Las Vegas — Union plumbing contractors must improve their image and better educate themselves to recapture a majority market share of the service industry lost to non-union contractors and big-name franchises, said Robert Melko, president of Chicago-based Bishop Plumbing Inc. He made his remarks in late February here at the Unity 2008 conference sponsored by the Union-Affiliated Contractors.
Melko warned contractors that the service and repair industry is challenging, but with a slumping housing market, he added that the work could be lucrative. The current average profit margin nationally for mechanical contractors in the residential service industry is 25% to 35%, compared to 3% to 6% for contractors working in new construction, he said.
“The service arena is the most profitable aspect of the plumbing industry, but it's not easy,” he said. “If anybody in this room — business managers or contractors — thinks this is a silver bullet or that this is a quick fix, it ain't going to happen. This is difficult and this is time consuming, but the fruits of the industry are there if you run it right.”
One way to improve the image of plumbing contractors is to re-evaluate pricing, Melko said, placing the average hourly wage of copy machine repairmen at $185.
“Where are the plumbers at? Where are the contractors charging that?” he asked. “Contractors are afraid, for whatever reason, to charge for professional plumbing services.
“The comfort that we've given the American people is second-to-none across the world. The plumbing, heating and cooling that we do in this country is the most underestimated program in homes.”
Melko said most plumbing contractors are afraid to charge higher prices for their services because they do not run their companies in a professional manner and they are afraid of losing customers. The customers most worth retaining are those who value professional service and who are willing to pay for it, Melko said.
“When you say you're a 24-hour service, you're a 24-hour service. That costs money,” he said. “I have yet to come across a cheap emergency room in a hospital.”
But in order to demand higher prices, plumbing contractors must go through a rigorous education process, Melko said, encouraging those in attendance to “take the coveralls off” and become better business people.
Melko advised contractors to know the costs of doing business and to obtain higher prices by giving customers what he called the professional treatment, which includes projecting a professional image.
“We have an image problem in this industry, and everybody in this room knows it,” he said.
Contractors can improve their image by maintaining professional looking service vehicles, which Melko called moving billboards that are part of any business's advertising and marketing efforts.
“I've jump-started better trucks than what some of my fellow contractors are driving around in,” he said.
Melko also encouraged contractors to be the “Nordstrom's of plumbing” by enforcing worker dress codes and training technicians during company meetings. Technicians must receive continuing technical education as well as training on new products and salesmanship, he said.
Melko added that uniforms and ID badges are necessary to present a professional image, and technicians should learn ways to protect customers' homes during service calls. Service technicians need to be able to communicate with the public, correctly diagnose often-unseen plumbing problems and generate the proper paperwork, he said. They also must be willing to work overtime, holidays, Saturdays and Sundays.
However, Melko advised contractors not to pay service technicians less money to recover the cost of retaining their market share of the service industry.
“Service technicians need not be second-class citizens in the plumbing industry,” he said.
In addition to training service techs, Melko suggested contractors sell professional products not sold at home centers. He also urged contractors to “think outside the pipe” with ideas such as bigger and better warranties on products.
Contractors also must develop a marketing fund to promote their professionalism, he said. Such marketing campaigns should demonstrate any efforts plumbing contractors have made to support various charities, Melko said.
“You have to show the American public that we're not just taking the cash and shoving it in our pockets — that we do have a heart, we do have families and we do care,” he said.
Educating the consumer also is key to overcoming the American publics' belief that workers in the organized building trades have a bad work ethic and are overpaid, inflexible and arrogant, he said.
Consumers need to know the importance of local plumbing license laws and that it takes 5,000 hours of training in an apprenticeship program to become a plumber, he said. They also should understand the advantages of hiring a union-trained plumbing contractor, he said.
“We are the best kept secret in the nation, but why?” Melko said. “We have nobody to blame but ourselves.”