Rodney Koop, CEO and founder of The New Flat Rate, is a motivational speaker, author, entrepreneur, and solutions-based enthusiast. Over the last three decades, Koop has founded and sold HVAC, electrical, and plumbing service companies. During his career, Koop has contributed numerous articles and industry assessments to multiple publications and recently authored his first book.
Listen to this informative Publish. Promote. Profit. episode with Rodney Koop about growing your home service business.
Here are some of the beneficial topics covered on this week’s show:
– How it’s always about the price until you make it about something else.
– Why providing a menu of services makes the sale easy with no price objection.
– How everyone has a story to tell, and they can use that story for marketing.
– How you can use your book to start conversations with potential customers.
– Why you never have to be afraid of calling someone who has your book.
Connect with Rodney:
Guest Contact Info:
Welcome everybody. It’s Rob Kosberg here. Super excited to bring you another episode of the Published. Promote. Profit. podcast. I have a great guest that I think you’re really going to enjoy today. It really intrigued me because we were messaging back and forth and he was telling me how his book is bringing him in over a million dollars a year of new business. Rodney Koop is the President and founder of The New Flat Rate. His bestselling book is, Why Won’t They Pay Me What I’m Worth? Rodney, super great to have you here. Thanks for taking the time to be with us on the podcast and tell us your magic.
I’m glad to be here too. I am always glad to tell my story in any way that you want to hear it or that will help other people.
I love that you run your business. You’ve been doing HVAC and plumbing for 40 years, 30 years as a business owner. Talk to me, first, describe a little bit about what The New Flat Rate is. Describe to me what your business is and then let’s talk about how your book is making it rain for you and your business.
I had a problem as a contractor. It seems like I’ve been a contractor all my life. That problem was that no matter how educated, no matter how experienced, it’s like no matter what I brought to the table, if I was in front of a consumer, somebody who needed electrical work or whatever, there would always be a pricing discussion. It just kind of drove me bananas because I knew how much talent, skill, knowledge, wisdom, experience, ambition, and tender loving care I brought to the table. I knew they weren’t going to get that from any place else, yet they still thought of me as a commodity. They still thought of me only by the price. It was always about price. I began to realize that it’s always about price until you make it about something else. In order to solve my problem, the desperation of this customer interaction, or them not understanding and appreciating who I am and what I’m about to do for them, we created a menu pricing system. I looked at retail, I looked at Ford Motor Company, I looked at McDonald’s, Lowe’s, Home Depot, and I started to spend hours and hours studying how people buy. I wanted to see the mentality, what’s happening when they look at a hundred kitchen faucets, center down to about five of them, look left, right, up, down, touch one or two, put one in a basket, 15, 20 seconds. So we created a company called The New Flat Rate, which is basically a menu. We create menu pricing for heating, air, electric, chimney sweeps, pest control, and several industries. What it does is it gives a menu for any service, any service at all, whether they need a part for their faucet, or their water heater, or their air conditioner, or whether they need a new breaker box, a new generator, a whole new heating and air system. We’ve created thousands and thousands of menus. The service technician just has to diagnose, choose the appropriate menu, show it to the customer with a very simple script. The customer chooses. The service tech is always only the hero, never the antagonist, never the bad guy. There are choices. When the customer says, “Tell me about that one,” then the service tech just says, “That’s a good choice. “What do you like about it?” The customer doesn’t really know but it fits them. When they say that’s what I want, then the service tech takes it away, “Are you sure, because I don’t think you looked at my other options?” They say, “No, that’s what I want.” Okay. So the end result is number one, never, ever a pricing objection. It’s just gone. Number two, no sales resistance. Number three, no buyer’s remorse. No Google slapping, no phone call saying you ripped me off. So that’s what we did. My daughter is actually the president of the company. I’m the CEO and founder. She has run the company since day one. My son is our national training director. He orchestrates our training, our productivity. I often say just to be clear, “This was my idea, okay?” I wrote the first menu. My son wrote the next 3000.
Hey, fair enough. I mean, somebody had to be the pioneer. You were clearly the pioneer. Well done, Rodney. Now you’ve told me, I mean, your company’s done very well. It’s grown. It’s been on fire. You’re in all 50 states. You’re in Canada. Primarily this is what HVAC, plumbing, electrical, things like that, where someone is going into the home and instead of now worrying about a negotiation or somebody feeling like this is a negotiation, it’s a very simple way to buy that removes all those objections. Is that right?
It absolutely is. The best example is when you and I were younger, Rob, a car wash was four quarters if you’re really good, maybe eight quarters if you wanted to really get into detail. Well, now you know the drive through car washes, they show you a menu. 10 years ago, 12 years ago, when the menus first became popular in car washes, they started down here anywhere from $2 to $5 and then the top option might be $10 to $12. That was common for a while. Then it moved up and up. I actually went into a drive-in car wash here in town about three weeks ago, the bottom option was like $12 and the top was like $28. It’s the same car wash but you will pay more for a rainbow soap. You just will.
Well, of course you will. I love my cars. I’ve got to take care of my cars with the rainbow soap. I love that.
That definitely works but the reason for the book, everybody wants to tell their story, I think. I think that you know that better than anybody. Everybody wants to tell their story. If they find something that works and changes things, then it’s an exciting story. We went from creating menu pricing books in 2011 to, I suppose, about five years ago, going all digital. Now it’s all app based. Our app is used right at 30,000 times a week. It’s very, very successful and it’s changed lives because the average client for us has an increase of $150,000 per service truck per year in a high, high, gross margin business. So, we wrote the book. The book tells the story, but why did we write the book? We like to tell the story, but the story is the marketing. As you would say, instead of giving them a business card, you give them something that’s, even if they don’t read it, it’s just way more memorable, gives you a certain level of credit credibility, and maybe gets you into the door and invited to speak. I think the last year I had about 20 articles published in magazines. It’s funny, I think I worked 15 years to get an article published in a magazine and now my kids get asked for articles in magazines. So, it’s transferred generations. Here’s how we use the book. If we’re at a live event, of course, we can have a stack of books there. We found that we don’t just leave them out. We keep them behind us, sort of, and then we talk to people and then we can give them a book. It seems to carry more value. People like that. We also do miniature books that’ll fit in their pocket if we’re at a trade show or something, simply because of the obvious. If something’s bulky, they’ll lay it down when they’re walking around.
Interesting. I haven’t heard that. So, what do you do there? How do you create the mini book? Give me some details about that.
We just take sections. We would just take sections of the book, like chapter two in my book, it is called The Ferris Wheel. We might just print that, right in the office, in our printer, print it into a mini book with a cute little cover. As long as it fits in a pocket, as long as they can slide it into a pocket, at some point that book will make it back. Most of the books go out because in our marketing, we’re collecting contact information, emails, et cetera, et cetera. When a prospect trips a wire, shows interest in our products or services, they’re going to get seven touches. It turns on some kind of a thing where they’re going to get seven touches. The first one is going to be, we’re going to send them my book. They’re going to get the book. They’re going to get the book right away. Now, when you send somebody something, especially if it’s lumpy mail, they’re going to open it. They’re at least going to look at it. That way they’ll take your call, or they’ll look at your next email or something. When you get that touch with the customer, it creates some sort of a mental bond. Oh, this is a nice thing. Now you can call them and you’re not a telemarketer. Now you’re just a person asking, “Hey, I just wanted to know, did you get that book? I didn’t know if the post office delivered it.” “Oh yeah, I got it.” “Oh, great. Hey, you need to check out page 32.” That’s an easy touch without any pressure, without any telemarketer. You know what I mean? You’re just a friend asking questions. Then, they’re automatically going to get probably another email, an article, podcast, this or that, something. Everything is going to have a call to action where they can call or click for a live face to face, either a demo or another thing that we do, that’s become, it’s worked pretty well. We call it Coffee with Rodney. We can do a demo with one of our sales team, or if they just want to talk to a contractor, just contractor to contractor, let’s just talk about your hopes and dreams and what’s driving you bananas; Coffee with Rodney calls. They’re going to get some more lumpy mail. We might send them a coffee cup or something. They’re going to get seven things from us, working up to getting a live demo. We’ve got the pre demo phase, there’s going to be seven touches. Then there’s going to be the live demo and then there’s seven more touches. It’s going to call post demo.
You mentioned to me, Rodney, you are sending out about a thousand books a year. That’s representative of a thousand potential customers that you would get, that lead to a phone call, a demo, the follow-up sequence. What is an average customer worth to your company, lifetime value approximately, would you say?
That’s a good question. I believe in looking at lifetime value, but I don’t know that I’ve really done that too much with our customers. First year value is right at 10,000 to 12,000 on average. We organized our member base by the years. We started in 2011. The first customers that we have on our list are from 2012. A lot of them stay with us. Sometimes they sell their company. They have turnover or different reasons, but boy, they should stay. Rob we’re at two billion dollars in new revenue for our clients. We’re very proud of that because that’s money infused into companies, a lot of them who were struggling when they met us. We’re very proud of that.
A lot of people think about or hear about a best-selling author giving away their book and they bristle at that. They think that’s not a good idea, whereas honestly, it is a fantastic idea. Obviously, especially if you’re in a business where an average client is worth five figures. In your case, it may be worth mid five figures or even six figures if they stay with you for four or five, six years. But even worst case scenario, they stay with you one year, you have a client that’s worth $10,000 or $12,000. Yes. Sending out a thousand books will prob cost you about $5,000 in a year but one client you get, you double your revenue. As you told me, you’re generating seven figures a year from this simple process. I really hope people are listening and seeing how they should be using their book with a follow-up sequence, not just sending their book. I spoke to a BSP client just the other day and he told me, first time I ever heard this, he said, “Hey, I did what you said, I did your system, and it didn’t work.” I said, “You mean you got the list, you sent books out, and nothing?” He goes, “Yes.” I said, “Well, tell me, what was the follow-up like? What were the telephone calls like that day?” He goes, “Follow-up? What follow-up? What telephone calls?” I’m like, “You didn’t watch the whole video then.” I mean, the book positioned you, but you still need a follow-up sequence in. Yours of course is very detailed, which I love. So congratulations on that.
I sold cars for a year in North Dakota. I developed this mentality that said when somebody comes in to look at a car, of course the research at that time was that 60%, 65%, give or take of the people who walk in a dealership and look at a car will buy a car within three days. It’s such a big deal for them to get up the guts, let’s say, to actually walk in and talk face to face with a salesman in a car dealership that they don’t do it until they’re serious. I’ve studied the Ford Motor Company for over 40 years, I’ve actually test driven and personally talked to car salesmen over 300 times. I always plan to write a book on car selling or on selling cars. I just never got around to that. Recently, I went to an auto dealers conference in Los Angeles, and I asked a group of auto dealers, I told them, I said, “Well, back in the eighties, over 60% of people that walked into a dealership will buy a car within three days.” They said, “It’s the same today.” That means that is an on-fire prospect. You can’t let them out the door. That was my mentality in 1980. I No matter what the car, or truck, I had a special test drive course just for that vehicle that would really shine whatever that vehicle was good at. That’s another story but if they left without buying, which was not uncommon, my process for follow-up was this – Number one, never call a prospect back without new information. It was always like this, “Joe, hey, this is Rodney down here. I am so sorry. I’m so glad you came and drove the 280Z, but I’m so sorry. I forgot to tell you how accurate that gas gauge is. Did you know that when it goes down and it says E that you’ve got exactly 12 miles? It’s accurate to within a glass of gas.” You always had to have new information. If you send somebody a book, it’s the perfect opportunity, you give them time to get the book. Whether they open it, read it or not, then you call them and you say, “Hey, Joe, hey, this is Rodney. Have I caught you at a bad time? I am so sorry.” You always start with that. “I’m so sorry. I forgot to tell you what’s on page 32. I almost feel like I wrote it just for you.” You see what I mean? Now you’ve re-instituted the relationship. You’ve added curiosity. You’ve added a feeling of I just did something just for you. It more cements the bond. It’s the perfect thing to do that because you never have to be afraid. Here’s a good statement. You never have to be afraid of calling somebody who has your book.
This is fantastic. Thank you so much. Thanks for your time. Tell me where people can learn more about what you do, maybe get your book, of course they can get your book on Amazon, but let’s give them some links to where they can get some info directly on you.
Yeah, of course they can go to Amazon. I’ll make $2 or $3. That’d be great but anybody who shows interest, they can just go to thenewflatrate.com, but we’ve made it even simpler. menupricing.com. If they just go to menupricing.com, they’ll learn all about us.