At a glance
Ron Williams runs Benjamin Franklin Plumbing and One Hour Heating and Air in Ocean City, Maryland: two franchise brands, about $5M in revenue, and seven private-equity-backed competitors within driving distance.
Ron has run franchises since 2002. He can't outspend the private-equity players around him, so he competes on local neighborhoods, home shows, tech-generated leads, and a team that thinks like owners.
“I had two goals. Take care of the customer to the best of our ability, and never have anybody ask me for a raise ever again. I believe both got accomplished.”
Hourly pay worked against him
His plumbers were good people doing good work, but hourly pay gave them no reason to spend time with a customer. It also pushed labor toward 30% of revenue, because a plumber who wanted help would call in a second plumber.
“On hourly, a lot of times you're just going to see the problem, fix it, and move on. They're going to take care of that one little problem, maybe a little add-on here and there. What's the incentive?”
The raise conversations never stopped either. Ron had spent four or five thousand dollars on other systems to fix the problem, and each one turned out too complicated to run.
A plan his plumbers could understand
Ron settled on 9% of sold revenue plus 9% of completed revenue, with hourly pay as the floor Maryland law requires. Paying on both sold and completed work keeps techs from passing jobs off and pushes them to finish the work the same week.
“It was just easy to implement. Once I made it easy to implement, it was easy for the plumbers to understand.”
What changed in two months
- Plumbers now spend an hour or more with each customer, and the average ticket went from $800–$1,000 to $1,500–$2,000.
- Plumbers earn an effective $55 to $60 an hour, up from a $25 base.
- Labor stopped climbing. A plumber who needs a hand now asks for the apprentice or does the job alone.
- Two new hires joined for the incentive plan, including an HVAC installer who left a much bigger company.
- Trucks get restocked every morning without anyone asking.
“They are now constantly talking about, 'Where are you at? What did you get? What's your numbers?' They're truly watching their numbers day in and day out more than I ever could.”
HVAC is next
Ron is bringing the same approach to One Hour Heating and Air. Installers will earn a percentage of each sale, with a larger share for the lead tech, which keeps labor in check on long installs. The HVAC techs have heard the plumbers comparing numbers and keep asking when theirs starts.
“I don't believe I could have done it without some sort of incentive-based pay.”
