing sources, and your marketing sources are going to determine your booking percentage for that source. So if you've got a whole mix of different marketing sources, and, you know, some are booking at 50% and some are booking at 10%. It's going to mix. So depending on how much money and resources you're putting towards the higher booking and the lower booking, it's going to be a mashup of numbers, right? So my suggestion is determine what your booking percentage is now, make that the baseline, and look to improve it. You know, we did a case study on a small moving company, mid sized moving company, and a large moving company to see what would happen with a 5% jump in booking percentage, right? So let's say we're using the number, we're talking about 22%. So they go to 27%, right. The number works wherever you're at. So whatever your number is, you go 5% higher, right? So 22, you go to 27. And so we ran these numbers, and based on the same average move, right? Same average move, it wasn't like, hey, you're making more money per move. It was just, let's say Your average is $800amove or $1,800amove. Whatever it is, same moves, you're just booking more of them. Well, you've got the small moving company, that is a $375,000 company a year, right? By increasing the booking by a 5% jump, they increased by $156,000. Okay? Small moving company, a mid sized moving company doing a million dollars a year increased $450,000 extra with a 5% jump, right? A large moving company doing $2.5 million.

With a 5% jump increased by a million dollars extra. Okay? That's about 40% across the board increase in revenue by just booking 5% more, bumping up 5%. Do you know what that does to the bottom line? Because here's the thing. There's no extra money being spent on marketing there, right? That's just saying, hey, here's the opportunities that are coming in front of us. Let's book more of those, right? So you might be saying, that's great, Louis. How do I do that? Well, you do that by really putting focus and emphasis on your sales. And what I can tell you is that most people overlook this part. Right? And that was me. That was me for years. It was like, hey, jobs were just kind of falling in our lap, so to speak, right? I mean, we had a sales process. We had it dialed in. We. But we didn't have it dialed in like, you know, this is life or death. Like, we need to do this now like we did in the recession. And once we started to make those shifts, Everything changed. So what are some of the things you could do to increase your booking percentage? Well, first of all, when you get a new lead, let's say it comes in off your website or you're buying a new lead, get them on the phone asap. Our goal was to get them on the phone within five minutes of that lead coming in because the customer is focused on getting the prospect. Really? At that point, I call them customers because once it's a prospect, it's like they're a customer and they're in that zone. When they're thinking about getting a quote for an estimate, then if you're calling them back two hours later, they're on to something else. They're in a meeting, they're picking up their kids from school. And you don't have that same attention that you would have if you get them on the phone right away. So you got to get them on the phone right away. Then if you don't, if you're not able to, you've got to contact them in different modalities, right? You've got to call them, you've got to email them, you've got to send them a text, you got to make sure you leave a voicemail. Most people, Lewis, I don't want to bother them. It's not bothering them, right. It's helping to reach them in a modality that works for them. I don't know about you, but when my phone rings, I don't answer it unless I know who it is, right? When I see a number, I don't answer it. I'll let it go to voicemail. But a text, I'll look at the text. Other people are the same way with emails or other people are the same way with a voicemail. They'll hear it. They'll see there's a voicemail. They got to hear who it is. So you want to make sure that you're reaching out to them in multiple modalities, right. And then you have a cadence of lead follow up. Right. Getting them on the phone. Right. Our goal with every one of those leads is get them on the phone, book the job, get them on the phone, book the job. So we've got to be able to get them on the phone first. So once you go through that and you get them on the phone now, you really got to do a good job of painting the picture for them. And we did that through having a sales script. Right. When I started off, just I was working out of a truck rental yard and I literally would wrote down a script on a piece of paper and was like, okay, I want to make sure that I'm hitting all these points all the time and I don't miss anything. So I had that there ready to go and we refined that along the way. Right? And the sales script is not something where it sounds like you're reading from a sales script. Like it might sound that way for the first few days, right? Maybe the first week, the longest, while somebody's training. But after that, it gives you and your sales team an opportunity to.

Have consistent messaging, right? You're saying the same thing to everybody. You're making sure that the things that you need to say on every call are being said, the things that you shouldn't be saying on every call aren't being said. Right? You're creating that consistency and so you're kind of painting the picture. And what you're doing in that presentation is. So whether it's over the phone, whether it's an on site, whether it's a virtual survey is you're starting to plant the seeds of your value as a company. Okay? Because we also don't want to be booking based on us being the lowest price around. And so you're doing that now. You're not going to book every job on that first call, right? You're going to need to do some follow up. And this is where we see our clients or people that come in for the first time and we start working with them are missing a huge opportunity, right? Huge opportunity. And a lot of times it's that mindset or that stance of like, hey, I gave them a quote and if they want a book with me, they'll call me back. I don't want to be a pest. I don't, I don't want to hound them, right? And the reality is people appreciate diligence. People appreciate when you follow up with them, right? Everybody's busy these days. They've got things going on, right? If they don't have things going on, they're on. I mean, they're consumed. Their attention span is short. So you've got to be able to reach out and help them solve the problem that they initially reached out to you for, which was to get a move, right? And so when you reach out, you always want to make sure that you have a reason for your call. Don't just, hey, I'm just following up here to see if you want to make do this move, right? Have a good reason for the call. And this way you're doing a follow up, right? And they'll appreciate it. And your booking percentage starts to skyrocket at that point. Right? And even then, you're going to have some people that maybe say your price is too high. Well, if your price is too high, or they need to get other quotes or they need to check with their spouse or they don't know the closing date or whatever it is, you also need some rebuttals.

To overcome those objections. Right? Those are objections. And, and when we think about the objections, I look at that, and we used to say, okay, well, we just haven't done a good enough job of educating them on why our company is the best choice for them in this move, even if we're charging more than other people. So it's not that you need fantastic salespeople. Great salespeople sometimes are just born. But most of the time, great salespeople just know what to say and when to say it. Right? So by focusing on these elements, by focusing on every single lead, is an opportunity that we can't let slip through the cracks. Knowing the numbers that I shared with you of just a 5% booking increase, what that'll do to your numbers, you could, you know, do that with your own numbers and see what that would do is tremendous. Right? So if you. If you've got a few different sales reps and each one of those sales reps, you know, maybe someone's booking it, and maybe your numbers are 50% or 60%, whatever it might be. Well, I can almost be certain that there's a fluctuation. If you've got a handful of moving consultants or sales reps, there's going to be someone that's at least 5% higher than somebody else, sometimes 10, sometimes 15%. So if that one person can do it, how can you model what they're doing with everybody else? Right? So it's like, Louis, where do I start with a script? Well, what's the person that's crushing it? What are they saying? Or what did you say when you were on the phone? Right. That's what I did when I was, you know, transitioning and starting to hire sales reps. I didn't say nobody could do it better than me. I'm going to keep booking the jobs because I would have never been able to remove myself from that position. Right. To get to a place where I had 60 reps on the phones booking jobs. All. All based on here, here, guys, here's what to say, because here's what works. So when they know what to say, and they know when to say it, and they're not afraid to overcome an objection. Not coming from a place of aggressive sales, Right? That's not what this is about. It's about educating the customer, taking them by the hand, showing them that your company is the company to go with, right? So booking percentage, focus on that, right? Just by putting your, you know, you've heard the saying, what, what you, you can't measure what, what, what you, you can't manage what you don't measure, right? So if you're not looking at the booking percentage, this is going to be, you know, it's not even going to be on your radar. So if you start looking at the booking percentage, see where you're at and look to set a goal to increase that by 5%. All right? See what that does. Because without new leads, right? And, and also, you know, when we work with clients, we don't want to go and spend money on marketing, just to pour it into a sales process where, you know, think about a bucket and you're putting all the, the marketing into the bucket to basically collect money. But there's holes in the bottom, right? So sealing up those holes is basically going in and sealing up that sales process. So that's, number one is the booking percentage. Work on getting that up. The second way that we're able to boost profits is the labor percentage, right? When we see companies that are having profit issues, meaning they're either not profitable or they're profitable below standard.

We look at some of the things where they're basically the ratios are out of whack, right? And so let's say their booking percentage is great, they got that up, but they're still not making money. Well, the labor percentage is the difference between what you're charging for the move and then what you're paying your movers, right? This is part of your cost of goods sold or your cost of servicing the move. Every single move that you do has a cost associated with it, right? You have other expenses in your business as well, like your rent and, you know, trucks and everything else. But the cost associated with the move, labor, which is one of your highest percentages, right. Is let's say it's around 30% for labor. So that means for $1,000 job, right off the bat, 300 is going out the door, right? But what happens when that thousand dollar job, 500 is going out the door for labor or even 400 is going out the door for labor. It doesn't leave enough of the pie to get to this place where you're able to get to 20% or even 15% for that matter. Right. So what do you do if you've got a labor percentage problem? Meaning what do you do when it feels like you're paying too much out to your movers? Well, what a lot of people will do is they'll look to cut back, the movers pay. And usually that's not the answer. And it usually ends in, you know, you've got disgruntled employees, you've got, you know, bad morale, and sometimes you get a mutiny on your hands because, you know, to take away something that you've already given somebody isn't the answer. And I understand the.

Man, the desire to do that. Right? The. The. We're not making money. What do we got to do? Let's cut cost here. This is one of our highest costs. Let's cut costs there. But there is another way to reduce the labor percentage, and that's by increasing what you charge for your moves. Now, I know this is a tough one. I know a lot of people, there's a lot of deeply held beliefs about the customer only cares about price, right? I used to think that too. Right? I used to. You know, I used to say, well, I've got no brand, right? I'm brand new. You know, I'm working out of a truck rental yard with two rental trucks, right? How. How could I charge more? I'm in a competitive market where there's people that are given low prices. Whether they honor them or they don't honor them, they're still giving the low price. So how could I actually charge more? And I felt like I needed to charge much less at the beginning in order to just get business. And then at some point, I realized that I didn't want to continue to bust my ass in this business and not make any money. Right? I didn't want to book moves for the sake of just booking moves. I didn't want to focus on just revenue and not profit at the end of the day. So in order to be able to raise your rates, that you also have to come in and strengthen the sales process as well, right? And it's all about selling value and service over price, you know? So now my belief is, when I used to think customers only cared about price, now my belief is customers only care about price. If I make it about price. Price. Right. Or if my clients make it about price, then they care about this, right? And you might say, louis, I've literally helped hundreds of people transform this and start getting paid what they're worth to be able to actually go. And I mean, look, this is a hard business to be in, right? And so you need to be able to make some money. And that fear of nobody's going to book with me is totally understandable. And it's true. If nothing else changes in your sales delivery or your sales process or your sales techniques. And so the idea is, you know, from your marketing to your scripts, you've got to weave in why your company is worth more, what's your unique value proposition, what are the things that you do that other companies don't? To where you could have the customer, the prospect, seeing what, why they should pay more. Look, if people only cared about price, there wouldn't be Mercedes on the road and Kia's on the road, right? There's a reason people are willing to pay more. And our job is to get them to see the difference in that, to get them to understand why. When you're comparing movers, it's not apples to apples, right? You can go and shop for a new TV and you could go to Best Buy and you could go to Walmart and you could get shop on Amazon and see who's got the cheapest TV and order that TV at the best price. But with movers, and this is really how you want to explain it to the customer, is with movers, it's not an apples to apples comparison. And what I mean is, in order for us to send you out, highly trained quality movers, they're going to come there and not only handle all your stuff with care, but have the skill set to be able to load it on the truck, bring it to your new home and set it up exactly where you want it without damaging everything. You know, we need to pay our movers a little bit more to do that, right? So imagine you go with that cheaper company and imagine they come out and they make the whole process more stressful. Imagine they damage things. And I'm not saying that's going to happen, but there's a reason we pay more for our crews and there's a reason that we charge more. And it's because we deliver a quality service, right? Check out our reviews, the whole thing. And that helps the customer make sense of it, right? Because otherwise sometimes they're just, you know, I get it, right? You say customers only care about price. And if they call in and all of a sudden they're like, what's your rates? And you're like, oh, these are our rates. And they're just writing your rates down and looking at them next to somebody else's and I'm like, okay, thanks, I'll call you back. And nobody's taking the time to educate them on what they need to be looking for. And again, this isn't hardcore trying to close the deal right there. It's not about being aggressive. It's about being helpful. It's about understanding that we're the professionals. We do this every day as moving company owners. This is what we do. So when a customer comes in, think about if that customer was your grandmother or your mother's friend or somebody that you really wanted to look after, and they said to you, wow, your price is high, you would have no hesitation to look out for them and explain the difference, right? You know, explain why they need to pay more. Not because you just want to make more money, but because that's what it actually costs to run the business. So when we're able to charge more, we're actually able to either maintain what we're paying our movers, or even if you're struggling to find quality movers, be able to pay more. Right? And so the big thing here is to be able to charge more money, to be able to pay your movers well. It's going to take extra effort on the sales end, right? And this is the stuff that, like, when times were good, I was like, ah, yeah. No. But what I realized is I realized I left so much money on the table for those first seven or eight years in business because I wasn't focused on these things, right? And what I believe is when we're on the hill, right, we're just, oh, this is great. We're making money maybe like 20, 20, 20, 21. And then, you know, when you're in the valley, that's the time to really dial things in and do the things that are a little uncomfortable, do the things that are a little extra work. So you build that strength and build that capability, and then when it comes back up, that's how you take the market share and really take over, right? That's how, you know, from the recession, we went from 9 to 10, 11 million, whatever it was, to $20 million because of the additional capabilities and the skills and the things that we built into the business that now strengthened all these weak areas. So use this as an opportunity to strengthen those weak areas. Right? If you've got some of them, this would be the time to do it. And the last one I want to share with you today is rpm or revenue per move. So when you think about what you're charging, this kind of goes back to what we just talked about, being able to charge more, right? That's going to, right off the bat, that's going to help increase your average move. That's going to increase your revenue per move. But there's other things that you could do as well. One of the areas that over and over and over again is in my locations originally and now in the hundreds of companies we work with, that boosts revenue, that then boosts profit is making sure that you get paid for every minute you're on that job. And I know this sounds obvious, but let me tell you how this works is when, and I'm sharing this from experience, right? It's when you send out a crew, if you let that crew clock themselves in and out. Let's say you're a local mover, you're an hourly rate. This could work too, for long distance as well. But let's say, let's use this as an example. And that crew gets to the job and it's, you know, they get there like 1:55, but by the time they pull the ramp out, by the time they go into the house, by the time they get the paperwork, you know, now it's a little past two and they're starting the time at 2:15 for the customer, right? Time should have been started at 2. They're starting at 2:15. Okay? No big deal. You think? Right. And then let's say on the end of the job now, the crew should be clocking out at, let's say, I don't know, five o'. Clock. Right? But they actually clock the customer out at 4:45. Okay? Whatever the number, whatever the time is, they clock the customer out 4:45. We used to go in 15 minute increments, right? So it was every 15 minutes is how we charge. Right? So I'm giving you this example. And.

Now you've got 30 minutes on that job that are uncollected right now. You might say, like Louis, why would they do that? My movers get paid by the hour. That's 15 minutes. We pay them the time that we collect for. So that's 30 minutes they wouldn't get paid for. Well, there's a few reasons. Number one, they're just not paying attention to it that closely because it doesn't seem like it really adds up. Right. And we'll do the math in a second, but it doesn't add up. Second one is they're working to get extra tips too, which is understandable. And they, you know, they say to the customer, hey listen, I'm Going to go ahead and, you know, I know we're, you know, going to be done here at 5:15, I'm going to go ahead and clock you out at 5 o', clock, all right? Just, you know, take care of us, take type of thing or. There were many times that we caught, and clients caught movers just straight up working off the clock, right? Hey, you know what? We're going to clock you out. And I know the rate's 150, just, you know, maybe give us, you know, 50 bucks an hour for the extra time that we work. So those three scenarios happen all the time, okay? And I say this because there's always people like, no, not me. It's not happening here. And then they're like, louis, you're right. We found this and we found that. So if you think about it, if you've got, you know, let's say you do $150 an hour, maybe a three man crew, 150, or maybe you got a two man crew at 150 and you're missing out a half hour on every job. That's $75 a job, right? Let's say you do 100 jobs a month, 7,500 bucks a month, right? So the idea here is clock your crews out from the office, right? Every time crew would, you know, get to a job, they'd call in and we'd have one clock that we'd work off in the office, right? And as time, you know, cell phones and everything started to have a standard time, we would use that. But there was one time that we clocked them in, they'd ask, we just got here, what's the start time? Give them the start time. Hey, we're going to be done in 10 minutes. What's the finish time? Finish time is this.

I personally, in my own offices in locations that where this fell off and we brought it back, it was equal in like an extra 20 grand a month. So wherever you're at, you know, if you're just getting started or you've got 20 locations, you dial this in, it's all going to start to rise up, right? So that's one way to raise your revenue per move is to get paid for every minute you're on the job. Then you could also be selling packing, right? I know you probably know this and you probably sell some packing as well. But what we did is I took a look at what we were, what our average packing per move was, right? Ppm packing per move. And I said, okay, how can we. Let's let's set a goal to raise this by $50 per move, right? And so, you know, you're making sure that when you go out there now, of course, your customer needs to be explained everything in advance, right? Here's what we're going to move. Here's what must be packed. But then you get out there and, you know, the pictures aren't packed. You know, there's tabletops that need, you know, mirror packs or whatever the case might be, right? This isn't go out there and put pillows in a dish pack. It's not what this is about. This is about legitimately trying to help them secure their items that you told them in advance needed to be secured. But when you get there, they're not secured. And so if you're able to. And you could also do this over the phone while you're doing your confirmation call, right? Because so many times customers will think that they're going to do their own packing, right? They'll say that when they book their job. And we used to call them a week in advance to do a packing checkup. How's the packing going? Right? And by doing that, you know, a week out, they're like, oh, shit, the move's coming up. Like, we're not packed, right? We thought we were going to do it. But they're so overwhelmed that you're able to say, well, you know, we offer some packing, right? So there's a few ways to go about it. The point is, if you got, again, 100 jobs a month, I'm just, you might have 500, you might have five, whatever your number is. If you said, okay, let's increase that by $50 a job. On 100 jobs, that's another 5,000amonth, right? So on 100 jobs a month, you're talking.

You know, between that and the money you weren't collecting on. And maybe you are right. These are some tips to boost profits. The.

$50 for the packing, and then you've got the other money for collecting every hour that you work for. That's 12,500amonth right there, right? What else you've got, you know, upsells on moving insurance. You've got upsells on valuation, right? You got upsells on storage. There's so much that you could be doing for every move to boost that RPM. And the reason I'm sharing these metrics, these KPIs, really booking percentage, labor percentage, and RPM are if you start focusing on those numbers, determine what your baseline is. Like, where are you now? Right? And Then look to incrementally make small improvements. I wasn't talking big numbers. 5%, you know, increase in booking percentage, right? You're talking $50amove and packing, which, you know, that's a few boxes, right? It's not a lot. These are the things that will start to help you be able to increase profits even. Even if jobs aren't coming in the way that they were before, right? So imagine you're able to now at the same time when everybody else is going, hey, the market's slow and they're kind of sitting back, I don't know what to do. And you come in here like, you know what? Let me build this strength, let me build this capability, right? Let me plug up these holes that you know and you listen, you might know all this already and hopefully this serves as a good reminder for you to kind of take action and go after this stuff. But when you build that up, you plug those holes and then all of a sudden the market starts booming again and the moves start coming in again and possibly some of the other companies that weren't doing some of this stuff aren't even there anymore. Now you gain market share, but not only do you gain market share, you're now more profitable as well. So I hope this serves you right now. I hope this helps you get through this time. I hope you enjoyed this video. My name is Luis Massaro. I'm founder and CEO of Moving Mastery. If you enjoyed this, please subscribe, please follow and if you know somebody that would benefit from this video, whether it's somebody on your team or moving company owner, you know, please share this with them. And until I see you next time, go out there every single day. Profit in your business, thrive in your life. Take care. I'll see you later.

Alright, my friend. What'd you think of that episode? Did you learn something new? Did it spark some ideas that you can implement in your business right away? Did it get the wheels turning? Did you love it? If so, do me a favor, share this episode. Somewhere out there on social media where you know there's some people that'll get value from it. Make sure you hashtag the Moving Mastery podcast so that we'll be able to look you up and find you on Instagram. Sometimes we just randomly pick a few people and send them gifts like free training T shirts, hats, swag, tickets to our three day seminars. So make sure you let us know you're listening and share what you thought about this episode out there on social media. Thank you so much for joining us. On the Moving Mastery Podcast and being a part of this amazing community. And until we talk next time, go out there every single day. Profit in your business and thrive in your life. I'll talk to you soon, my friend.