California Contractor Boosts Profits with Menu Pricing & Benefits

For years, Dan Foss could be seen driving to and from Grass Valley, California-based ABT Plumbing, Electric, Heat & Air in an old, rusty pick-up truck. The hard-working plumber has spent the last several years servicing customers throughout the rural community positioned just northeast of Sacramento. Though, no matter how hard he worked, Foss simply couldn’t gather the extra scratch necessary to replace his old, reliable rust bucket.

Last fall, Foss attended a co-op training at ABT’s headquarters designed to sharpen his skills on a new menu-driven sales system called The New Flat Rate.

Foss emerged from the training a new tech. Equipped with a newfound confidence and a foolproof sales approach, Foss’s sales numbers soared. In less than six months, not only did he finally replace his beater with a new Toyota truck, his salary eclipsed six figures.

“Anytime Dan’s behind the wheel of that truck, he’s got a great big smile on his face,” said Andrew Twidwell, owner, ABT. “He absolutely deserves it. Our other guys have moved up incrementally as well. We also recently implemented vacation pay, and we’re now offering a $200 monthly medical stipend that employees can use however they see fit. It’s great to be able to give back to our employees. Everyone, including Dan, seems to be smiling around here a lot more.”

Started in My Garage

In 2001, Twidwell opened ABT Plumbing from the comfortable confines of his garage. Following advice he gathered from Plumbing & Mechanical magazine, he implemented flat rate pricing from day one.

As the economy took a tailspin, Twidwell implemented electrical service and ultimately HVAC services, which he hoped would allow the company to diversify its services while inside customers’ homes.

To navigate through the Great Recession, the company was forced to cut its staff down to just two people. Strapped for time, ABT struggled to keep pace with its increasing caseload. As a result, the changing equipment, technology, and pricing demands of all three trades proved too strenuous for a flat rate approach.

Twidwell recognized it was time for a change.  

“Simply put, our books were out of date,” he said. “Additionally, our guys struggled with upsells. If they encountered a plugged drain, they presented a specific price for that fix. Once customers had a grasp on that price, they didn’t want to pay for anything but that. With The New Flat Rate, customers are presented options for a variety of services, which has made it easier for us to bundle additional work as part of a packaged deal.”

With six years of The New Flat Rate under its belt, the company is now thriving. Today, ABT employs over 22 individuals and is bringing in nearly $3 million in sales.

“Since we implemented The New Flat Rate, our sales have multiplied,” said Twidwell. “Year to date, our plumbing numbers are up 27 percent, and HVAC is up 60 percent. Our profits are running in the mid-20 percent now. Previously, we were somewhere around 14-15 percent profit, so, it’s been nice.”

Training Is Essential

ABT first implemented The New Flat Rate about six years ago, but it took a little while for the program to really click on all cylinders. 

“Initially, I just kind of threw my guys out there with the books, expecting everything to run smoothly,” Twidwell said. “That didn’t work, as they were simply applying Band-Aid fixes. Eventually, I opted to attend some co-op training in Corona, California, which really opened my eyes to the possibilities. Then, we hosted a co-op ourselves last fall, which completely changed the way we approached customers.”

Among the greatest takeaways from the training: constantly reinforce the program’s principles and stick to the script.

“Originally, we met with our employees once a week to discuss the process. Now, we meet five days a week,” Twidwell said. “Once the guys started following the script, we achieved exceptional success. Customers will only opt to move up the ladder of options if they’re properly presented with those options. That was a real wake-up call for us.”

While ABT has achieved significant success, Twidwell’s determined to reach even greater heights.

“We’ve been blessed with increased revenue, greater profits, and unprecedented happiness thanks to The New Flat Rate,” Twidwell said. “We’re in this business to make money. That’s why we do it. My ultimate goal is $5 million, and we’re making good progress. We don’t plan on stopping until we get there.”