Perry Mechanical Contractors treats customers to service in style as he builds a diversified and highly profitable contracting business
When John Perry struck out on his own 12 years ago, he saw that he could differentiate his business by providing “limousine service.”
“My theory is that people would rather ride in a limousine than a city bus,” says Perry, owner of Perry Mechanical Contractors in Lawton, Okla. “I take my customers out of the loop and take care of everything for them, so they don’t have to worry about a thing. That’s the concept I’ve built my business on, and it has grown by leaps and bounds.”
A primary part of “limousine service” is dealing directly with customers’ homeowner insurance companies. By doing that, Perry can tackle jobs right away, instead of telling customers his hands are tied until he hears from an insurance adjuster. He also gets estimates from and hires all subcontractors needed to make repairs.
“Say a lateral line collapses under a home’s concrete pad,” Perry says. (Homes in Oklahoma generally don’t have basements.) “The customer is usually petrified about what to do. But we take care of everything from the time we break concrete to the time we lay down new carpet. It’s a lot of extra work, but over the years, I’ve gained a lot of respect from homeowners and commercial business owners. So when the time comes to recommend someone for a job, they remember me.”
So far, Perry’s strategy has paid off handsomely. In his first year, he generated a $20,000 gross profit. In 2008, he totaled $2.5 million in gross profit, with just himself and his son-in-law, Kent Loftis. About 65 percent of the business comes from drain cleaning, plumbing repairs, and service and sewer lateral lining. Plumbing for new construction and fire sprinkler system installations contribute to the balance.
How does a two-man operation generate that kind of income? By combining the “limousine service” with aggressive marketing, comprehensive and diversified services, a penchant for saying “yes” to virtually every job, liberal use of subcontractors, and a hustling, can-do attitude.
A slow start
Generating six-figure profits seemed like a pipe dream when Perry went solo in 1998. Until then, he spent nine years as a business partner with a friend in a plumbing company. But his friend wanted to do new-construction plumbing, while Perry preferred repair and service work – he sensed that would be more stable when building dipped during downturns. So they parted amicably, and Perry launched his business.
“It was a big step – pretty risky,” he recalls. “I had to borrow a lot of money against my house and establish lines of credit with vendors. You need a lot of equipment and supplies and capital to run a new business. The first six months were the scariest, from August through Christmas. It was slow enough that making payroll from week to week was very difficult.”
Perry had an important ally: a little marketing moxie. Using a copier at home, he developed a flyer that promoted his services. Then he went around the city, looking for parking lots with vehicles where he could stick his pamphlet under windshield wipers.
“I put those flyers on every vehicle I could find in parking lots,” he says. “I went to malls, Wal-Mart, the local airport, everywhere I could find vehicles. It was important because the flyers promoted Perry Mechanical as a one-stop shop that takes care of projects from concept to completion.”
So how did Perry develop his marketing savvy with no formal background? By carefully observing how other businesses operated. “I worked for enough people to see guys who didn’t market themselves fail, and see that guys who did market themselves succeeded,” he says. “I learned by watching.”
Customer service 101
Perry believes in top-notch service, and a big part of that involves teaching customers about sewer lines and following up after jobs to make sure customers are 100 percent satisfied.
“The more you can inform customers, the better off you are,” he notes. “At some restaurants, for instance, employees just don’t know they shouldn’t put certain things down the drain. Or that if you put certain things down the drain, you also need to run a lot of hot water behind them to prevent clogs.”
When he finishes a job, commercial or residential, he tells customers they can call him any time, day or night, if they have any questions. “If I can answer a question or diagnose a problem over the phone, I can save them money,” he says. “If I have to come to their house, then I have to charge them money. But if I can help them out over the phone, they remember that the next time they or a friend or neighbor needs help. All that stuff comes back to help you.”
Perry also guarantees all his work for one year. He has never had to return to a job for anything major. “It may cost them serious money to fix a problem, but they have no problems when I walk away from a job,” he says.
Diversification is another key to Perry’s success. He’s always on the lookout to expand his services to fill a void. For example, he saw a pipelining demonstration at a trade show and immediately thought it was something he could market. “It cost me $13,000 to buy all the equipment,” he says. “It was a calculated gamble. You can’t make money if you don’t spend money.”
Perry told a couple prospective customers he would line their laterals for free if they would let him test his new equipment. He selected people who were “opinion makers” in town. In other cases, Perry started installing heat-activated sprinkler systems in homes to complement his new-construction plumbing work. He also added swimming pool inspections when he started getting more and more calls for clogged pool drains.
“You have to be diversified to succeed,” he says. “The bottom line is money. If there’s demand for a service, and no one provides it, there’s money to be made. If I don’t do it, someone else will. I never thought about installing sprinkler systems until I saw no one else was doing it. Now I do two houses a week.”
Can’t say no
Perry rarely says no to a job, even if he’s never done it before. He compares saying no to a woman who turns down a marriage proposal, then never gets asked again.
“If you turn down the chance to do a big job, odds are that you’ll never hear from that customer again,” he says. “If it’s something completely new, I try to think outside the box. I ask, ‘Why can’t we do that?’ There’s not a job I’m afraid of tackling, as long as I do a lot of research. We’ll take on jobs that no one else will accept.”
That means Perry also doesn’t mind traveling, as long as the money is right. He recently took on a large project in El Paso, Texas, about 12 hours away. And in 2010, he plans to travel to Guam to work on a project he found out about while enjoying his favorite hobby: scuba diving.
Because he only has two employees, Perry relies heavily on subcontractors. After once employing as many as 38 people, he prefers spreading the wealth among other contractors.
“There are times when I hire subcontractors to pump septic tanks,” he says. “I could rent a truck and do it myself, but it’s cheaper to hire someone else to do it, because at the same time, I can do another job somewhere else. I’m making money on both jobs, and the subcontractor makes money, too.”
He does own a substantial fleet of equipment. It includes two service vehicles (a Ford panel service van and a Ford F-350 pickup truck) and a variety of equipment from RIDGID: five K-50 sectional machines for smaller drains; five K-1500 sectional machines for 2- to 8-inch pipes; a K-7500 waterjetter (1,500 psi/3 gpm); two Mini-SeeSnake cameras; and two SeeSnake cameras. He also owns an Insta-Cure pipeline lining system from Nu Flow Technologies Inc.
Sky’s the limit
Perry firmly believes any business that puts its customers first and considers all their needs is bound to succeed, and make good money doing so. “The ability to make money in this business is limited only by your ability to think outside the box and be self-driven to satisfy your customers’ needs,” he says.
“It all works together. We make money. Our clients are happy. And we help local subcontractors make a living. It makes for wonderful relationships, and I sleep well at night.” That’s what happens when you hitch customers up with limousine service.