SGI recently launched our own Podcast: The Successful Contractor. It is available to both members and the podcast-listening world through every major player, including Apple Podcasts, Google Podcasts, Stitcher, Spotify, and Pandora.
You can listen to our first podcast with Steve Egner of Steve’s Plumbing in the Seattle, Washington area or check it out in written format below. We talk about how COVID has impacted his business, and more so, how he and his wife Rachel are responding. SPOILER ALERT: They had a record March, despite being in the initial epicenter of the outbreak!
- For those who haven’t had the pleasure of meeting you or your lovely wife, Rachel, could you share with everyone the Reader’s Digest™ version of your story with SGI?
Sure. We were a sole proprietorship at the time. Rachel was admin, marketing, and childcare, and I was the sole plumber in the field. It got to the point where in 2006 at the age of 46 we realized we would continue to need more. The costs of our family alone were going to be more than I could earn. So, we explored PSI—we joined in 2006 and never looked back. I recall that the year we joined, our annual gross revenue was still under 200,000, and now, our monthly gross revenue is almost always over 200,000. So, in that period of time, we’ve changed from a one-truck operation to now a seven-truck operation, four apprentices, one warehouse person, two CSRs, and Rachel and me—13 employees, plus ourselves. And we owe the roadmap to our growth and success to SGI and PSI. So, we’re happy to encourage and assist those as we’ve been encouraged.
- Have any of your employees been directly impacted by the disease?
Not yet, not yet. We’re very fortunate. And we’re taking measures in that regard, of course, with our company. But I’ve encouraged every single one of my employees to embrace this in all seriousness to protect themselves, so not just on the job, but off the job. I’ve spoken to every one of them personally, but I’ve requested, “if any of you have any doubts about the seriousness, then I would like you to come share your perspective and your views with me, and I’ll share mine so that we can come to an understanding.”
If I had someone who wasn’t taking the threat seriously and wasn’t taking proper precautions at home, I would fire them. That would be the end of it. That would be a cultural difference that I could not allow and I could not tolerate because I firmly believe that it poses a threat and the attitude of that type of employee would pose a threat to the safety of everyone else in my company. Fortunately, among our small group, 13 plus Rachel and me, we don’t have any dissenters. We have people who are very serious about it, and fortunately, they’re all onboard. We’re all on the same page. I think that culturally, that’s really important.
- Once Coronavirus appeared in the Seattle area, did you have a company meeting to discuss it or was it more of a one-on-one conversation?
We’ve done both, but specifically, we have a culture of beginning every day with a team huddle. So, we’ve always required everyone to come into the shop. We’ve since changed that as precaution of the CDC recommendations. We dispatched all our people from home today. But in the beginning that was not the case. We were still meeting at the shop every day and discussing it as the news unfolded and how we would handle it. Subsequently, I’ve followed up in conversation with all our people, but everybody was pretty much on the same page. And not so much about the mechanics of taking precautions, but we were dealing with the rising hysteria.
Our revenue is dependent upon their sales, and with the rising hysteria, it became our mission to refocus the men every morning and adjust their attitude. I said to them, “Our first responsibility is to calm our customers, to peel them off the ceiling, get them into a relaxed frame of mind, establish rapport, earn trust, prove our professionalism, provide them options, and then close the sale.” That’s the process. We refocus our men every day. And we reiterate: “It begins here with me, but it goes through you as representatives of the company. If you are not calm, you won’t be able to calm a customer. And that’s essential to any transaction.”
We are focusing on moving our closing rates, and as a result of that adjustment, due to the public hysteria every day, our closing rates actually went up more than 10 percent across the board. So, they’re doing really well. We’re getting fewer calls. Our call volume is down over 50 percent. But with their closing rates, the men are actually keeping up. Now there are fewer opportunities—there’s no more than one or two opportunities for each of our men each day—but they’re embracing those opportunities and we’re focusing their mindset.
Last week we changed to Zoom™ meetings. We’ve just had everybody download the app, and now I can see everybody on my screen with Zoom™ from my kitchen in the morning, or if I conduct it at the office. We get across the same message and remind the men: You have to be the professional. You have to be the voice of reason. You have to be the presence of calm. And when they do that, I’m getting back from my guys: “Hey, I converted this repair into a tankless water heater.” “Hey, I’m going to be here the rest of the day.” Those are good calls to get from your techs.
- You mentioned precautions. What additional precautions are you taking?
Probably the biggest difference was with the cleaning products that we’re accustomed to. It was a big education for me. We’ve always used Simple Green™. Simple Green™ smells great, leaves the customer the signal that, “Hey, we cleaned the work area and we care.” What we found was Simple Green™ is a common cleanser and it’s not rated as a disinfectant. It’s virtually ineffective against the Coronavirus or any other virus or bacteria.
As quickly as possible, we scoured local sources, and we found that on a scale that we needed for our company, the quantities just weren’t available anywhere. Then we located a product on Amazon that’s rated against the Coronavirus—it’s viricidal and bactericidal. That’s probably the biggest change. We’ve never actually worked with a disinfectant before. But now, the men all have the bottles of disinfectants.
In addition, the men have shoe covers, Tyvek® suits when the customer calls for, or when the technician feels they’re necessary. They have gloves and respirators on every job. They’ve also got a bottle of disinfectant in their hands and they’re going to completely disinfect any fixtures they work on, any work areas in the bathroom, all surfaces before and after they’re done. So, the use of the product is different. Before, we just sprayed a few squirts of Simple Green™ on a cloth, wiped down a fixture and the floor. Well, that’s not good enough anymore. We’ve learned you’ve got to spray that stuff on the surface and keep it wet anywhere from 30 seconds to 10 minutes depending what the product rating is. So, for our exposure, I’m talking about legal exposure, I don’t know what that might be, but we are doing our dead-level best in all seriousness to prevent the spread of infection. And I do not want us ever to be the cause of bringing that into any customer’s home.
- How have you changed your phone scripting?
When people call in, we’re letting people know, we’re taking all universal precautions. Everything that the CDC has recommended we’re following. We’re arriving in mask and gloves. We disinfect our areas before and after. But we’re also following that information with a question: “Has anyone in your home experienced illness or is anyone showing symptoms of any illness at this time?”
As you know, we’re asking questions of customers who may or may not be entirely honest. But the fact is, they still need plumbing services. We had a customer for instance last week who called in and said, “I need this service for my water heater. I need this to work. But my daughter came home with the flu. It has not yet been determined whether or not it’s the Coronavirus. She’ll be in her room and the water heater is in the garage.”
We accepted that call, and I informed my technician who was assigned to that call: “You have a choice. One, you have a choice not to do that if you don’t want to. On the other hand, if you want to do the call, then I want you to go in with full precaution. Even if the water heater is in the garage, you’re wearing shoe covers, Tyvek® suit, rubber gloves, and respirator. Take care of that water-heater exchange, whatever it needs, and then get out of there.” My tech was happy, the client was happy, and hopefully the little girl recovers. We like happy endings for everybody. But that’s our process.
The fact is, as an employer, I can’t order my men into an unsafe situation. I do firmly believe that we are first responders—I’ve always felt that way about the trade for as long as I’ve practiced it, and I’ve extended that to my crew. But at the same time, there could be a situation where one of my men might determine, “Hey, this is not safe for my family.” And certainly, a single, 22-year-old living on his own has a different family situation than the guy with a pregnant wife and a three-year-old daughter. And so, we’ve got to cover all those bases and realize that keeping our employees safe is a priority. Keeping our clientele safe is a priority. And we’re adopting new measures literally day by day throughout this. We didn’t start out with all of these things—these are a cumulative effect of about three weeks of preparation.
- You mentioned call counts have been affected. You’ve been proactive on social media, communicating the extra precautions you’re taking. Could you share what you’ve done with everyone?
We knew that we had to do something. And my tendency in a situation like this, when I’m under pressure, is to find some action to take. And so, we decided the simplest thing that we could do was to put up brief videos explaining our perspective, explaining our precautions. We wanted customers to know we’re still in business. We’re still going to serve you. These are the precautions that we’re taking against the spread. So, we produced three videos in short just to let people know what those precautions are, demonstrate them, physically show them my men dressed in their protective gear, simply explaining that we’re sanitizing work areas before and after. And letting people know that we are an essential service. If their sewer is clogged, if their water service is interrupted, or their water heater fails, that can make the home anywhere from uncomfortable to unsafe to occupy. So, we are first responders, we are an essential service—just getting out those messages.
What’s incredible, Bob, is that what we’ve spent on those videos, those three videos. We boosted them with about $500. You can do that on Facebook™, exactly $500. Those videos were viewed over 7,000 times. Two of them were 30-second videos. One of them was a minute and a half video, and for $500, I got 7,000 complete play-throughs. And Facebook™ is wonderful with their details that they give you on the backend because it shows, hey, this video was played from front to back over 7,000 times. That comes out to seven-cents-per-viewing, per-client who watched our video. That’s so inexpensive. And hey, I look at them and I think they’re corny. I don’t like to listen to my voice. I don’t like to see me gesturing there, but people found those reassuring.
At the same time, I called our brand managers, Ray Seggern and Monica Ballard, and I said, “What can we do?” We have a radio presence—is it possible to react swiftly on this and get out a message about the Coronavirus and the precautions that we’re taking? Two days later, we’re down at the studio recording new spots. That’s what we’re advertising right now. No offers, no sales, no pressure, nothing at all except information on what Steve’s Plumbing is doing in light of Coronavirus to protect our clients. And that was inexpensive. We already had the radio budgeted in.
So, the only additional budget that we’ve added really is this $500 expense for Facebook™, and that’s an incredible value.
You can target demographic Facebook™, it takes a little work, but some people already have social-media managers that will do that for them. But it’s inexpensive. It’s very effective. We’ve actually had people call from the Facebook™ ads. We, I repeat, we’re not seeking new clients—we just want to reassure our base, one, we’re still here. We have a right to be here, and we are still here and serving. And we’re protecting you as much as we’re protecting our people.
- You mentioned your base. Are you doing much outbound calling to try and fill those gaps in your call schedule?
We’re a Diamond Club™ culture, a maintenance-agreement culture, and we always have been. We’ve got close to 1,400 members currently. This is our inspection season. We always schedule those for Tuesday, Wednesday, and Thursday first call—so for literally two and a half more months, I have the schedule full on those days with starting calls for all of my men. So that’s a blessing, right?
There’s no other way to put that. That’s just a fortunate result of the fact that we have a maintenance agreement, Diamond Club™ culture. If we didn’t have that, we’d be SOL, Bob. That’s the truth of it. So now, we’ve doubly emphasized to the men: These Diamond Club™ inspections that you’re going on are bonified opportunities.
In November and December, we mail out a coupon through Denise Schneider at Minuteman Press. It says it’s only good on the day of the inspection. So, when we go through and we make a list of recommendations and the person says, “Yeah, I think I’m going to hold off and wait ‘til my husband comes home. Or I’m going to hold off, and we’re going to do this in the spring.” We will explain, “I understand, but I have no choice but to put this $60 in my pocket, ma’am, because you’re not going to be able to use it tomorrow. I’ve given you six recommendations that you know need to be done. Why don’t we apply it toward one of them? And that way you get to keep the $60.” And so closing rates on Diamond Club™ inspections have gone higher than ordinary calls. The men are viewing them as opportunities. And so, they’re following through and that’s really been a lifesaver for us.
Everybody gets to start that out with a friendly face we’ve done business with before. We’ve got a work history. We know what we’ve recommended. We know what they need. But the coupon limiting the discount to the day of service, coupled with the fact that we’re in Diamond Club™ inspection season, that has saved us.
- You mentioned every day has been different and you’re constantly educating yourself. How are you doing so?
I’m a big advocate of written news. I don’t watch any television news. I hate it. And I’ve instructed my men when they walk into a customer’s home, if they hear CNBC, CNN, MSNBC, Fox News, I don’t care what it is, turn the damn thing off. I said, “Just ask your customer, ‘I need your complete and undivided attention.’” And I look at that as attention dividing here at home, so we don’t watch it. But I do read—I love to read. And I look at credible sources, verified sources of information. I look at this expanding across the globe. I look at how it’s expanded with control and how it’s expanded without control, and I’ve determined that control is better—control is what we need. And so that’s how I’m trying to inform myself, but there’s information that comes surprisingly from customers. Of all the thousands of views and hundreds of likes on our [Facebook™] page, we actually had four negative responses.
One of those wouldn’t allow me to reply at all. She left a negative remark. I asked her, “What would you suggest we do?” She replied, “Piss off,” and blocked me. I actually had another negative response the other day. I expressed that I was interested in his viewpoint. “What more would you have us do?” That guy sent me probably five medical papers. Typically, a medical paper starts out with a paragraph that summarizes the entire study, and then you go through and read all the evidence, and then you can read the conclusion. So, you can treat it like CliffsNotes®, just do the paragraph and the conclusion and scan the details in between. But that was extremely informative about the transmissibility of this virus and what’s different, and how many thousand times more transmittable it is through aerosol. So, when a person coughs, there is literally 2,000 times the contaminant in a person’s exhalation as there is with an ordinary flu. So that was an eye-opener. Everything that I learned about disinfectants came from this guy because he actually sent me the EPA–approved disinfectants that would be effective against the Coronavirus, so I had that list. I got that from a customer, which began as a negative response. He was of the mindset that we were not considering the seriousness of the threat. And I assured him, I said, “I sense from your criticism of us that you think that we consider this to be not a serious threat, and I want you to know that nothing is farther from the truth. I read every word of every study that you sent to me. We’re implementing new measures daily, and I’ll be implementing measures from the ideas that you gave me.” And then I thanked him. Lo and behold, that guy shared our videos on his social media and said, “I love these guys.”
That was from a customer. He sent me tons of medical information—studies on the outbreak and how it was treated in China, in Italy, in the United States, from the CDC, information from the EPA, credible information that we’ve employed now in our company. It affected the measures that we take every day.
I don’t know what the next new thing will be, Bob. Oh, yeah, in fact I do. I do. So, Rachel and I are sitting in the kitchen yesterday trying to think, what can we do? Should we do another video? Should we establish any other policy? Our Governor, Jay Inslee, just put everybody on a shelter-in-place lockdown except for essential services, so what if we just called out to each of our customers on our way to their job and asked, “Is there anything we can do for you? Is there anything we can bring you? We’re going to pass by multiple grocery stores on the way over. We’re going to pass by pharmacies.”
Lo and behold, I saw an article just this morning of a company down in San Jose who has employed this. And people are even stopping by to pick up pharmacy prescriptions for the elderly or a gallon of milk, half-dozen eggs, maybe it’s a box of light bulbs from Lowe’s or Home Depot, I don’t know, but whatever it is, we’re going to give each of our guys $100. We’re going to have the guys, in an effort to establish a relationship and rapport with the clients, ask the client, “Is there anything I can stop and get for you on my way? We understand that you’ve been sequestered by law. And so, you have to have a plumber out to your home, we just want to make this a productive trip. My employer has given me a small amount of money, I can purchase some immediate necessities for you. And if you would like me to do that, then it will just take me a few more minutes, but I’ll still be at your home.” We are literally implementing that today.
I talked about the guys just this morning. It’s outside of plumbing. Now, we’re a commission-compensation shop, so I can’t just lay down an order like this, but my men seemed to be on the same page. We understand that it’s important to earn trust, establish rapport with that customer. How can we do that? Well here’s something we’re not going to charge for. We’re going to buy you a couple gallons of milk and some eggs—it’s going to be a little over 10, 11 bucks, get reimbursed for that in cash. We’re not going to be able to put it on invoices, but we can take payment through PayPal™ or any other way. We’re just trying to find ways that we can be useful here in the community. And first of all, we want to be not harmful, but secondly, we want to be useful. And how can we be useful beyond just the definition of our plumbing skills? So that’s an idea that we implemented today. Every idea has some measure of unpredictable risk, right? So, we’re going to try this one and hope it works out for the best.
- How are you preparing the business for when this pandemic ends and life begins returning to normal?
Well we’re taking it a day at a time, Bob, but I’m not holding off on anything. We’re continuing our training expenditures weekly—professional training for our entire crew. We’ve always done that by Zoom™, so that’s real easy to do even while the technicians are at home. We have huge training investments for three of our apprentices scheduled for the spring and I tend to follow through on those. We just purchased two brand-new trucks—those are about $75,000 apiece. I just bought a vehicle that’ll be using myself for the time being, but we intend to grow to the point where we have a manager in place for what will soon be eight technicians and then nine in 2021. So, you can tell we’ve got our budget and we’re driving it. We’re moving forward. And so, I’m not betting for or against anything. I want this to end as soon as possible, but when it does, I don’t want to be found flat-footed. I didn’t want to delay necessary purchases by months or not train my technicians as I need them to be. We’re continuing with all of the goals with which we began the beginning of the year—that has not changed. We are not drawing back anywhere. And we’re actually looking for opportunities where we might increase our market presence.