Joe Percario, a third-generation business owner, is president of Joe Percario General Contractors, number 95 in this year's Replacement 100. The company is in its 57th year of doing business in northern New Jersey.
Replacement Contractor: How were sales in 2009 relative to 2008, and what's your forecast for 2010?
Joe Percario: Last year we did $5.3 million. This year we're on a good, solid track to hit $6 million.
RC: What's the biggest challenge you've faced or lesson you've learned as a company owner from the experience of the recession?
JP: This year I think the biggest problem was knowing what we could sell. Last year we ended up coming short on some jobs.
RC: How did you solve that?
JP: We were using a computer module that gave the salesmen the ability to negotiate price. It included a high-low range. What we've done is to put together a program with all our products and all our costs so that the salesperson can walk the house, figure out everything the homeowner could be interested in doing now or in the future, and present them with a combination of options for the now or future job. The next step is to go back in there, tell the story, do a picture presentation with samples, and when they do pick the products they want, make some minor adjustments and do some alternate pricing. It's an integrity-driven price. And we try to sell 100% value. The only thing we can negotiate is payment options or payment terms.
RC: How is this different from what you were doing?
JP: What we do today is we give [the salespeople] no room for fluff. We have hard, hard numbers in the computer. Every installation has to be exact, whether it's siding, roofing, windows, or even general construction. They're responsible for those numbers.
RC: How long has the new system been in place?
JP: We've been doing it for the last six weeks.
RC: How does that affect the selling process?
JP: When the salesperson sees real numbers on a computer screen, that's the moment that he knows what the job is really all about. That's when the salesperson price conditions him or herself. What generally happens is most guys go in there and they want to see how much the customer wants to spend. They ask: How much money are you thinking about investing in your home? That question psychologically destroys the mental state of the salesman.
No Ballpark Estimates - Ever
RC: Many owners find that customers want to negotiate for price before they even get a price. How do you manage that?
JP: It happens all the time. The customer is always asking, How much is it? The salesperson has to be strong and bold and say: I have to measure the job and put everything in the computer. Anything less than that is a guess.
If I gave the customer a number up-front, all they'll remember or think about for the rest of the appointment is that number. Never give a ballpark. Yes we can show them similar projects and tell them what those cost. But even there you're walking a tightrope. Suppose we did this job for Mrs. Johnson for $23,000 and theirs turns out to be $26,000?
RC: Why do reps default to a ballpark?
JP: Every rep is trying to cut corners and save his own time, thinking he can do it faster. I would rather spend more time than someone else and sell the job at the right price.
RC: What kind of effect did the stimulus legislation have on your sales?
JP: In the first month it was unique. After that it was everybody's everything. Right now we are thinking about doing more on energy audits and surveys. Offer people an energy-saving checklist. Create a mathematical equation that shows the products and services we sell and how each could save how much energy. We can demonstrate all this when we get the opportunity. But just to have that talking point is a start.
RC: Is the stimulus still a factor in your marketing and selling?
JP: Yes. I had a customer in Millington last night who has $800 or $900 monthly fuel bills. I showed them how insulated siding, the drop-in product, could bring their bills down. I set a go-back on this appointment because it got dark. They were really interested in how the stimulus would work. If I didn't have that I'd be just another contractor. It gave the call some urgency that it wouldn't have had without that. But you have to know about this and give them the documentation to back it up. You have to prepare for those appointments.