Possible way for us to change the industry in a positive way

Something was brought to my attention recently and I would put it out there and see what you guys thought.

Does it make more sense to go out and sign up as many customers as you can, slap roofs on, take a minimal profit and have a huge amount of potential liability out there with warranties or, sign up enough to keep you busy, actually work toward the best interests of the homeowner and be paid handsomly for each and every job that you do with great profit margins, create customers that will refer everyone they know and the ability to do the job right the first time, which will reduce potential liability dramatically.

People get anxious in a storm situation and begin to do things to undercut themselves and their industry. When in reality they should be doing just the opposite.

If more companies would take an approach simular to this it would change the industry in a major way. Prices and profits would increase dramatically, work load would be reduced, the perception of the industry as a whole would be forever altered for the better.

What do you guys think?

Ray, you are absolutely right. Unfortunately, most people who get into this industry don’t think through the process. It’s too easy to become “Chuck with a Truck Roofing” and title oneself as a “contractor”. Worse is when they then start calling themselves “insurance claim specialists” when they are anything but.

Although the industry has begun to mature and more contractors are beginning to comprehend the need for more training and professionalism in all areas, those who do take the proper steps will likely never amount to more than 20% of the industry. It’s that 20% that must lead the way. Still, likely only about 25% of that 20% will actually take substantive action.

MN always leads the way in highest ins claim payouts. I’ve always said it’s because we have time during the winter to think through the processes involved then go out when the weather breaks and demand that adjusters become realistic. Also, as the state legislature recently found out, MN contractors are informing themselves and getting involved in the issues that affect them and taking a stand on those issues. Now, MN DOLI is starting to show respect for contractors that I’ve never seen anywhere before.

Always amazes me how most guys out there would rather spend lots of $ on hot wheels for their work trucks then on getting themselves trained in all areas that would help them to do a better job for their customers and get them better paid.

It all comes back down to talking with everyone about the issues and getting on their case to do a better job and get involved (get off their butt’s).

Around here theres to many " wanna be’s running co.'s" who dont have a clue about pricing, roofing USE to be one of the high paying jobs around here…not no more…

This behavior will never change. The biggest problems, in my opinion, are too many contractors being very poor businesspeople and not very many people have a remote clue how to sell. I wouldn’t even go so far as to name most insurance restoration people as order takers, that would be giving them too much credit. I say this because most of them can’t take an order for a thousand bucks in return for a $10,000 roof, they have to give the entire roof away.

Unfortunately, there’s no way to change it. All it takes is one or two getting desperate, they start giving away deductibles … then 2 or 4 others lose a couple of sales and tie the loss to the competitor’s discounting and the snowball effect is in place.

Every now and then I’ll hear some of our Sales Reps complain about losing jobs to these give away hacks. I immediately call bull$hit when they try to tell me that is the reason they lost. They try to tell me it is the economy, people just don’t have the money. I tell them to go over to the Best Buy parking lot and watch people parading out of there with new 60" flat screen TV’s they just spent $1200 to $3000 for. Go out to the local nicer restaurants any night of the week and see how packed they are with people and their families dropping $100 plus on dinner. Now try to tell me those same people can’t prioritize spending $1000 on their most valuable asset if the Sales Rep properly establishes the value our company brings to the table? Bull$hit. No doubt, unless the quality of sales effort is there, the Customers will go with the lowest cost option. I find it more than mere coincidence that I never hear these same excuses from our top Sales People.

So we know the problem how about answers?

“Roofers” want to make money (no doubt this is a why the high percentage chooses this trade) and easy to misunderstand quantity of workload with quantity of money in the bank.

What is the real issue here?

  1. Waiving Deductibles? 
    
  2. Insurance Companies not paying true value/ scope of work? 
    
  3. Roofer's not knowing their own value? 
    
  4. Roofer's or not knowing the real costs of being in business? 
    
  5. Roofer's lack of knowledge processing and handling these Claims?  
    

Probably all of the above if we are talking Insurance Restoration Roofing. So how about answers to those questions? IMO…

  1. Stricter rules on waiving, cheating deductibles.   My answer to this one is Canceled checks for deductibles before payout, not foolproof but a safety measure.  Who will push this?  Insurance Companies could and should.  
    
  2. Third party  "Mediators" for all the Claims not agreed on by both parties, yes I realize this is Private Adjusting  so be it.  After a couple of these fees paid above Claim amount will resolve more Adjuster/ Contractor field issues.  
    
  3. Number two answer could very well answer this one as well.  Hard for me to say but... XM and Insurance Work could be the most consistent pricing in this business.  
    
  4. Overhead and Profit varies greatly from one business to another so the bottom line will always vary and those that don't get it will be out of business soon enough, and replaced by the next generation not knowers.   
    
  5. Spend the time Training the XM Program (Insurance Contractors) and/ or  Previous Job Analysis' and Experience.

[quote=“Authentic_Dad”]This behavior will never change. The biggest problems, in my opinion, are too many contractors being very poor businesspeople and not very many people have a remote clue how to sell. I wouldn’t even go so far as to name most insurance restoration people as order takers, that would be giving them too much credit. I say this because most of them can’t take an order for a thousand bucks in return for a $10,000 roof, they have to give the entire roof away.

Unfortunately, there’s no way to change it. All it takes is one or two getting desperate, they start giving away deductibles … then 2 or 4 others lose a couple of sales and tie the loss to the competitor’s discounting and the snowball effect is in place.

Every now and then I’ll hear some of our Sales Reps complain about losing jobs to these give away hacks. I immediately call bull$hit when they try to tell me that is the reason they lost. They try to tell me it is the economy, people just don’t have the money. I tell them to go over to the Best Buy parking lot and watch people parading out of there with new 60" flat screen TV’s they just spent $1200 to $3000 for. Go out to the local nicer restaurants any night of the week and see how packed they are with people and their families dropping $100 plus on dinner. Now try to tell me those same people can’t prioritize spending $1000 on their most valuable asset if the Sales Rep properly establishes the value our company brings to the table? Bull$hit. No doubt, unless the quality of sales effort is there, the Customers will go with the lowest cost option. I find it more than mere coincidence that I never hear these same excuses from our top Sales People.[/quote]

Agree on all points.

The utter lack of professionalism in the residential roofing business(insurance restoration) is hard to describle(or understand). It may be one of the most simple, profitable businesses out there, yet it continues to draw a generally uninformed, myopic, unethical crowd. Anyone who flies straight, knows the business and can tuck their shirt in should thrive in that industry.

Its bizarre…its seems lilke most of the guys who do residential insurance restoration work have taken some sort of oath to be unprofessional and make their job as difficult as possible.

Folks, this is not rocket surgery !

" sign up enough to keep you busy, actually work toward the best interests of the homeowner and be paid handsomly for each and every job that you do with great profit margins, create customers that will refer everyone they know and the ability to do the job right the first time, which will reduce potential liability dramatically."

That’s the way I roll.

I agree with everyone but the prices from 2000 will never come back since everyone cuts each other. I have a guy if he makes 500 bucks he is happy. What an pain in the ass.

I am an insurance company. Please explain why I care who pays the deductible from a profit and loss perspective of the insurance company.

I only care how much we pay out on claims, not who eats a deductible. As long as the insured accepts our settlement as we dictate, I am happy.

Why on earth would I care if a contractor is willing to pay a homeowner $2,000 to place a sign in their yard for a week? I still underpaid the claim and kept the companies losses down.

The only reason an insurance company exists is to make a profit. Who pays the deductible has zero impact on that.

I have heard that exact quote(off the record, natch) from mid-level managers at major P&C carriers. And I believe it.

I know I will catch wrath and anger from everyone on this board but here it goes: Times are changing. business models must too. I remember as a kid paying $30 for a pair of Levis. I am hard pressed to find a pair of jeans at wal-mart over $15. I also remember as a kid going to the store and buying glass bottles of pepsi for around 3. I can go to wal-mart and buy generic 2 liters for .68. Prices are going down for lots of things.

There was a company advertising whole house painting for $995 and I always thought that was too cheap. I just saw a sign this weekend advertising whole house painting for $675! That’s ridiculous but how is he doing it? For one, I guarantee he is not hand brushing with a 3 inch horsehair brush with three coats(the way I was taught as a kid). I am sure he is using a high powered spray rig and spraying the whole house in a couple hours. He probaly doesn’t tape off and uses large hand shields around everything. In the end, this guy likely clears $300-$400 per house per day. Everyone here says it is bad but if he worked at McDonalds he would only make clear around $60 per day. He lives quite well and the homeowner just saved a ton of money.

Our industry is changing and we must adapt or perish. Some here may adapt and go high end like Tinner and Kage. However, not every roofer can go high end. I think it is hilarious that about everytime we talk about how prices are going lower and people complaining about competition low balling their bids that it is always from a particular geographic region. Our country as a whole faces the exact situation in the global economy. I once was told not to fear the country that could make a billion dollar airplane(USA) but rather fear the country that can make a $5 toaster(china).

famous, not to sound snotty, but I prefer to purchase my clothes somewhere other than Wal-Mart. In order to do that, I need to make a fair profit on the work my company provides.

I can absolutely assure you that NOBODY survives, much less prospers, by being the low price supplier in the market place. It doesn’t matter what market or where the market exists. There are countless studies done on this, it’s simply fact.

You mention China. Guess what? 45 year ago, Japan was what China is today. They are now and have been a much higher cost manufacturer than the United States for the past 20 years. As China’s economy and standard of living rises, so too will their costs to manufacture rise to where they will no longer be the low cost provider. Who knows who will be next.

You may continue to run your business any way you wish. Again, while I think you are mostly a moron, I think you’re essentially a good person. Your hearts in the right place, unfortunately, your head is up your behind.

I would add that it may be a matter of perspective. I’m beginning to think your idea of success would seem like failure to me. You may think the guy painting houses for $675 is doing HO’s a favor. I’d bet he’s screwing them royally as he can’t be doing a quality job, using quality paint so they’ll be painting their house again in a year or two. I just had my house painted and paid $4,000 and felt it was worth every penny and then some. The crew took their time, no shortcuts, used quality paint and did a great job. Now I feel like my most valuable asset is well protected and I won’t even need to consider painting it again for 5 years or longer.

BTW, I have a reasonably good memory too. I remember buying a glass bottle of coke for $.10 when I was a kid. That same bottle is now $1.25 out of a machine.

[quote]If more companies would take an approach simular to this it would change the industry in a major way. Prices and profits would increase dramatically, work load would be reduced, the perception of the industry as a whole would be forever altered for the better.

What do you guys think?[/quote]

Problem with this is that your average roofer has an IQ of around 100. I practice what you’re preaching, but 90% of our work force is going to continue to cut their own throats underbidding work. As they fall eventually, another will replace them, it’s a never ending cycle. I just try and keep my own little part of the world clean, anything else is just shoveling $&!# against the tide.

[quote=“famous”]I know I will catch wrath and anger from everyone on this board but here it goes: Times are changing. business models must too. I remember as a kid paying $30 for a pair of Levis. I am hard pressed to find a pair of jeans at wal-mart over $15. I also remember as a kid going to the store and buying glass bottles of pepsi for around 3. I can go to wal-mart and buy generic 2 liters for .68. Prices are going down for lots of things.

There was a company advertising whole house painting for $995 and I always thought that was too cheap. I just saw a sign this weekend advertising whole house painting for $675! That’s ridiculous but how is he doing it? For one, I guarantee he is not hand brushing with a 3 inch horsehair brush with three coats(the way I was taught as a kid). I am sure he is using a high powered spray rig and spraying the whole house in a couple hours. He probaly doesn’t tape off and uses large hand shields around everything. In the end, this guy likely clears $300-$400 per house per day. Everyone here says it is bad but if he worked at McDonalds he would only make clear around $60 per day. He lives quite well and the homeowner just saved a ton of money.

Our industry is changing and we must adapt or perish. Some here may adapt and go high end like Tinner and Kage. However, not every roofer can go high end. I think it is hilarious that about everytime we talk about how prices are going lower and people complaining about competition low balling their bids that it is always from a particular geographic region. Our country as a whole faces the exact situation in the global economy. I once was told not to fear the country that could make a billion dollar airplane(USA) but rather fear the country that can make a $5 toaster(china).[/quote]

That’s a pretty good description of a race to the bottom of the barrel.
Not everybody desires cheap crap, many people see the value in a better product/service.

There will always be a market for cheap crap, some can’t afford any better, some don’t care, some don’t realize what it is that they are actually getting.
I don’t want anything to do with that part of the market, that part is for “others”.

I’ll make an observation. I’ve never lost a job to a price shopper. That person is NOT who I’m interested in doing business with. Why bother trying to convince him I’m right for him? What’s the point? IF I cut my margins to the bone, I have to cut corners. If I have to do that, I’ll stay at home or go fishing.

I posted pix at the other forum of the reason I was called instead of the stormer to check and repair storm damage today. People are tired of cheap and starting to pay more attention to quality. That’s the current trend.

Venting.

well well if a sub contractor came in your office with all the insurance, and showed you passed work that proved he can do the work with workers compensation and public liability insurance even Thurs that they are the minion amount required if your minimum rate was $45 and he offered to do it for $35 you all would hire him, even Thurs you all know that by the end of the year ,when he is auided by his insurance company he will be filing for bankruptcy i was in the roofing bussiness from 69 till 07 i’ve seen this over and over.

Did I say 100?! I meant 75ish…

John,

That is my big issue with all the large roofing companies. They charge as much as possible to the homeowner and pay their subs as little as possible. The bigger the company, the bigger the offender. There are some good ones out there but the ongoing joke around here is that on rainy days look how many roofing trucks are at the casino. That’s where all the extra money goes.

My reject workers go work for the big boys that charge twice as much. These are shinglers I tell not to come back because their quality is terrible.

Any company on here that runs more than 1-2 crews can’t preach about quality and workmanship. If you are running multiple crews, there’s no way you put out a better product. I am on every job watching every aspect. You won’t see me with a nail gun, hammer, or saw in my hand. If it’s nailed ugly or wrong, it gets ripped off. If you run out of supplies, I’ll get them ASAP.

I can’t tell you how many roofs we tear off and entire sections are unfelted. I get repairs all the time where the roofs are 3 nailed by the “Quality” expensive companies. There was a company in town called “Superior” roofing that was one of the biggest in the state. They had all the new construction around. The property management companies here now call them “Superior” roofs because every one of them needs repair. We even call them “Superior” neighborhoods. They ran dozens of crews and the quality is evident. I make great money every month repairing these jobs. Price and quality are not related!

Some of the best food around are the cheap taco stands!!!

if you are doing better work then the “BIG BOYS” why pray tell are you cheap? why leave money on the table?? oh and by the way…you can have multiple crews and still do nice work…there called foremen that you hand pick…but if your just going to send chucknatruck…well that would be your fault…

"Delegation is a skill of which we have all heard - but which few understand…"
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