Sticker Shock

A couple of weekends ago, I got that unpleasant surprise of no hot water. That’s not nearly as bad as no water, but when you’re looking forward to a hot shower, it’s still a big letdown. After two or so hours of trying to resolve it myself, it was clear that it was time to call in a professional, in this case the company that had installed the product less water heaterthan three years ago. The good news was that everything would still be under warranty.

More good news – right there on the side of my non-working water heater was the installing company’s 24-hour service dispatch number (or so I thought). My call was answered promptly and we set up a service call for the next morning.

There was one minor point of contention: she couldn’t find any record of her company installing the unit. But no problem; as long as I had my paperwork from the installation showing that they had indeed installed it, everything would be covered. I assured her that I did and I even knew exactly where it was filed. She did give me a stern reminder that if it turned out that someone else had installed the product, there would be a significant non-refundable service charge (think Sunday morning) and of course, no warranty coverage.

I never gave it a second thought until later that evening when I grabbed the paperwork out of the file. To my astonishment, the business name on the paperwork didn’t match the company that I had been talking with on the phone! By now, you have probably figured out what happened. Earlier in the year, the plumbing contractor that I’d been on the phone with had been out to repair a broken outside faucet. But while their technician was here, he had slapped his company’s business sticker on the side of my water heater over the sticker of the contractor that had actually installed it. Once I figured this out, I quickly cancelled the one service call and rescheduled with the installing contractor.

Here’s an example where a good business practice was overdone. From both a contractor and consumer perspective, business stickers are great. They’re a convenient and inexpensive way for the homeowner to know who to call if there’s an issue. But this contractor got overzealous with it and almost led me down the wrong path as a result. He ended up coming off as unprofessional. And come to think of it, I better go see whose stickers are on the HVAC unit and water softener. If they belong to him, they’re coming off.

A constant annoyance versus constant pressure

photoA couple of weeks ago, I spent four days hanging around a hunter jumper horse show at one of the largest facilities in the country for these events. Overall, it’s a first-class facility and billed as one of the most beautiful anywhere.

Like any event, there’s always some complaining and over the course of this extended weekend, I heard the usual grumbling from the competitors: “that one judge is biased, the food’s expensive, the events are running behind schedule“, etc. But do you know what the number one complaint was?

“The water pressure here is awful.”

“They’ve got plenty of wash racks but there’s not hardly any water if more than a couple of people are using them”

“It takes forever just to fill a watering bucket.”

It was frustrating to hear, because I knew it didn’t have to be that way. There are numerous pressure boosting products available that could address this or at least make things a lot better. But from what I could tell, a single 6-inch submersible with an undersized pressure tank is supplying the entire facility and all those acres. And beyond the pump house, it’s a hodge-podge of PVC piping that’s been put together over the years as the facility has expanded. Even without knowing all the details of this system, it’s obvious that a few variable-speed or simply single-speed pressure boosting systems would work wonders here. And the cost would be trivial when taken into the overall expenses of managing and maintaining this facility.

Once again, the competition in terms of constant pressure and pressure boosting isn’t necessarily between manufacturers. It’s the alternative of doing nothing. And here’s another case that by doing nothing the owners and management of this otherwise very nice facility constantly keep their customers annoyed.

Next time I’m there, I’m going to track down their maintenance folks and their contractor and get a conversation going. This water system can be better. A lot better.

“How did we live without ________?”

Wouldn’t it be cool if someone made a washing machine and dryer that was one unit? A single appliance with a single door that you put your dirty laundry into and when the cycle was complete, the clothes were clean AND dry. I read recently that the appliance companies have been looking at this for years and in the not too distant future, an integrated washer and dryer may be a reality. Whenever that happens and we all have those, we may look back and think about how ridiculous it was to have to move a pile of wet laundry froFrigidaire-Affinity-Laund08-lgm the washing machine to the dryer. But until then, we just accept the way things are and never give it a second thought.

Looking in the other direction, there are tons of examples already in our lives today. Who knew we needed smart phones, microwave ovens, or cruise control on our cars? But in every case, up until we had those products, we didn’t know the difference.

What about our industry? I would suggest that variable-speed, constant pressure systems fall squarely into this category. I know this because if you ask a homeowner that has upgraded to constant pressure, they will tell you that they will never go back to a conventional system. But for them to get there, their water systems contractor had to lead them there. Not a single one of those homeowners woke up in the middle of the night thinking, “Boy, I wish someone made a water system that got rid of that large tank and gave me better, more consistent pressure.” They just assumed that for all the advantages of being on a private water system, these were just things they had to live with. They didn’t know there was a better way until they got to experience it for themselves.

Not everyone has a smartphone and likewise, you won’t sell an upgraded, constant pressure system to all of your customers. But to those customers that you do, they won’t be able to imagine going back to their old system ever again.

In the meantime, I think it’s time to go move my laundry from the washer to the dryer.

Cupcakes versus water well drilling

“Barriers to entry” is a marketing term that sounds sophisticated, but all it really means is, “How hard is it to get into a business?” Barriers to entry are simply those things that keep someone new from entering a market.

Barriers to entry take many forms. One of the most common is simply a high amount of capital ($$$) required for someone new to enter a market. The airline industry is a good example here. Related to a high amount of capital is scale, or how large does the business have to be in order to be profitable. The automotive industry is a prime example. Other barriers to entry are an entrenched and loyal customer base (think Starbucks or Harley Davidson), or even legal and regulatory hurdles (think liquor stores).

Obviously, if you’re already in a market or industry (the marketing books call this the incumbent), you want the barriers to entry to be high in order to keep competition out. But if you are starting a business (that’s the entrant), you want the barriers to entry to be low. However, the problem with markets with low barriers to entry is that in the long-term, it’s very difficult to make a profit. That’s because even when you’re first, everyone quickly sees that youDrilling day2’re making a profit and it’s easy for them to jump in.

Here’s a great example: cupcakes. Cupcake shops have been all the rage the last few years. But I ran across an article the other day about the “cupcake bubble”. Come to find out, the cupcake market has reached saturation and even been overbuilt in many regions. Many shops are going out-of-business. There just aren’t enough people to support all those cupcake shops.

So why a cupcake bubble? Because the barriers to entering this market are so low. There are always hurdles to starting any business, but opening a cupcake shop in the scheme of things is pretty easy. So, lots of people saw a profitable trend with low barriers and jumped in. But as a result, it became difficult for most of them to make a profit over the long-term.

So what does any of this have to do with water well drilling and the water systems industry? Well, if you’re a professional water well contractor, the barriers to entry for someone who wants to enter your market are fairly high. It takes specialized equipment that represents a significant capital investment. It also takes specialized expertise and knowledge and experience to be successful. There are also regulatory barriers dealing with licensing and DOT regulations. And chances are you have a loyal customer base.

The point is that not everyone can do what we do as an industry and what you do as a water well contractor. We are unique. And when you couple that with the value and quality of the product we deliver at a very reasonable cost, you start to realize that once again, we’re in a great industry.

No stone unturned

photoI’ve talked about differentiating your business before (Why you?) – that is, how does your business stand out from your competition and deliver a higher level of product and service?  Here’s another simple, but great example of a business doing exactly that.

The pizza business is very competitive. Just think of the number of pizza restaurants in your neighborhood. And although some might argue, pizza is pizza. So, how does one pizza business differentiate itself from all the others in such a commoditized market?

Enter this pizza restaurant (EOC stands for East of Chicago) located in an area that, as you may have guessed, is heavily agricultural. The last few weeks have been planting season, which mean long days in the fields for the farmers and their crews. Those guys get hungry, but don’t have time to go into town for lunch or dinner.

This pizza business has identified that unmet need and offered a solution. By offering “delivery to your tractor”, they’ve not only differentiated themselves, but expanded their customer base. If the sign simply said “WE DELIVER”, it probably never would have occurred to these customers that they could have fresh pizza for lunch, instead of the usual alternative of brown-bagging it.

Think of this example in terms of your water systems business. Are there opportunities and ways of reaching customers right under your nose that you haven’t thought of?

By the way, do you know what the other side of that sign says? “WE ALSO DELIVER TO THE BALLPARK”.

If it’s not right, it’s wrong

440x380_acAwhile back, I was attempting to plug my phone charger into a dimly lit wall outlet in a hotel room. I wasn’t having much success, and only when I realized that the outlet had been installed upside down did I understand why. And not only was the outlet installed upside down, but it was also crooked and the screw on the cover plate had been torqued down to the point that the plate was cracked.

In any case, I got my charger plugged in and never gave it a second thought until a couple of weeks later when I spent a couple of long days in a meeting facility. I happened to notice that every single outlet and switch cover screw in the room were perfectly aligned in the vertical, even those close to the floor that you couldn’t really see.

This practice that makes things look a little better has a name in woodworking: it’s called “clocking”. But is it worth the bother in this case? It certainly doesn’t make any difference in the functionality of the product. And my guess is that I’m the only one who has ever sat in that meeting room and taken notice.

So in the scheme of things, is it a big deal? I think it actually is. It tells me that the electrician who installed these outlets took pride in what he was doing. He took that extra half second to get everything as perfect as he could even though the pay was the same. What’s more important is that I can pretty much guarantee you that all the connections and wiring behind that cover are first-rate and done with the same precision. The attention to detail inspired confidence.

When you think about it, that outlet isn’t much different than a wellhead. People can’t see what’s down in the well. They can’t see your splices or pump alignment or whether you’ve used a flow sleeve. They can, however, see what’s at the top. And if what they see at the top looks sloppy, well, they’ve got to wonder about what’s below. On the other hand, if the workmanship above the ground is precise and well-organized, chances are they’ll make the same assumption about the rest.

There are lots of analogies that we can draw from this, but to me it’s another example of what defines a professional versus someone who is just going through the motions. A professional is willing to take the time to get things right. Not just the big stuff, but the details as well.

That first electrical outlet that was upside down with the broken cover? I have no idea what was behind the plate, but it sure didn’t inspire confidence in the integrity of the rest of the product.

Opportunities abound

carlosNote: Tammy Davis, Director of Corporate Communications at Franklin Electric, provided this week’s post as a guest blogger.

Last week was spring break, and despite my daughter’s protests that “it didn’t sound exotic enough” (yep, that’s a quote), I took my kids to New York City to get a taste of the Big Apple. My son, a huge fan of the TLC show Cake Boss, immediately recognized the city’s proximity to New Jersey and campaigned for a jaunt to Hoboken as part of our adventure. Two trains and a short walk later, we stood in front of Carlo’s Bakery, home of Buddy Valastro the Cake Boss.

A few hundred other people stood in front of Carlo’s, too. Enough to make for a two-hour wait on the sidewalk. Even so, my kids enthusiastically confirmed that they indeed wanted to wait for the chance to get inside the shop; seeing it from the street wasn’t good enough. Thankfully, the weather was good and the people around us were pleasant, so we settled in to wait.

Not long into our confectionery odyssey, I looked up to see a man methodically working his way down the line, group by group. When he got to us, he explained that he worked for Fran’s Italian Deli, a local establishment that offered great sandwiches on the world’s best homemade Italian bread, cold drinks, and free delivery. In fact, he said as he handed us a menu on which he had written his cell number, he would be happy to deliver to us in line. As incentive, he added a discount code to the menu. I thanked him and told him I appreciated his inventiveness, and he moved to the next group of people.

Shortly after he left, I saw this man come back, this time with food. As the line progressed–the wait really was two hours long–I saw him several more times, passing out menus and delivering snacks, sandwiches, and cold drinks to my fellow Carlo’s groupies.

I loved it.

Here was a guy who didn’t bemoan a long line of people waiting to go to somewhere else. He didn’t begrudge the success of a fellow businessman and grumble, Why can’t this be me? Instead, he saw an opportunity, and he capitalized on it. He got creative, and instead of bringing people to his business, he brought his business to them. He assessed their needs and figured out how to address them in a way that meant success for everyone. It gave the people in line something to do, satisfied hungry bellies and thirsty mouths without forcing people to lose their places in line, and it gave the cash coffers of Fran’s Italian Deli an upward bump.

Now contrast this scene with a couple of the other storefronts along the same sidewalk. Employees from those businesses periodically came outside to shoo us waiters away from their doors to accommodate customers who might want to come in. Instead of seeing a potential audience, they saw a definite nuisance. What a missed opportunity.

Which kind of business person are you? The kind who waits for customers to come in? Or the kind who goes to them? The kind who looks for new and creative ways to satisfy people’s needs? Or the kind who does things the same way they’ve always been done? Food service or groundwater service, opportunities abound; go out and get them.