Adam Sand argues roofing contractors should skip siding services because they kill profit margins and drain focus. He uses a contractor who collapsed during COVID and Apple Roofing, which charges negative commission on siding to discourage it, as proof that specialization beats sprawl.
Okay, looking back at last year, I'm convinced offering siding is a waste of our time. It takes 5 times longer to do the projects, requires more supervision, and I feel like it's a drain on us. My business partner thinks we should just charge more for it. Very good question. So the answer is yes. If it is more of a hassle to do, then yeah, you should be charging more money for it. What you don't want to do is have a business process or a business offering that's more difficult for you to fulfill, that costs you more in time and energy and money to fulfill it, And you're also the highest price in the market. So yeah, you should be charging more for it. Now, that being said, I like simple. Simple scales, fancy fails. Fun fact about Chick-fil-A. The average Chick-fil-A earns $11 million a year. The average McDonald's franchise earns $3.8 million a year. The average McDonald's earns an 18% net margin. The average Chick-fil-A owns a 30% net margin. And they're closed 14% of the year. Now there's 2 reasons for that. One, maybe Christ is on their side. I would like that story. More likely it's because they give better service and they have a very simple menu. You have grilled chicken or not grilled chicken, crispy chicken, I guess they call it. You got 5 things on the menu. Simple scales, fancy fails. The only RBP customer that has gone out of business on RBP's watch, there was a customer who was like, well, We want to do everything against our recommendation. They sold a bunch of siding. The COVID hit, siding was hard to get, so it was hard to get paid. But then they also did the air conditioning combing, they did the window screens, they did the windows, they did the metal wraps, they did the fascia, all the stuff. And then they were having $40,000 checks being held up over $38 worth of window screens or $100 to comb the air conditioning fins. And then the siding jobs that were late. And then you're right, needed more supervision. Stuff went wrong, customers complained. So now they're having to do the siding twice and they're still having this $40,000, $50,000 to $60,000 check held up. Insurance companies battling back and forth, supplementing. The business got too fancy and it failed. Now there's other things, you know, not necessarily managing money properly and whatnot. You have to ask yourself, are you the best place to buy siding in your market? Like, arguably. Can you make the argument that you are the best company to buy siding from? Can your salespeople present value in excess of price on James Hardie and your vinyl? And can they creatively design? Can they address all the weird little home building weirdness that goes on with siding? Are your siding crews the best siding crews in the city? It's not about being number one, but can you say feasibly top 3, top 5? If you can't see If you're in the top 3, top 5, well then you're probably putting yourself in that exact position where it's like it takes 5 times as long to make the money for 3 times as much money. It requires way more supervision, way more strategy on ordering. Your salespeople may take 3 times as much training. It's more complicated to order the material. It's completely different presentation for sales. It's a whole other vertical to advertise and marketing. And your name is Vista Roofing. So then you have to overcome the fact that someone else is called Johnny's Siding and your SEO doesn't optimize for it. So you have to do twice the SEO work unless you can charge the amount that you're making more money. You're probably fighting an uphill battle. Apple Roofing was a great story. I did some consulting for Apple Roofing twice now. Back when Dustin Bigler was there, we talked to him about siding and I remember he said something interesting in a video with Dimitri. He said, that's actually our last bit of siding that's in their warehouse. And so I asked him about that. I said, oh, why don't you guys like siding? And he said all the same things you did. And he said they actually charge a negative 2% commission on siding. So if you're a roofing sales rep and you get an insurance claim and you go out there and you got to sign the contingency and all that kind of stuff, and you want to kick the siding and give them the money, basically give them the money back, or, you know, cash that you're not taking. So you get a claim approved, it's $70,000, $20,000 for the roof, $50,000 for the siding. You kick the— you want to kick the siding. If If the sales rep can't kick the siding and they had to, like, the homeowner's like, nope, I want you to do it all. You are my guy. You have to do it all. I don't want to have to deal with 2 companies, like all that BS that homeowners do sometimes. If you couldn't overcome that objection, whatever the value of the siding was, they charged a negative 2%. So let's say they paid like 8% commission on the $20,000 roof. So times 0.08, that's $1,600. Now, $50,000 commission times 0.02 is $1,000. You would lose $1,000 on your commission. So you'd go from making $1,600 to $600. Pretty strong motivation. Sales reps figured it out. Refocus all of that money into roofing leads. You refocus all of your training into roofing sales training. You focus all your objection handling into roofing objection handling. You focus all that website development into roofing. And then you just dominate roofing. 'Cause then you can simplify your marketing. You're in a market that works great for it.
