The following transcript is provided by YouTube. Mistakes are present. To hear the podcast episode, click HERE.
[Music]
scaling nation you asked for it and it is here so many of you are taking the
certified water technologist examination and you’re wanting to get better
information on how to better answer the mock exam now this is the exam that you
get when you sign up for the cwt exam
well i have heard your request and i’ve done exactly that i have recorded a
class that has exactly what you’ve been asking for it is me answering each one of the
questions and letting you know why i chose certain answers and of course
everybody wants me to do math and i do all the math on the mock exam so you can
see how to get the right answer and i hope this is something that will help build your confidence so you can get
your certification you can go to scaling up h2o.com forward slash cwt prep once
again that’s scaling up h2o.com forward slash cwt prep get out there and get
your certification today
welcome to the scaling up h2o podcast the podcast where we scale up on knowledge so we don’t scale up our
systems i’m trace blackmore i host the scaling up h2o podcast and i want to welcome you
to today’s show and i think you’re going to enjoy this show i think this show is
going to bring some light on some things that cause a lot of us some heightened
anxiety this is a pinks and blues episode and what that means is that is when
i go to the scaling up h2o mailbag and i see what you the scaling up nation
members are asking about what are the things that you want me
to talk about and then i answer those questions right
here on the podcast and i love those shows because it’s interactive you’re telling me
exactly what you want to hear and i know i’m bringing you the
information that you are waiting to devour as you are driving from account
to account so i love that relationship if you have not done what we just
described well shame on you how am i supposed to do this show
if you’re not out there doing your part i need to know
what you want to hear on this show and you’re probably saying trace how in the
world am i going to get that information to you and that’s a great question and
it is such an easy solve here’s what you’re going to do
you’re going to go to scalinguph2o.com and we have not one
but two easy ways that you can get that valuable information to me you can navigate over
to our show ideas page and you can let us know right there the other thing you
can do and this is my favorite on the right hand side of the webpage you will
see a button that says leave voicemail and on your favorite device with a microphone
you can ask your question right into your device and it will send that
directly to me we’ll even play your voice on the air
asking your question i can’t wait to hear that from you and you’re probably wondering what are
some things that are going on well the thing i’m most excited about is
we’ve got another hang coming up april 14th folks if you have not experienced a
hang i got to tell you it’s one of my favorite things to do a hang is where we
get together as professional water treaters and people that serve the water treatment industry and we just hang out
for one hour we do one every single quarter and we started doing that back
during all the stay-at-home orders during the pandemic and making sure that
we were networking making sure that we were connecting with each other and it has just been so wildly successful and i
enjoy doing it so much we continue to do that and we do one every quarter the
next one is april 14th so what you need to do is go to
scalinguph2o.com forward slash hang you can register for that zoom meeting
and i know what you’re saying trace another zoom call i am zoomed out but
this one’s fun this one we get together in a big zoom room and just like normal
and then i put you in breakout rooms and now you’ve got a really small group that you can introduce yourself to and you
can learn more about the other people and i promise if you show up and you
introduce yourself and you participate you will find people that will help you
with a future problem you will find people that are going to become your new
friends why wouldn’t you attend this folks it’s so much fun and we always
play some sort of game at the end of it a lot of people tell me that is their
favorite part of the entire hang of course always valuable prizes with those
games not really it’s just a lot of fun so folks i hope to see you on april 14th
but here’s some other events that you probably want to mark on your calendar
march 27 through march 30th the american water works association is having their
sustainability water management conference in denver colorado this
conference is made to bring together all the water sector organizations and
professionals to discuss all aspects around water management to learn more
about the sustainable water management conference you can go to our show notes page at
scalinguph2o.com and it will be right here on this show by the way this is
episode 243 wow how did that happen
next week we will be celebrating world water day on march 22nd the theme is
groundwater making the invisible visible now next week i am going to help you
celebrate world water day on march 22nd with an episode a special episode with a
special guest and if you remember on episode 236 reed
hutchinson introduced us to an organization called team world vision he
also told us that the average person that does not have access to clean
drinking water has to walk six kilometers in order
to go get and bring back that water we also learned that a lot of times the
water sources where they’re walking to aren’t that great so what do we do about it well i’m going
to ask you to listen to next week’s episode and we’re going to talk about
something fun we can all do as a scaling up nation
we can support each other and we can support our most valuable commodity on
this planet and making sure that more people have access to it heck if we all
bond together maybe we can make sure everybody has access to clean drinking
water wouldn’t that be amazing so nation tune in next week and i will
bring you more information on that so before we get to our topic
let’s hear from james mcdonald with a new installment with thinking on water
with james welcome to thinking on water with james
the segment where we don’t give you the answers we give you the topics and questions for you to think about drop by
drop now let’s get to it in this week’s episode we’re thinking about the dangers of our job and how we
can be safer industrial water treatment has inherent dangers that must be acknowledged and
managed from hot pressurized boilers acids and caustics to confined spaces
energized equipment and environmental exposure do you think about your safety every day
you are the first line of defense in your own safety after all what resources do you have to not only
learn about any dangers but also how to manage them take this week to think about your
safety in the impact not just upon you but upon those around you as well
be sure to follow hashtag tow22 and hashtag scalinguph2o share your
thoughts on each week’s thinking on water i’m james mcdonald and i look forward to learning more from you
safety is so important a lot of times people think they don’t have time to do something
that will make them safe well folks imagine if you had an accident we don’t
have time for that if we didn’t have time to do something that would have prevented the accident so just keep that
in mind nation as i mentioned at the top of the show i love doing pinks and blues
episodes because these are questions that i am answering that are coming
straight from you now this isn’t a question from one person it’s not a question from two
people it’s not a question from three people dozens of people
have asked me this question some of them did voicemails and i didn’t
want to single just one person out because so many people ask the question so i’m just going to tell you what the
question was and it was around price increases people in our industry are so concerned
about all of the increases that we are getting and how do we pass that along to our
customers and what are all the consequences that can happen when we pass that along to the customer well we
all know the one that we’re scared of we’re scared about losing the business so i thought today
we could talk all things around price increases and and why now more than ever
we’re seeing those price increases from just about everything that we are buying
and what happens if we don’t increase pricing and what does that mean for us
what does that mean for our company what does it mean for our customer so we’re talking about price increasing
we’re not talking about price fixing so that is definitely not what we’re talking about we’re just talking about responding to the market and responding
to all of the things that happen of course we’re seeing a lot of things happen right now with the climate that
we’re in but folks a lot of these happen all throughout the year and every year
and some of us don’t give consideration to that maybe some of us are still doing our
pricing based on 1980s pricing geez i hope that’s not the
case and maybe there’s some people out there that have never given a customer
a price increase because we know that there’s always a company out there that can do it cheaper
and what if we lose the business well that might not be the worst thing
depending on how you’re looking at the full picture
so if we talk about pricing and again this is not doing anything with price
fixing this is doing everything with simple economics as you and the scaling
up nation know i have the honor the privilege of working with several water treatment
companies and some of the things that i do with them is i help them run their leadership meetings i help them put
together a strategy and map out the function of their company and making
sure that all the different departments are working well together and things are
getting measured and everybody is on the same page i also do water treatment
consulting that allows me to do some product formulation with people or maybe we’re doing some account review or maybe it’s
some water treatment training maybe they’re studying for their certified water technologists and we’re talking
about some things that they need to make sure that they know if they’re going to sit for that
very valuable designations exam i also look at asset control
and that includes inventory and like what we are talking about today
how to price that inventory how to price your services
so what are all the things around how you actually come to
a price and think about actually obtaining something getting it in your facility and
everything that has to happen to that for that to go on site to the customer but we’re in
water treatment it doesn’t stop there we now have to bring a bunch of services
along with that even though we’ve already delivered that product so there is a whole bunch of
items that have to happen that at the end of the day we need to get paid for so we can
continue doing those things now i was joking earlier when i said there
were water traders out there that had 1980s pricing but i do know that i have seen several
companies that really have not changed their pricing from the same pricing they have
had from the early 2000s folks let’s look at all of the
things that have happened since that time so labor raises i hope
you have gotten a raise since that time well somebody has to be paying for that
where is that funding coming from of course we probably grew our company
so we had to hire new people we had to bring on more stuff to support those people we had to do all of the things in
the office to make sure we could support that all the things around making sure
our workforce can work we had to train those people of course all the
transportation costs maybe that’s you getting to and from your accounts maybe that is getting the products to
and from where they need to go maybe it’s a combination of all of those things we’ve probably had rent increases
since then insurance has gotten more expensive we might have been required to have even
higher insurance since that time our utilities have increased and then
many of our customers are requiring us to pay for services just to allow us to
do business with them a lot of the software that we use have had price
increases and most of the software no longer allows us to buy it once and
then decide when we are going to upgrade it we now have to go to a subscription
service just to have that software of course gas prices are a lot higher than
they were the raw material pricing themselves so being able to buy our products that has
gotten a lot more expensive of course we’re going to be talking about that today the containers that we have to put those
products in have gone up tremendously and folks i can go on and on and on
there are so many things that we need to purchase in order for us to do what we
do and each and every year it gets more expensive to purchase those things
so with that being said we need to look at making sure we’re doing regular price increasing
just to keep up with all of these increased prices
if the company is not making a profit we are not in a healthy company
all of that being said strong companies are constantly evaluating how much money
is coming in how much money is going out and is that acceptable for what the
company needs to make to be able to support all the things the company
needs to support when prices go up a healthy company
needs to increase their pricing now i know for a fact somebody is screaming
into their car speaker right now listening to this podcast saying that trace my customer will not
accept any price increases and if i even hint that i’m going to give them a price
increase i’m going to lose the business so we’re going to talk about that
objection right there and that whole list that i just listed
we all know your customer is experiencing all of those things too
so they understand everything that is going on because they
are living all of those things but let’s just say that isn’t enough one nation we are in a
supply chain breakdown right now and it is a perfect storm there are
things coming together that are making our wares more expensive than they have
ever been those things are we have a raw material shortage
shipping costs are at an all-time high and it’s taking longer than ever for
those shipments to get to their destination put all three things
together and it’s that perfect storm that we are seeing right now let’s talk about the supply chain
materials shortage issue if you go to a grocery store you will
see empty shelves just the other week my wife and i went to walmart and we were in the freezer
section and two-thirds of the entire freezer section was empty it was very apocalyptic very
scary we’re also noticing that the things we buy every day are getting more
expensive water treatment is just like your local grocery store we’re all seeing that less
product available to sell from our supplier means that we either can’t get it
or the cost for those products are going up and some of those products are really
going up in price we get a good amount of our raw material imported from china
and right now china has reduced the amount of manufacturing they’ve done
with many of the raw materials specifically i’m talking about phosphate
production now i’ve heard after the winter olympics they have started increasing some of the
production but i don’t think it’s back to where it once was most of our products do contain
phosphates in some form or another so there is no doubt that you have
already felt this pain just the other day i received a letter from one of our vendors that stated
almost a 13 price increase for some of the raw
materials that we buy that go into almost every single one of our water
treatment products 13 now you hearing that and me reading that
at first you might think that is crazy that is just
unreasonable if the material is not available obviously the price is going to go up
but that’s not all that’s going up shipping costs are going up
if we were to analyze shipping costs not too long ago a shipping container that
was shipped to the u.s from china cost roughly around 3 000
to ship and a cargo container holds roughly around 40 000 pounds of goods
and let’s say that container is carrying all of our water treatment raw materials
well that container today if we were to ship it is going to cost around thirty thousand
dollars to ship that’s 27 000 more dollars to ship
the same container now if you were to divide 40 pounds into 27 000 which is
the difference we would find that just on shipping alone that raw material
would increase 68 cents per pound
68 cents per pound just for shipping we’re going through some
incredible things right now now add to that container it’s taking
that container way longer to get to its destination it’s taking longer for it to
get loaded on the ship to bring it over here and then that ship is sitting out
in the harbor longer waiting to dock to offload that cargo and then once that
cargo is offloaded it’s sitting in the shipyard
longer before it’s getting trucked to its destination where it gets put out on
the shelves where you and i can buy it or in our loading dock where you and i
can blend it on average it used to take about three days for something to arrive
in the united states at one of the ports and get on the shelves on one of our
stores so we can buy it and i just read an article that said it’s taking almost a month to do that
now that is just amazing and we have never seen anything like that
so all the costs that are involved with getting that product to where it needs
to be it is costing so much more than it ever
has and somebody has to pay for that now if you’ve bought anything in the
grocery store lately you know that you are paying for that and if you bought any raw materials to blend water
treatment products lately you know you’re paying for that too but how long can you pay for that
and sustain a healthy company now let’s renew our previous objection for those
of you out there that were screaming into your speaker by the way i didn’t hear that i just know that that’s
probably what some people did and you said i cannot increase my prices because
i will lose the business well of course to talk about that i’ve
got to bring out my favorite book the seven habits of highly effective people by dr stephen covey of course i’ve gone
like what two episodes without talking about that book again my favorite book a quick summary the seven habits of highly
effective people are habit one be proactive
habit two begin with the end in mind habit three put first things first habit
four think when when habit five seek first to understand before you’re understood habit six
synergize and habit seven sharpen the saw the first three habits are what we do
for ourselves the next three habits are what we do when we encounter and work
with other people and then habit seven kind of circles all those habits together and make sure that we can
continue doing those habits so in order to talk about that objection
we have to talk about habit four which is think win-win i have to have the
mindset that i need to have a win in order for whatever i’m selling to be
healthy for the company for me for all the stakeholders involved and whoever is
buying that the customer they need to have a win to so they’re getting all the things that
they need and if both people feel that they have won that is a sustainable
long-term relationship and i hope everybody understands that anything that
is not a win on both sides if i lose eventually i’m not going to be able to
perform something if the customer loses eventually they’re going to get fed up with that and then
they’re not going to allow you to do the business so there is no other relationship out
there that will work long term successfully without both sides winning in the case
of price increases if you pay too much and charge too little
your company will not be able to sustain paying for all of the things it needs to
pay for to stay in business and that includes paying you
if that happens you go away maybe the company goes away and
ultimately not only does the company lose but the customer is going to lose
as well i know that’s a worst case scenario but i think you can see my point
we have to make profit in order to stay in business in order to do all the
things that we need to do to make that customer get a win for them
we have to make profit that’s not a dirty word that is something that is essential in
order for a company to stay a viable company now you can work for the most
altruistic company on the planet but guess what no margin
no mission we have to make sure that we get a win
so we can help our customers win too our valuable services allow our
customers to operate their equipment longer and for less operational costs
when we do everything that we’re supposed to do and we do it right our customers pay less overall
if they look at their overall operational budget and if we were to divide that overall
operational budget into a pie chart we would see that the smallest sliver of
that pie was what they were paying for water treatment but here’s the neat
thing that smallest sliver of pie affects
the rest of that pie and if it’s done correctly it can minimize cost if it’s not done
correctly repair costs go up maintenance costs go up operational
costs go up replacement costs go up and the list goes on
folks we are providing one of the most valuable services our customers have
in their entire facility and a lot of times we don’t talk about the value that
we bring to the party and all the things that we affect because of what our
products do because of what our service does and if you are not speaking
regularly with your customer having conversations letting them know what you are doing and why you are doing it and
what the effect of all of those things being done is bringing to that customer
i can see why you would be a little nervous having a price increase conversation
with the customer but the price increase is not the issue here
it’s just going to amplify the fact that you have an issue
with the relationship now for all of those people that i heard earlier on the podcast that were
screaming back to me saying that they were going to lose the customer if they told the customer to
expect a price increase i hope you’re looking at things a little bit
differently now and you know what if you explain everything that we just talked
about with your customer and you have a good relationship with your customer your customer will understand as we’ve
said before all the things that we’re paying for that are costing more money your customer understands that too
because they’re going through the exact same thing once they understand all the reasons
around why there is a price increase and they take in consideration
how much you provide them with your top-notch service and all the things
that come along with that i truly think that that’s not going to be as hard of a
conversation as you think now let’s visit some of the issues if
you haven’t provided good service or maybe you don’t know the people’s names
that work at that facility well folks you’ve got a problem there but it’s not the price increase as i just said it’s
because you really haven’t kept that relationship up or maybe you haven’t
been doing all the things that you should have been doing and maybe you
should lose the business now i don’t want anybody to lose business but if you are not earning it
each and every time you show up on site i know of so many incredible water
treaters out there most of the people that listen to the scaling up h2o
podcast i am describing you you do your job extremely well you bring value to
your customers and they love and appreciate you for it if you are not one
of those people folks you probably shouldn’t be in this business i mean there are lots of jobs out there and
there is no shame with you saying i just don’t enjoy it and that’s why i’m not doing a good job maybe i should find
something that i enjoy or maybe for some reason you are not
challenging yourself if this sounds like you i don’t want you to be embarrassed i want you to know
thyself and i want you to have a conversation with is this something i can fix
do i know somebody that can help me fix it and let’s put those things together
and let’s make sure that it does get fixed now if you say i just don’t want
to be here do us all a favor but especially do yourself a favor life is
way too short if you don’t love being a water trader i love being a water
treater i love telling people my story about how much i love being a water treater and if that’s not you find
something that you will love and go do that i promise you will thank yourself
for that so with all that i hope you see that maybe the conversation is hard not
because of the price increase but some of the other things around the price increase and if you’ve truly been
working within a win-win with your customer you can explain everything that
we talked about today and folks the right customer will
understand now right customer is someone that takes
your counsel that asks for your counsel they let you know if there’s a new device that’s going in
maybe they even ask for your opinion about that device when you say they need to do something they take care of it
they value you as much as you value them
they appreciate you because they see your value and this is somebody that you have a
good relationship with it’s one that cares about your
well-being just like you care about their well-being a wrong customer might say i’m not
paying anymore you need to keep the same price and then you have to figure out do i
want to keep this customer now maybe this is a customer you do want to keep
maybe it is a right customer and they are just having budget issues maybe they
can’t afford what you’re offering you now need to decide if you can still
do the same type of service that you are doing for a dramatically lower cost
because again we are seeing increases in everything we are buying and everything that we are doing
more than we have ever had at least in any amount of time than i have been in
the business if we can do that i don’t think we can do it for long i really don’t think
that’s healthy i don’t think that you can do it so i want you to consider that
you’re not doing that customer a favor if you’re turning that into a lose to
you trying to have the customer win because eventually that lose is going to
translate over to them something’s going to fail or at the very least you are going to resent going to
that customer because maybe you’re doing it for free now you’ve taken your commission out and now your family’s
suffering for that so it has to be a win for everybody
maybe something you can do is you can look at the whole menu of services that you are offering and maybe
you can take something out now i know it’s hard to take something out when we’re doing something
but if they can’t afford it we need to look and see how valuable it truly is
based on their ability to pay for it and come up with some sort of arrangement there and maybe you can make that work
maybe you’ll decide we have to do everything the way we’re doing it in order for this program to work and folks
if that’s the case don’t be scared to have that conversation the more
information your customer knows the better decisions that they can make they
will come to better conclusions with the more information that you give them and
they probably are going to have to talk with somebody else folks just like you explaining all of this
stuff to that customer offer to go with that customer and whoever their upline
is have that conversation with them too you’ll have your contact there that
you’re working with on a regular basis they’ll be able to talk about how we cannot lose this person’s services
they’re experiencing increases just like everybody else and we have to have them
here how do we make that work that’s a right customer and if you’re
doing all that that means you are a right vendor for them now when you have a conversation around
price increases you have to do it in a way that suits the relationship and you know your
relationships with your customers better than anybody else so maybe an email is
fine if you have a really really strong relationship and to borrow from the seven habits of highly effective people
if you have a really high emotional bank account i love that metaphor what that
means is if you do so many things to help that person every time you do
something is kind of like putting a deposit into a bank account so you have this high balance of trust
within this person’s account so if you do something that’s maybe a mess up you
can do a couple of those and it’s not going to hurt the relationship but if you haven’t done all the things
to make those deposits of trust in that person’s emotional bank account it’s
very easy to withdraw more than the balance and go into an overdraft
situation and when that happens normally that’s when people aren’t happy and they
do things that won’t make you happy so maybe you can just evaluate what the
emotional bank account is and if it’s super super super high maybe an email is
fine this is probably the least of my recommendations just to just
send a blanket email out i think it’s very impersonal it doesn’t take advantage of all the things that you
have done with the customer but you know the customer better than i do maybe this is a well-written letter explaining
what’s going on and that’s placed with a previous invoice before price increases
take effect maybe this is a phone call maybe it’s a video conference or maybe this is face
to face we still do those right you know your customer you know the best way to deliver this information and now
after this conversation that you and i have had on this podcast i hope you know all the things that you can tell your
customers that you are experiencing so you can have a better conversation
giving them better information to make better decisions a price increase to respond to
everything that we talked about today is just simple economics so look at this
as a simple conversation but a well-prepared conversation
that allows us to have a win on both sides
now we’ve done a few shows around this topic before episode 221 when we did in
fourth quarter of last year if you want to learn more about some of the
specifics around supply chain issues check out episode 221
and we had several experts come on the show and explain exactly what we were seeing in the supply chain
and then on episode 223 we invited mike standish of radical polymers on and he
spoke about possibly reformulating some of our products if we were not able to
get some of our raw materials or maybe some of our raw materials have gotten so expensive we can’t afford to buy them
anymore or our customer can’t afford to buy them anymore so that’s episode 223
if you want to get some more information and go a little bit deeper into this
topic i love being able to refer you to previous shows for more information
it’s my hope with almost 250 episodes in the scaling up h2o
archives that you can find more information on just about any topic
that you want to learn more on i’m sure there’s probably a topic out there that
i haven’t covered yet i know there’s dozens probably hundreds thousands of topics out there that i haven’t covered
yet but i want you to tell me about it now i start at the top of the show saying we would have not had this show
had so many people not written in or sent me voicemails asking me to talk
around this issue to make it easier for people to understand what was going on
and then what they should do about it and how they should have those conversations
this wouldn’t have happened if those people didn’t do that and the show that you are thinking about that you want me
to put on that i don’t know about that’s never going to happen either if you
don’t go to scalinguph2o.com and either leave me a voicemail or go to the show ideas page
so folks please help me out with that and let me know what you want my next
pinks and blues to be nation i know these are hard times but
if you look over our industry our industry has been here for a very long time and our industry
really is needed people need industrial water treatment or our modern society
just grinds to a halt so i don’t think we have to worry about ever our industry
going away but right now just like everybody else we are suffering with these supply chain issues
we’re suffering with pricing that’s been higher than it has ever been throughout
history with all this information hopefully you’re understanding that better your customers are understanding
it better and with all of that i wish you luck with those conversations
i think you should be having conversations with people that you manage to make sure that they understand
everything that your company is doing right now and what you expect for your
people to be doing and for those of you that are managed by somebody else and you haven’t had a conversation like that
i want you to initiate that conversation with your supervisor
so you can get some more information and get some guidance from them because we shouldn’t be on our own
through this and if you have a valuable friend or multiple friends like i do that is in
the water treatment industry talk to them see what they’re experiencing and how they’re doing some of these items by
talking with each other we can support each other we can make each other better and that’s what i hope to do with each
and every episode of scaling up h2o and folks i’ll have a brand new one for you
next friday have a great week folks [Music]
scouting up nation if you keep doing the same things you’re going to get the same results and that’s why joining a
mastermind like the rising tide mastermind is a game changer in allowing
you to achieve different and better results you have an entire team that
combines to help you get to where you want to go
the rising tide mastermind is the catalyst to your next level of success
to find out more about the rising tide mastermind go to scaling up h2o.com
forward slash mastermind
you