Systems That Scale by CEO929.com

Roofing Contractor Pricing: Value-Based Wins | Systems That Scale

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Most roofing contractors price their jobs based on cost plus a standard markup. That's a race to the bottom. I've coached roofing companies that have transformed their profitability by shifting to a value-based model, often adding 20-30% to their margins on the same jobs. It's not about being the cheapest; it's about being the smartest.🎧 Listen to more episodes at ceo929.com/systems-that-scale📊 Apply for your free Revenue Audit: ceo929.com/audit
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Welcome to Systems That Scale, the podcast from CEO 929. Each week, we break down the frameworks, automations, and revenue systems that help service businesses scale without the chaos. I'm your host, and today we're diving into how roofing contractors can move beyond cost plus pricing to unlock massive profits and build a truly resilient business. Let's get into it. Walk into almost any roofing company, and you'll find they price their jobs largely based on materials plus labor, then tack on a standard percentage. It's the old cost plus model. Now, while it feels safe, it's actually killing your profits and stifling your growth. Sound familiar? Antoine Campbell has sat with too many roofing business owners making$80,000 to$100,000 a month, who felt like they were constantly chasing their tail, working late, and barely breaking even. They were doing good work, but their pricing model was fundamentally flawed. The thing about Cost Plus is that it treats every job, every client, and every problem as identical. A simple patch job on a suburban home gets the same pricing philosophy as an emergency re-roof for a commercial property after a hailstorm. That's just plain wrong. You're leaving significant money on the table because you're not accounting for the perceived value, the urgency, the complexity, or the unique benefits you provide beyond just slapping shingles on a roof. Your competitors are doing the same thing, which means the only way to win is to cut your prices and then everyone loses. The CEO 929 team consistently sees that most owners think they have a sales problem, when in fact, they have a pricing problem masked by poor sales numbers. Antoine Campbell often says, if you're still relying on a spreadsheet that just calculates square footage and material costs, you're essentially telling your clients your service is interchangeable with the next guys, and that's a dangerous game to play in the roofing industry. When you sell a roofing job, what are you actually selling? Most contractors would say a new roof or roof repair. But that's thinking like a technician, not a CEO. Antoine helps clients understand they're selling peace of mind, protection from the elements, increased property value, curb appeal, and energy efficiency. For a commercial client, you're selling uninterrupted operations, asset protection, and compliance. That's a completely different proposition, and it deserves a completely different pricing model. Let's break this down. Think about a homeowner who's just discovered a leak in their attic during a heavy rainstorm. They aren't just buying labor and materials, they're buying urgency, preventing thousands of dollars in interior damage and avoiding a much larger headache down the road. The true value to them in that moment is immensely higher than someone planning a cosmetic roof replacement months in advance. Your pricing structure needs to reflect that spectrum of value, urgency, and specific client needs. For example, Antoine advised a client in Florida after a hurricane, every roofing contractor was slammed. The client's initial instinct was to just slightly increase their standard pricing due to demand. Instead, the CEO 929 team developed a tiered emergency service package. The base tier was slightly above market rate, but the premium tier included immediate tarping, expedited material acquisition, a dedicated project manager, and a guaranteed start date within 72 hours. They closed 60% of their emergency leads on the premium tier, often at 20-30% higher margins than their competitors, because they were selling solutions to acute pain, not just a service. What the data shows is that value-based pricing isn't about pulling numbers out of thin air. It requires a structured approach. First, you need to segment your market. Are you serving residential homeowners, commercial property managers, or both? Within those segments, what are the different levels of urgency, complexity, and desired outcomes? Next, identify the unique value propositions for each segment. What makes your company different? Is it your unblemished safety record, your extended warranty, your crew's specific certifications? These differentiators are not just marketing points, they are pricing levers. The CEO 929 team encourages contractors to consider developing tiered service packages. Instead of one re-roof price, offer a standard, premium, and elite package. This allows the customer to choose the level of value that best fits their needs and budget, giving them a sense of control and often leading them to select a higher value option. It's rooted in behavioral economics. Customers are more likely to upgrade when presented with a clear value ladder. Quick reminder: if you're getting value from this episode, you can apply for a free revenue system audit at CEO929.com Audit. The CEO929 team will analyze your business and show you exactly where you're leaving money on the table. Now, back to the episode. Here's what you can do today to start implementing value-based pricing in your roofing business. 1. Audit your current pricing. Gather data from your last 50-100 jobs. Quantify material, labor, overhead, profit margins, and the specific type of job. This helps identify where you're underpricing. 2. Segment your market and define value. Clearly define your different customer segments, e.g., residential, commercial, emergency, preventative, and for each, list the unique benefits and values you provide. 3. Develop tiered packages. For your most common service, create at least three distinct packages. Standard, premium, and elite. Clearly outline the features, benefits, and value proposition for each. 4. Train your sales team. Equip your sales team with the language and questions needed to uncover client pain points and confidently articulate the value of each tier, not just the cost. 5. Implement SOPs for pricing. Document clear standard operating procedures for how your sales team qualifies, leads, presents tiered offers, and handles price objections, ensuring consistency and maximizing profit. That's a wrap on this episode of Systems That Scale. For more insights on building predictable revenue, visit CEO929.com os blog. And, when you're ready to install real systems in your business, apply for your free audit at ce0929.com. Until next time, keep building those systems.