Profit & Grit with Tyler

Most Contractors Price Themselves Broke Without Realizing It - Danielle Putnam

• Tyler Martin • Episode 36

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Most contractors think they have a sales problem. Danielle Putnam knows it’s usually a pricing problem. As the CEO of The New Flat Rate, Danielle has helped service companies across the U.S., Canada, and Australia add billions in revenue by turning guesswork into systems that sell for you.

She grew up in the trades, handing out flyers for her dad’s company at seven years old, and later built a business that changed how contractors price, present, and profit. Her five-option menu system replaces pressure with psychology, helping technicians sell more without ever “selling.”

In this episode, Danielle breaks down why most pricing models quietly kill profit, how to fix your billable hour, and what happens when you finally charge what your work is worth. She also shares lessons from running a family business, introducing EOS, and turning chaos into confidence through structure and accountability.

It’s a candid look at how clear pricing creates predictable profit—and why confidence in your numbers is the real competitive edge.

What You Will Learn in This Episode

• Why most contractors price themselves broke without realizing it
 • How the five-option menu system increases close rates and ticket size
 • The psychology behind why customers buy the middle option
 • How to fix your billable hour and stop bleeding margin
 • Why technicians don’t hate selling—they hate pressure
 • How to align pricing with process for predictable profit
 • The EOS tools Danielle used to fix communication and accountability
 • How to turn a family business into a scalable, transferable company
 • Why clarity in pricing is the foundation for confidence and growth

More From Profit & Grit

Book your complimentary Financial Insight Session with Tyler Martin, fractional CFO for home services and the trades, here:

http://cfointrocall.com

Learn more at http://cfomadeeasy.com

Follow the show for weekly interviews with HVAC, plumbing, and home service owners and experts who share what it really takes to grow, scale, and profit in the trades.

If you listen to any of the following shows, we’re sure you’ll love ours too!
 To The Point Home Services Podcast, Toolbox for the Trades, Masters of Home Service, Home Service Business Coach With David Moerman, BlueCollar.CEO, The Home Service Expert Podcast, Next Level Pros, Blue Collar Business Podcast, Home Service Millionaire with Mike Andes, The Contractor Fight with Tom Reber, and Blue Collar Success Group

🎙️ Profit & Grit by Tyler Martin
Real stories. Real strategy. Real results for service-based business owners.

🔗 Website: ProfitAndGrit.com
📍 LinkedIn: linkedin.com/in/thinktyler
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Tyler Martin, a fractional CFO for home services and the trades

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SPEAKER_02:

I started in the trade that's seven years old, passing out flyers. And today our pricing system has helped contractors add over$2 billion of additional revenue into their businesses.

SPEAKER_00:

Welcome to Profit and Grit with Tyler, where blue collar owners and insiders spill the real story behind their hustle, building businesses that thrive through sweat and smarts. We'll dig into their journeys from scaling chaos to growing the bottom line with lessons and grit that pay off big. Here's your host, the blue collar CFO, Tyler Martin.

SPEAKER_01:

Today we're talking with someone who's changing how contractors sell without feeling like salespeople. Danielle Putnam is the CEO of the New Flat Rate. This is a pricing system used by service companies across the US, Canada, and Australia that's helped contractors add billions of dollars in revenue to their businesses. She grew up in the trades, passing out flyers for her dad's business at seven years old, and eventually built a company that makes pricing simple, scalable, and profitable. In this episode, we dig into the psychology behind the five-option pricing, how to fix your billable hour rate, and why most technicians don't hate selling, they just hate the pressure. This episode is about turning chaos into consistency, building systems that sell for you, and proving that profit doesn't come from working harder, it comes from pricing smarter. Let's talk with Danielle now. Hey Danielle, welcome to the Profit and Grit Show. How are you today?

SPEAKER_02:

Tyler, I'm awesome. Thank you. Thanks for having me. I'm excited to be here.

SPEAKER_01:

Yeah, I'm excited to have you. I loved how when we started, it makes me want to do this in the future. I think whenever people come into my Zooms from now on, they're gonna come into music.

SPEAKER_02:

Well, for those who don't know, Tyler invites me on this show and I shared my music. I was like, let's jam out to my stuff.

SPEAKER_01:

Clearly, I need to fire people up. I you I you just you just showed me how that can fire me up, even. So that was awesome. So I want to learn about you. Let's start first. Tell me a little bit about what you do professionally. Just touch on it just so we can understand what you're about. And then I want to learn something about you personally. Maybe, maybe even the tidbit people don't commonly know about you.

SPEAKER_02:

Cool. Well, today, Tyler, I'm the CEO of the New Flat Rate. We are a software company, but we're also a best practices and a, I guess we say process development company because we work with business owners to help them to work on actually the sales process by using a system and software. So I run the daily operations and growth and strategy. We could talk about all day long the hardships, the fun, the good, the bad, the ugly, all those things that come with that. Uh, I I love it though. As a child, I always wanted to be an entrepreneur. And I feel like, you know, sometimes I question am I doing a good job, a bad job? I don't know, but I'm doing what I wanted to do. So I'll take that win. And then uh personally, I mean, I have some awesome kids that everybody knows that because I flash them all over the place. So I'm an adrenaline junkie, and in this season of life, I don't really get to do that very much. So this weekend for date night, my husband's like, Hey, did you want to go to McKay's bookstore? And I was like, Hey, did you want to go jet skiing? And so uh I think that you know, what people don't really know is that I am a wife and a mother, and that comes first, right? And I'm a business owner and I love what I do. But I think ahead and I'm like, okay, on the calendar, I've got a trade show expo coming up in six months. Nobody else is going at the theme. I can sneak away and get on that jet ski or sneak away and go do something crazy.

SPEAKER_01:

Well, I felt like there was a hook there. Did you do the bookstore? Did you do the jet ski?

SPEAKER_02:

He wins. He always wins. It's the bookstores. Oh, wow. Yeah, we're so separated here. Do we have to be wild and crazy all the time? I'm like, but I've been like taking care of kids and the dogs and the turtles and like, can't we go do something fun? So, but you know, that's not realistic, Tyler. We can't go do all that stuff every day. But what we can do, what I can do is right now I'm into running. And so we're gonna run our first marathon in December. My husband and I are both running it. And so we're yeah, well, thank you. It is because it was one of those things that I always said, please don't ever want to run a marathon. Please don't ever want to run a marathon. Like I never wanted to, and now all of a sudden, I'm loving the thrill of every day, the training. And what's your training plan? What are you doing today? What about this? What about that? What are you eating? What are you drinking? It's fun.

SPEAKER_01:

You've already done like a 20, because I I know I've read this off your LinkedIn. Haven't you already gone 20 miles in your preparation? In a week, not at one time. Oh, what's the farthest you've gone so far?

SPEAKER_02:

Yeah. Years ago, pre-kids, you know, when I was trying my first time, again, like this is like 15 years ago, I was up to like 15 miles. And then I got a foot injury and whatever. And here we are 15 years later. Right now, my farthest is eight miles. That's pretty good. So I'm getting up. That's pretty good. Well, I'm getting there, right? But it's it's a thing. Like you got to plan in advance. And so then two weeks ago, I was browsing Netflix as I was running early in the morning looking for a movie to listen to, and I fell and I hurt my kneecap. So I struggled for two weeks, and finally on Friday I went and got an X-ray. And she's like, You just need to stay off of it for two more weeks. The inflammation will go. Anyway, that's way too long of an intro.

SPEAKER_01:

I that's okay. That's a good one. I did a half marathon last year, and it took me three years to do it. Because the first two times I did it, I kept pulling a calf muscle. Oh, and I just, you know, I'd get halfway into it, and then my calf muscle would hurt, and I said, Oh, forget it, and I'd quit. And then last year I did it, and I will tell you, I have the utmost respect that you're uh taking the challenge on the the full marathon because half marathon was really challenging for me. Like I did it and I made it no problem, but man, I was fatigued. And I doubling that just makes me like my mind spin.

SPEAKER_02:

It sounds horrific. Like nobody should ever do it. I know.

SPEAKER_01:

Then you got these people doing ultra marathons and stuff. So hey, two each is own, right?

SPEAKER_02:

They are crazy.

SPEAKER_01:

Okay, I want to get into uh first section here. I want to learn about you. And and so when you when you started at a very young age, I think around seven years old, you were actually passing out flyers in Georgia and the Georgia Heat. And I think that kind of starts sometimes your entrepreneurial type roots. And I believe you also had a trades family. So I want to learn a little bit, maybe we can spend a couple of minutes here. Talk about that and just kind of your family growing up and how you envisioned someday being an entrepreneur. Was that something you always thought about, or it just uh kind of formed in the last, you know, when you started new flat rate pricing?

SPEAKER_02:

You know, Tyler, I think about it all the time. You know, they say that formative years are zero to eight or zero to twelve. And and birth order plays a role in there too. There was nine kids in our family. I was secondborn. So I feel like, you know, I was taking care of younger kids a lot, but I was secondborn, but firstborn girl. So then you got all these things going on. At seven, my dad had been working at an industrial electrical company, and my mom kept encouraging him, saying, Hey, Rodney, if you start your own business, the kids and I will help you. And so that summer, you know, that I talk about the AC was out in the station wagon, and so it was very hot, and we're all sitting in the back of the station wagon driving door to door and passing out flyers. And I remember kind of the fear of rejection, walking in, you know, passing out a flyer. What if they say no? But I'm seven, what are they gonna say? Right. And so, you know, I I think, yeah, a lot of the, hey, if you want something in life, you have to do something about it, probably did come out of those years because my dad wanted a business and we experienced being a part of that, the doing something with him. And then when I was 12, I used to ride my bike through the neighborhood to Mrs. Richardson's house, and I cleaned her house for her every Saturday until I was 18. So all my friends are doing other things on Saturday mornings when they're, you know, older, 16, 17, 18. But I was still going to Miss Richardson's, cleaning her house for$5 an hour, even when I was 18. And I was over there for four hours. So I got$20,$20 a week at Miss Richardson's house. And every Friday I would call her, be like, hey, you know, Miss Richardson, do you want me tomorrow? And she said, you know, Danielle, just automatically come every week and call me Doc. My name's not Miss Richardson. It's Doc. And I was like, no, no. So every Friday, hey, Miss Richardson, do you want me tomorrow? So I confirmed the job every single week from 12 years old to 18 years old. And then I went and I did that and I got, but that because Tyler, I wanted that guaranteed income and I wanted to grow my savings. I wanted things. I wanted, right? And so I don't know that I can pinpoint because even looking at my own kids, I'm like, all right, you have to work to get what you want. And then we have to work to eat. Like you try to instill things in them, but some of them automatically are like, somebody's gonna buy my meal. I don't have to work, you know, but then the other ones work harder. Like, I do think some of it's in our DNA and natural. I want to say that there is some. You know, some of it's upbringing, but some of it is who you are. And from an early age, I wanted to build things. I wanted to be an entrepreneur.

SPEAKER_01:

So did your dad have a trades business? Is that in were you did you get involved in that anyway, other than like flyers and stuff, or were you actually going out on job sites with them? Like how involved? Sounds like you you've always kind of had a pretty tight family nucleus among you where you guys all kind of think of each other in terms of your businesses and stuff.

SPEAKER_02:

Yeah. We so in um when I was in high school, I was homeschooled because I, you know, I tried to go to public school and I was like, now we're sitting here all day long in class. And so if I was homeschooled, then I could be sitting in the office all day long. And I did school at night because at this time he he we started the he started the electrical service business, but then he had bought an HVAC and a plumbing business. And so we were in all three when I was in high school. So I worked in the office and then of course ran parts and was constantly going between jobs and doing parts and working in the warehouse with the inventory. What I loved about it, and I bragged about this, Tyler, is that I was able to see so many aspects of business that my peers didn't get to see, right? And so, you know, yeah, you've got you've got your payables and your receivables, and you've got your inventory, and you know, just the hiring, the firing, the scheduling, the customer service, the hey, the phone's not ringing today. What are we gonna do about it? We have to do something. So your grit, you know, I love profit and grit. Grit comes in of, yeah, nothing's happening in business today. We have to make it happen. And at some point down the line, it'll be rolling on its own. You don't have to do so much grit to get to that profit. So I was involved in the business, and we are. I like that you actually pick up on that. My siblings and I are all very uh connected in each other's businesses. And, you know, we've got some of us have some properties together, and then um, some of us are, you know, just constantly cheering each other on and referring, and it's fun.

SPEAKER_01:

That's cool. I know it's it's nice. I have a similar situation. I have two older sisters, and we all were raised in the same general area. I mean, we grew up, bought houses, all stay in the same area. So it we overlap a lot in things uh when we're doing stuff. So it's it's cool when you have when we're blessed. Fortunately, we're blessed. Not everybody has that that blessing to have my family all being close.

SPEAKER_02:

Mm-hmm. Yeah, it is. And there's some there's some that don't work with us, right? Everybody's like, oh, you guys have a family business? We're like, yeah, but like everybody doesn't automatically get to work in it.

SPEAKER_01:

Um, so now I want to kind of move into from going from that childhood to moving up to new flat rate. Like, what was your thought process on starting like a flat rate business? And it was that, did you learn that from your dad's business? Like where you said, hey, was he doing that? Or did you say he should have been? Maybe in your mind you were thinking, or where does this idea come from?

SPEAKER_02:

I wanted to be in fashion and design. I had so many sketchbooks filled with designs, you know, and then I would go and I would buy blue jeans from all the thrift stores and I would create these cool patches on them. And I was like, I'm gonna be a millionaire by selling these awesome blue jeans. So I was totally not thinking flat rate, right? But still thinking business. So I would try all kinds of things. I try, I wanted to sell to Frida Lay. Oh, good golly. I don't think I've ever told this story publicly like this. But my roommates and I, when I lived in California, I was constantly going to the Hispanic market, well, to the Mexican markets and to the stores and getting all these ingredients. And I was trying to make this certain kind of dip. Anyway, so it wasn't flat rate. Let me get back on point.

SPEAKER_01:

When I was I feel like there's a good story there, though, but okay.

SPEAKER_02:

Uh, every weekend we were trying. I was trying to make this tortilla soup dip. And I wanted, I like I had the I was gonna have the factory and everything. It was gonna be the best stuff in the world. So we every weekend I was like trying all these batches, and my girlfriends were like, nope, not quite there yet. Now you're getting closer constantly. So I didn't make it big into the into the chips and dip market.

SPEAKER_01:

So next thing.

SPEAKER_02:

Next thing, right? But then I was working at a software company, it was a startup, and Tyler, I just also still got to be involved in all the areas of the business, which I loved. But my dad, as a contractor, had been having great seasons in in business and terrible seasons in business, and it was very much fluctuating all the time. And so we'd talk about business and he he had the idea because all of a sudden, after years and years of of struggle trying to figure out how to make his business work better, they stumbled upon some peace and some profit. And that was with the power of the menu by pricing right. And so as he was telling me these stories, he's like, I want to tell more people, I want to help more other business owners, more contractors to be able to do this too. I said, Well, you should. You should do something about that. He's like, Yeah, we could start this company called Just One Look, or we could walk in their business on a Tuesday and put money in their bank by Friday. So I've got it behind this, I've got a coffee cup up there that says, you know, just one look. And I was like, Yeah, you should do that. He said, Well, I can't do it without you. And Tyler, I've been fortunate because, you know, there's some that are visionary and some that are operational, and then there's some that can do both, right? And so he was very much the visionary and I was the operator. And so because I had left and I was out on my own, had my own career going on, that when I moved back and I said, you know what, let's start this company together, there was a different level of respect. It wasn't, you know, just father and daughter of, oh yeah, right. It was very different. We came in as partners right away. And then my brother and sister, Melody and Matt, they joined us too and they came in. So together we were partners of, wait a minute, we've got something here that will actually help people. And to this day, that's one of our foundational core values is to help, because that's what we want to do. We're like, we found a way to be able to have a profitable company in the service business, and we want to share that with other people. And so once we just stumbled upon that, that was through the power of pricing. So then we kept building. It wasn't, I wish it was a childhood dream.

SPEAKER_01:

So was the vision, so it is the vision that the flat rate pricing for all trades industries is it mostly just HVAC? Like what's your like what's your vision in terms of how that that can apply?

SPEAKER_02:

We did, we did HVAC. We did HVAC, we had a price book for HVAC, and then they were knocking on the doors saying, hey, we have to have plumbing. This is working. Our service tickets are growing, our technicians are thrilled, we've got consistency. Like all of a sudden we've got money in the bank. This is working. We have to have plumbing. And Rodney, our dad's like, I don't know how to write a plumbing book for that. That's tough. And so my brother Matt and I were like, we're gonna figure out how to write this plumbing book. And so a couple months later, we come and we drop a big ol' boom, here you go. There's the plumbing book. And uh we've we figured it out, but by working with contractors, right? So we're working with master plumbers and we write this plumbing book, and then of course, it moved over into electrical, and then we had an electrical book. And so for the past 14 years, Tyler, we've been HVAC, electrical and plumbing, flat rate price books with the menu. And now, tomorrow, I know that this show is gonna air after that, but tomorrow uh we're launching a beta platform, a completely new software system that's gonna allow us to go into all verticals. And so I'm really excited. So, whether it's, you know, garage doors and roofing and windows and pest control and landscaping, hardscaping, I'm really excited and that's launching in beta tomorrow.

SPEAKER_01:

So when when we talk flat rate pricing, a lot of times the pushback will be, oh, you can't do that. There's too many variables, it won't work, especially in the trades. And let's just use HVAC in particular. That's the pushback you'll get, like nine out of 10 times. What's your thought when you hear that? Like, is is it just, or how do you simplify it so it is possible?

SPEAKER_02:

Yeah, Tyler, they're not wrong. What was so hard for us even in the beginning is how many parts and how many manufacturers. So how are you gonna? So all the flat rate price books were huge because you've got all these manufacturers, all these different kinds of parts, and then all, you know, all these, I mean it was unbelievable. And so we bundled and we did a menu. We said, all right, and we took the we took the the name brands out of it and the part names out of it. We said, All right, if we're at the kitchen sink, what is the best service we can do at the kitchen sink? The very best, and that's the top. And then, you know, we can change it and go down to we had five different price points for what we could do in a kitchen sink, no matter what brand, what kind of part, and things like that. So we took those out so that we could actually begin to clarify what we could do for the customer. And it took 14 years. So uh it was our our head of product says the other day, Danielle, do you know we have 73,000 menus? No, I didn't know that. 73,000. Oh, you don't say, but it did so that that was definitely that's a true objection. That was difficult. But we just over time we built them, we wrote them, we thought through. And now we've got the power of AI all over the place, Tyler. But it'll walk you right off a cliff if you don't watch out for it. And so we really had to use a lot of human thinking along with this too.

SPEAKER_01:

So this five option psychology, what what is the psychology behind it? Like, so there's, I'm assuming, a high, the very highest price point, and then there's a very low price point. Is that something about us as consumers uh that we like to see? Or take me through what the thinking is on that.

SPEAKER_02:

Yeah, absolutely. You know, you're probably very familiar, uh, along with everybody else listening, with good, better, best, right? If the term is good, better best. And so whether you're gonna buy a pair of shoes or a new drill or you're gonna have a service done in your home, uh, so often as service professionals, they're busy, they come in and out, hey Tyler, it's gonna cost X amount to fix it. They give you one price, and you're like, oh, rats, I guess I'm just gonna have to do it. That's the only choice that I've got, right? And so with the power of the menu, we can say, all right, Tyler, instead of just one price, it's here's here's your three options, right? Good, better, or best. The minute you start offering options, then your mind can expand in agreement with them of, oh, they're here helping me. I've got options. I'm not backed into a corner. Now, good, better, best, that's a start because the minute you offer more options, you can choose to buy more without any sales pressure. If there's only one price, that's all you got. But if they add two on top of that, you might want more. We went with five because uh statistics, data, economists, smarter people than me have proven that the mind automatically removes two options. So when you have three options, good, better, best, the mind's gonna remove two. If I can do that, gonna remove two, and then you just got one. So you're kind of backed into that corner again, right? But if you have five and the mind removes two, then you still have three and you still have a middle. And humans like the safety zone of the middle. 80% of humans buy in the middle. And since we know that they're gonna do that, let's give them that landing place, right? They want something a little bit above the low option. Now, I do think and love having lost leaders or very affordable basic bottom options that get you in the door, very competitive in your marketplace. Absolutely. But don't leave it there because people do want to do more with you. They want a better service. They want, you know, whether it's a brand or a part or something else that's in the home, we got to give those options so they can buy more. So the psychology is that when given choices, people will 80% of the time move themselves up to a higher option. And you want that as a business owner. You want that.

SPEAKER_01:

Sure. And then is the top pricing, is that more of like an anchor in terms of how we're pricing it, or is that truly like a competitive premium pricing? Like, are we, when I say anchor, like we're it's you know, two or three times higher than what anyone would pay just because it makes the middle one look that much more attractive, or is it a true like premium pricing?

SPEAKER_02:

Yeah, that's a good question. Um, sometimes it's three times the bottom price. I mean, it depends on you know the market and the and the product and the different things. But the the secret, yeah, and we have so much data and and we've tested and tested and tested in every state all over the US, Canada, and Australia, is that the spread can't be too great. Okay, it's gotta be enough to where psychologically they possibly could move up. So you don't really want the top option to be like knocked out of the park so that yeah, now that that middle one looks affordable. No, we want them to actually be able to reach it if that's what they want. And so it's gotta be just a nice, even step. And that's how humans and minds can kind of choose the level that they want. And we've tested it all over the place, and that's where it performs the best. What we found how your pricing, if you want to start practicing with your pricing, is that if people and it's data, right? Math tells us all kinds of things. If your customers are always only choosing your bottom option, or if they're always only choosing your top option, that's not where you want to be. If they're choosing your bottom option only, the top options probably are too expensive. And so you're gonna want to play with that. If they're always choosing the top, well then the bottom's too cheap. So the numbers will tell Yeah, that makes a lot of sense.

SPEAKER_01:

Since we know 80% of the time people are gonna pick the middle, is that the sweet spot in terms of our profitability too?

SPEAKER_02:

Mm-hmm. It is. Now, depending on how you want to build your pricing, right? Your top option might have a longer warranty. It might have things like that. With our top options, we have a return visit. And so that that is gonna be cost. You're gonna be rolling that truck again, going back out there to your check and making sure everything is in as great of a condition as it is today when we leave. And so that middle option is more profitable because you don't have as long of a warranty. You're not doing that return visit. Yes.

SPEAKER_01:

Okay. And then one of the pushbacks that I've heard on flat rate pricing is owners will say, Well, that means I'm gonna lose money sometimes because prices change and things change. And if I'm gonna be a flat rate, sometimes it's just I'm gonna lose money on some project. Do I just have to accept that? What's your thoughts when you hear that?

SPEAKER_02:

So they you know, they they don't have to. They could, yes. So let's say you got a flat rate and all of a sudden, you know, this has happened many times, all of a sudden the prices of things go up and oh, you haven't printed your book or you haven't hit update on your app, right? You didn't have those. So in our system, we have levels. So you can use a level one, level two, level three. And so if prices change overnight, just use a level two page and all of a sudden everything's adjusted, right? But if you don't have that, if you don't have a system that accounts for that, I would go back instead and I would say, but what about all the jobs that you're not pricing enough on? Right? Like you're already losing money in other areas because you're under you're undercharging or you wouldn't even be thinking about it or listening to this call today. And so I believe that people are questioning their prices. Am I priced right? No, probably not. If you're questioning it. So the flip of that is all right, you think that you're gonna not go to a flat rate or a set price or increase your prices because, well, something might change. Things change all the time. And you need to be testing your pricing all the time. You need to be changing your pricing all the time, you need to update your pricing all the time. Yeah, it's living and breathing. Like it's not a one-time done, it's all the time.

SPEAKER_01:

Yeah. That's kind of my response too. You said it more, more uh clearly than I probably will. But I'm just like, hey, if you take a hundred jobs and you lose a small amount on one, but if it means 99 times you're getting the ideal sweet spot in terms of your pricing, and oh, by the way, you're spending a fraction of the time and you're closing more sales, it kind of becomes a no-brainer if you look at the big picture. But I am telling you, I just have talked with people and they it's their hang up. They're like, oh, that means my little PVC pipe went up by 10 cents, and I'm not gonna have that factored in. And it's like, yeah, unfortunately, it's gonna be a couple jobs that you might be off a little bit on your PVC pricing. Yes.

SPEAKER_02:

You know where we see people are missing out more though, is their billable hour isn't correct.

SPEAKER_01:

Yeah, that's a big one.

SPEAKER_02:

They've got their billable hour set so low, and well, you know, you're in finance world, right? So their billable hour is not adjusted accordingly. And so they're even if they move to flat rate today, like they're not usually priced enough. They don't have their their overhead and everything calculated in. And if they did, there'd be enough margin. That pipe goes up 10%. You've still got margin in there.

SPEAKER_01:

It's a huge one. You know, one of the first things I'll do with the client is a break-even analysis, and then, hey, where do you want to be at in terms of profit margin? And I'm telling you, their hourly billing rate is usually off by two or three hundred dollars an hour from what they think it is. And it just blows my mind. I had a guy just a couple of weeks ago say it was 200 bucks an hour. His son had calculated it. We went through the actual numbers and it was five, something like 550 an hour.

SPEAKER_02:

Yes, that's exactly what we see too. I know, right? And so then it's scary for people. Like, well, if I actually use the the accurate pricing, that's scary. It feels like too much. What if I'm gonna get pushback from my customers?

SPEAKER_01:

Yeah. So so in these five options, it sounds like you guys get pretty creative because you said like a trip coming back. Do you get pretty creative in terms of what these different packages, I'll call them, include? Like what are some variations that you commonly would see?

SPEAKER_02:

Mm-hmm. Yeah, like I mentioned. So somebody told me the other day, they're like, you should not use hamburgers, you should use hotels. Well, I haven't printed out a sheet with hotels on it. I have hamburgers.

SPEAKER_01:

So we're looking at a picture for the folks listening. You've got a picture of hamburgers and you're making me hungry, by the way.

SPEAKER_02:

Yeah, yeah. So I've got yeah, I'm glad that you said that for those that are just listening. But the top value here, let's say it's a Big Mac or whatever your favorite hamburger is. Our place here in town is called Willie's. And on Willie's, you know, you're gonna eat on that hamburger for a week. But you have all of the things that you can put on a hamburger. You're gonna have all your condiments, you're gonna have, you know, double patties, you're gonna have your cheese, you're gonna have everything. Down at the bottom, it's just a basic hamburger. And so we are creative when we look at what we can do in the home, whether it's an air conditioner or you know, a ceiling fan. It's okay, I can replace the ceiling fan. We can go with a different product, a different brand manufacturer, you know, more premium. But then also, do you want a remote? And then let's uh all the wiring. Do we need to upgrade all the wiring that's connected with the ceiling fan? And so we're still thinking about one area. I'm looking up because there's a ceiling fan above me right now, but we're focused on what is the very best? So we ask craftsmen, we ask these technicians, what's the very best that you could do for this ceiling fan? And they actually have great ideas. They're like, oh, well, I can do this, this, and this, and then I can actually repaint the ceiling around it and this and this and this too, and I'll sweep and mop the floor underneath. That's added value and you should be paid for that, get paid for what you're worth, right? The customer doesn't want to come home and have the dust all on the floor. And I mean, I can't stand it when we get electrical work done in the house and there's fingerprints all over the ceiling. Like, what am I gonna get that down? Right. But when they leave a beautiful workspace afterwards, and the customer can be like, oh my gosh, look what happened today. You can charge for that. And even those things are built into that top option. It's all the added wow factor, all the way down to just, oh, you just want me to swap that out and leave? You got it.

SPEAKER_01:

What do you do for folks that are skeptical about going to a flat rate pricing? Like, do you have a certain way that you encourage them, allow them to test it, or get them to be open-minded about it? Any any particular process that you follow when they're skeptical?

SPEAKER_02:

You know, that's a good question. I wonder what our sales team does about that. You know, I don't know. You know, but when when talking to business centers, it's well, that's what's the pain? What's the real pain?

SPEAKER_01:

Yeah.

SPEAKER_02:

What's really keeping you up at night? A question that I know that we ask a lot is do you believe that anybody on your team could be leaving money on the table? And everybody emphatically says, yes, we leave money on the table all the time, right? And and that's in every business. We all know that. Yes, there's, you know, we've got efficiency loss. Yes, we could we could be lose losing money in different areas. Well, are you ready to do something about it or are you not? So, you know, we we work best with companies that don't want to just kick kick the tires. They're really ready to actually change and they're ready to commit.

SPEAKER_01:

Yeah. What a great way to open a discussion though. Do you think you're leaving money on the table? Because who doesn't uh in business feel like you know we could always be doing something a little better, bidding a little higher, closing more jobs? That's a great, great opening segue to start a conversation.

SPEAKER_02:

Yeah, we could even be following up more.

unknown:

Yeah.

SPEAKER_02:

Yeah. So so that is one way.

SPEAKER_01:

So I want to talk a little bit about uh technicians and how that relates to this flat rate pricing. A lot of times you know, we get a little weird about technicians selling. How does this flat rate pi pricing fall into that?

SPEAKER_02:

You know, we would love it if every technician was duplicatable, the superstars, the ones that that are great salesmen and great with customer service. And there are some wonderful ones out there. But for those that aren't, that maybe that's not their sweet spot. Maybe they don't like talking to the customers as much. They like to fix things. And right now we've got a whole lot more of diversity of language, right? So some of them can't talk to the customers so much. And so we've got to help with a system, the system that does the a piece of that, the process. And so for us, it's that's the piece that we play in this, is or the part that we play in this, I should say, is the the pricing. So I don't want to go too long on my answer. Can you rephrase the question again?

SPEAKER_01:

Yeah, no problem. You you answered it actually perfectly. I want to there's a subset to that question though. After like you've implemented a flat rate pricing scenario, what have you heard technicians say? Have they said, hey, this is like life changing, it makes my process so much easier? Like what are some What's some feedback you've received?

SPEAKER_02:

When they start to get performance pay and these bonuses that they've never seen before or never thought possible, the text messages that we get back of you changed my life. And so it's called our member experience team. They're downstairs here in the office. It's their tight-knit team. They're just like, guess what? And they're constantly showing their text messages to each other of look what so-and-so, you know, just said. Like, that's a big deal, Tyler. But these technicians are able to make more money than they thought possible just because they show a pricing system. A homeowner bought more and they didn't have to sell. They didn't have to have the stress or think. They just had to follow a process that was provided by their company. The company says, Hey, here's the process, just follow it. So they walk in, they greet the customer, they find the problem, they do the diagnosis, and they show some options. The customer chooses a higher level and then they get bonus based on the level that the customer chooses. When they choose those higher options, and the technician gets to do what they want to do. A great quality repair job. And then they're getting bonus for it. So it's such a win-win awesome scenario. They love it. Now, on the flip side of that, do we have technicians that are like, hey, I don't want to try anything new? All the time.

SPEAKER_01:

All the time, yeah.

SPEAKER_02:

All the time. And so we just ask for a champion in the truck. Who's going to try it first in the company?

SPEAKER_01:

So is the pay for performance, is that part of your methodology? Is that something you help when someone comes in and does flat rate pricing, they work with you? Do you also help them implement that pay for performance part of it?

SPEAKER_02:

We do. Tyler, as a business owner, I know you feel this and me too. Sometimes you know that there's an area of your business that you should put a process in place. So it could be a new compensation plan, it could be a new policy for your company or your team or whatever, right? And I feel the pressure of uh I need that time where I can focus to actually write out that process and build it, right? So what's exciting is we've already done that piece of it. So when we start working with these business owners, these contractors, here is the performance plan that we recommend that works really well with this. And so then we'll train them, we'll set it up for them, we'll help them implement it, roll it out to their technicians. And it is a piece of it. We do a lot of training and coaching. And some of that is implementing processes. Some of it is, you know, it could just be encouraging, like the they call them virtual ride-alongs. The technicians call our team, our tech support guys to say, hey, this is where I'm at. I'm out in the field, I'm on this call. This is what I'm looking at. What do you think I should do? And so our guys are able to say, Well, what were you thinking? And the techs are like, Well, you know, you know, X, Y, Z. That's a great. Why don't we do that? That sounds perfect. Let's do that, right? And so it's just somebody there with them. So we do a whole lot more than that than I even talk about. And and that is a differentiator that I love about the new flat rate is we're still such people people.

SPEAKER_01:

If if the technician can actually call you, it sounds like you're getting in on the ground level in terms of supporting the client. It's much more than just necessarily flat rate pricing. It's their whole process.

SPEAKER_02:

It is. Because you know, anybody can can have a price book, but to be able to have a system that your whole team follows with menus and options that customers can buy more, it's the automatic selling that's happening. And that's, you know, I encourage people that are thinking about their pricing and what changes should they make is what could they do so that their customers can ask those magic questions? So what processes or scripts can be put in place? Hey, instead of repairing today, how much for a replacement? Or, hey, you know, I saw that you had such and such. Can I try that? We want to help the customer to be able to buy more.

SPEAKER_01:

What do you see most commonly when you're working with the trades company, whether it be HVAC, electrical, or plumbing? What do you see the biggest mistake they're making as it relates to sales and growing their revenue? A lack of system, relying on a person to do it. Consistency, basically.

SPEAKER_02:

Well, and and relying on a person. You're saying, all right, so so today I've got Tyler and you're a superstar salesperson, but Tyler, you're not with me forever. And all of a sudden you're gone, and I don't have another Tyler. So now who's selling? Well, but when you have a system that anybody that sits in that seat can do, that's the secret sauce that keeps it going, is you got to have the system, not the not dependent on the person. And that's with any business, right? People run the processes, but you got to have the processes in place for them to follow and run.

SPEAKER_01:

What's a timeline if someone were to engage you? Like what's a timeline to go from, hey, I really have no infrastructure to now I have a process, I have flat rate pricing. What does that typically look like?

SPEAKER_02:

Within the first week, we've got you up and running on the software and the app. We've onboarded you, but we might take 30 days, depending on your team, to get your whole team up and going. We want to make sure that everybody's confident, that the mindset's ready, that uh, you know, they saw, hey, there's a one of the technicians tried it first. It was successful. All right, now we'll all we'll all try. We want to look at results. We want to look at the numbers, just like you, right? What were your numbers before? What are your numbers now? We want to be analyzing that with them along the way. So it could go anywhere from a week to 30 days.

SPEAKER_01:

Wow. Okay, that's a the very fair timeline. That's not too too far out. How does this integrate with like some of the packages that are that are out there, like Service Titan, we'll say job or maybe house call pro. Does this is this independent of them, or are you doing the price book in like a service Titan, but with a flat rate pricing methodology set up in it?

SPEAKER_02:

We have a full API with Service Titan and House Call Pro. We have soft integrations with the others. And so they can have you know copy and paste their information in there, have import files in there, or with the APIs, everything goes directly. So it is separate. The the FSMs write ours is kind of like the inventory, the task codes and all that that go in there, but they are separate softwares.

SPEAKER_01:

Oh, how cool. But it just feeds right into it. The data feeds right in. So it's no different than I mean, CHIRP comes to mind the way CHIRP kind of integrates as an outside package. Very cool. I like that. Last thing I want to talk about is just the whole family business angle of this. Sometimes, you know, a lot of uh trades businesses are family businesses, and you know, friction can happen within family businesses, people can be on different pages. How have you found running your own business? Your dad started out with it. What was that like being in the family business? Does that is that power in numbers, or is it sometimes it slows you down in your growth because people have different ideas in the family? What does that look like for you?

SPEAKER_02:

You know, Tyler, if I can be honest, I was in denial. Everybody was like, Oh, you're a family business. No, we're not. We just work together. And I was in denial for years. And because I was in denial for years, I didn't recognize the glass ceilings that we were putting on ourselves. Sure. Right? That there were certain things that you accepted because we were all family. And so it took me years to come to the reality of being honest and accepting we are a family business. That's not a bad thing. It just means we have to hold each other accountable differently. And we might need outside people to help hold us accountable. And so when my dad and I ran the company together, uh, it was very easy. It was very easy. We were best friends, you know, he had the idea, I was helping to implement, and he let me run a run a company. And I always wanted to do that. So it's very easy. As he began to phase out into retirement, my brother and sister and I became more of partners. And that's where it got difficult because we did have different visions. And so where we wanted to go, where we thought the company should be, our expectations were not in alignment. And so we avoided each other. There was years of, you know, we're friendly at Christmas and we might say hi to each other in meetings, but we really avoided and like we were siloed working on our own things. We weren't rowing in the same boat until two years ago with EOS. So if you're familiar with the entrepreneur operating system, EOS, when and we'd tried, Tyler. We'd looked at, we'd flown all over the US trying to find a way to operate the business in unison, you know. And then somebody, you know, somebody would go to a show and come back and be like, I got it. Let's try this. And then I'd go to a different show. And and so we were constantly conflicting about who had the best ideas. And so with EOS, I was like, nope, we're throwing every other strategy out. This is the one that we're going with. And we started, we had we got an implementer with us and we started having our meetings and getting in alignment. And it wasn't too long before I could say, wow, we actually are on the same team. Like we are supporting each other. We want the same things, we want to be working together and growing a business together, and we want it to be great for our team. And uh, it's really fun now. Uh, but it was it was painful. It was painful. So first I had to be honest that we are a family business and there are things that we're doing sloppy because of that that needed we needed to change. And then, hey, we need a way to be in unison again and we need a strategic vision and a plan. And so uh that's been really fun. Now I love working with siblings. And and our niece, our niece is working with us too, and she's just climbing. It's been so fun. I have another niece who has been here in the summers, and then sometimes nephews will be working on side projects and stuff. So I look forward to the days one of my daughters came to, well, a couple of my daughters have come to trade shows and worked the booths with us and stuff. Um, but we hold them to a standard, right? This is the way we do business. If you're gonna work here, you don't get freebies, you gotta earn it. And you start at the bottom and you climb your way up. So we could have learned a lot faster. I wish somebody would have slapped us around sooner and been like, you guys need to learn.

SPEAKER_01:

What do you think in EOS made it have you guys all come together? Was it the fat the fact that everybody was the right person in the right seat? Was it accountability, a little bit of everything? Was it looking at metrics every week, scorecards? What kind of brought you together? And that was it, the implementer was just so awesome in terms of bringing you together. Was there any one thing that stood out?

SPEAKER_02:

You know, in in the EOS world, there's a term called the elephant in the room. It probably got uh maybe it was the implementer that helped us start talking about all the elephants in the room. There were so many things we didn't talk about, and it forced those discussions. And uh Yeah, yeah. And once they're done, once you have those uncomfortable conversations, they're done.

SPEAKER_01:

Yeah.

SPEAKER_02:

And then everybody can just move forward and grow, and you realize how stupid to have been stumped on uncomfortable conversations that really weren't that big of a deal, or you're assuming, right? Yeah, and so I do think in in family businesses we assume too much, we don't communicate.

SPEAKER_01:

It's hard. I mean, family businesses. I mean, I know there's a lot of listeners out in the audience that are feeling this. It's hard sometimes. You've got your mom or your dad or whoever, and it's just, you know, sometimes that friction instantly pops up if you say the wrong thing because it is family. Yeah. It's just, I just literally had a call earlier today, and someone hired their niece into the business. They're way overpaying their niece, like 30% more than anyone else in the company, other than ownership, and um isn't really carrying their weight, this person. And it's it's a very delicate topic because it's family.

SPEAKER_02:

Yes, it is hard. And so once you start, you said, you know, the right people on in the bus, the right seats in the bus, once you start really working with that organizational chart, the accountability chart, all the time, saying, all right, we've got this person. Uh something that I like to encourage people to do is even looking at that family member and okay, they have to be valuable. So if this isn't the right seat, what can they do? And where where are the metrics showing what we're gonna hold them accountable for? Uh sometimes it's ownership's fault. We didn't clearly define this is what they're gonna be held accountable for, and here's who gets to see it, right? So the accountabilities have to be set.

SPEAKER_01:

Yeah, good, good stuff. I like that. Good feedback. Okay, talked about a lot of awesome stuff, talked about your early years in terms of how it framed you. Uh, we talked about the five option psychology. I love that, by the way. Just the thinking of we tend to take one out from each side and then end up in the middle. So that's very cool. We talked about just pricing in general and how the flat rate pricing could fit into a model, as well as the overall processes and systems. It's not just one little piece. It's kind of looking at the big picture of the whole deal. And then we talked about family businesses. So I think we covered a lot. Did I leave anything else out or anything else you want to talk about before we wrap up?

SPEAKER_02:

Yeah, I appreciate the time. I appreciate you know, you asking about pricing. Uh, I just want to encourage people to look at your pricing and think about what you could do differently, because you're the expert in your trade, whatever that is. And so, what more value could you add and could you get paid what you're worth? And and I also like to say, you know, let's make sure that we don't give everything away for free. I know a lot of us like to have pre-strategy calls or, you know, and we're helpful. And our industry's home services are so helpful.

SPEAKER_01:

Yeah.

SPEAKER_02:

But you deserve to get paid what you're worth. And so I just want to encourage you to take a look at what you're giving away to say, what would happen if you actually asked for payment for that? You'd be surprised that people would pay you.

SPEAKER_01:

Yeah, that's good advice. So your website, the newflatrate.com, once again, the newflatrate.com. You're on LinkedIn as Danielle Coop. So if people want to check you out on LinkedIn or talk with you, and then I'll put your Spotify. It's kind of got a little bit of a funky uh link to it. So it's kind of hard to say over uh the podcast, but I'll put the Spotify link for your podcast, the new flat rate, if people want to check that out. Anything I left out or where's the ideal place people should reach out to? Is it LinkedIn?

SPEAKER_02:

Yeah, please do. Add me on LinkedIn. We'd love to be friends, get to know you, and listen to our podcasts for sure on Spotify. But if you are interested in pricing or just a strategy session, then you go to our website to get a demo.

SPEAKER_01:

Thank you. Appreciate you being on the show. You are awesome to talk with.

SPEAKER_02:

Oh, Tyler, it's so great to hang out with you. Thank you for having me.

SPEAKER_01:

What a fun conversation with Danielle. What I enjoyed most out of that conversation is just coming away with the feeling that it's not just about pricing, it's about building systems that make your business predictable. That's what every owner wants. That's what we all want. We want consistency, confidence, and cash flow that doesn't depend on luck or long nights. That's also where a good CFO comes in. My job is to help business owners take the same kind of structure Danielle built for pricing and apply it to their finances. So every decision, every hire, every investment is backed by numbers, not guesswork. If you're ready to see what that looks like, go ahead and book an intro call either at cfomadeasy.com or cfointrocall.com. No pressure, no obligation. We just chat for about 20 minutes, see if potentially I can help you. And if I can, we can go from there. If I can't, probably refer you to some people that I think might be able to help for whatever you got going on. And last but not least, if you could do me a big favor, if you could leave, if you like this podcast and you could leave a review at wherever you get your podcast, that could be Spotify, Apple, uh, I would greatly appreciate it. And uh can't thank you enough for listening. And I hope you have a great rest of the week.

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Tyler Martin

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