What if rising costs don’t have to destroy your margins—or your close rate?
With fuel prices climbing and input costs continuing to rise, many businesses are feeling the squeeze.
The challenge isn’t just protecting profitability—it’s doing so without constantly re-quoting, frustrating customers, or losing deals. relationships, and bottom line.
In this episode you’ll discover:
- How to protect your margins from rising fuel and input costs without constantly changing your quotes.
- Why adding a simple compliance cost buffer can create smoother sales processes and stronger profitability.
- How this strategy helps you avoid customer friction, maintain trust, and win more repeat business.
Press play now to learn how to safeguard your profits, simplify your quoting process, and stay competitive—even in uncertain times.
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This podcast helps the entrepreneur, founder, CEO, and business owner in the trade, construction and industry segments, regain focus, build confidence, and achieve measurable results through powerful sales training, effective sales strategy, and expert sales coaching—guiding every sales leader, sales manager, and sales team in mastering the sales process, optimizing the sales pipeline, and driving business growth while fostering leadership, balance, and freedom amidst overwhelm, stress, and potential burnout, creating lasting peace of mind and smarter decision making for every California business and Australia business ready to scale up with excellence in sales management , through refined sales processes, proven trade sales techniques, and strategic sales leadership that strengthens sales process execution, accelerates sales team development, builds stronger sales teams, improves time management for sales, drives resilience and results, increases team results across the construction industry and wider industry sales sectors, and supports sustainable trading growth that continues to drive results through an effective management process in modern trade sales.
Episode Transcript:
Ben Wright:
Rising fuel prices don’t have to take profit out of your pockets or lose you sales. Today, we’re going to explore why.
Intro:
Welcome to Sales Growth Made Simple, the show helping seven to eight figure trade, construction and industry sales and business leaders finally in the stress of inconsistent sales by simplifying your sales systems so your team can close more deals and grow faster
I’m your host Ben Wright and over the last 15 years, I’ve helped hundreds of trade and sales leaders grow their businesses and generate over $200 million in additional revenue by simplifying their sales processes.
Let’s Get Started
Ben Wright:
There’s no doubt that costs are rising globally, and it’s not just about fuel. It’s not just filling our bowels. It’s causing pain to many businesses around the world. It’s also our input costs that are rising and rising every day that this continues.
Unfortunately, as the war, and hopefully, it does resolve, hopefully, ceasefires that we’ve been having do hold. At the time that we go to air, things change so quickly that in a few days since recording we go to air, we never know what’s going to happen. Hopefully, it does resolve.
However, unfortunately, we are going to see some rises to fuel costs and input costs for a few more weeks and certainly months to come. Today, we’re going to explore how you can somewhat hedge yourself against these rising costs without needing to feel like you’re losing sales or even more importantly, needing to consistently re-quote and change your bottom lines. As we roll into this topic, I certainly have experienced drastically changing cost bases across my career, particularly in the solar industry where we had, well, in the solar industry, we often had price decreases and rapid price decreases at that, but we also had times when labour cost increases went up.
We had times when we had a rapidly falling Australian dollar and real turbulence in terms of our cost bases. What made it even more impactful was that often projects had a three to six-month lead time. We’d be quoting fixed price without necessarily being able to cover our input costs.
We certainly could cover some. We certainly could hedge USD, which we bought in to a certain extent, but we did not have cover on all of our input costs as we went through this journey of particularly those projects that took a little bit longer to implement. I really visibly remember a way that we were able to make sure we could continue to win sales quotes without being priced uncompetitively or worry about having costs shift on us once we’d run that deal.
The number one way that we did that was, first of all, when we had a rapid price increase and we had a body of work that we were installing, and now this may sound counterproductive, but jobs that were quoted and already rolling, we ignored them. We let them roll out, had peace that those jobs had a slight reduction in profit without a significant headache around how we were going to recover those costs from the customer. The reason that we did that was that at a point in time when jobs were rolling and customers got hit with variances, it caused a huge amount of stress, not just for the customer but for the business.
Invariably, what happened is, whilst we may have got a variance, our profit numbers dropped because we had to stop the job while we discussed the variance. We had to deal with a different requirement from the customer. They might have wanted something different in return for a variance.
We had to manage it in the back end. We had to spend time dealing with an unhappy customer. At the end of the day, during mid-project, to roll out cost increases became really difficult for us as a business.
However, what we did clearly understand was that we had a slight reduction in profit from those jobs because often we were midway through them and the impacts were modified or mitigated. So, we needed to find a way to deal with that moving forward. Yes, this is slightly different to our normal sales podcast today because I’m drawing on my experience of not only running businesses but also growing sales.
What we ended up doing as a business was we had a line that was called a compliance cost. The compliance cost was a percentage of our sale that went into every single job. It went into every single job all year round.
In this instance, our compliance cost was about 3%. So, every job had a 3% line item of flex that was allowed in there to deal with good, bad or ugly that happened with projects. Now, of course, 3% when something goes wrong often doesn’t cover it.
However, if you’re a business that’s generating $2 million a year in revenue and you take 3% across all of your businesses, that allows for $60,000 of cost overflows across the year. Of course, we had times when we had projects that were delivered below our targeted amounts and I always like to make sure they go to the bottom line. But in these instances where we had a compliance cost rolled in at a sales level, what we didn’t have to do was worry about rapid price changes with customers.
We didn’t have to worry about small fiddly changes to quotes with customers i.e. fuel goes up by 25%, 30%, 50% with an impact of a few percent to a project. We didn’t have to worry about pricing that in because we had that compliance cost always in there as a discretionary line item. It worked tremendously well for us as a business.
But above everything else, it gave our sales team confidence that we didn’t sweat the small stuff. And when you don’t sweat the small stuff, you’re able to get jobs done quickly. I had a customer earlier this week where their customer came into their office, they’re dealing in building fixtures and fittings, so tapware, bathware, that type of stuff and where the customer came into their office and they needed a few changes to their quotes.
Now, that salesperson wasn’t able to price that effectively there because they needed to get some guidance. So, in essence, rather than being able to quote that job or finalise that job on the spot, get a closed deal done and move on, they had a time lag right until the next day, in fact, to be able to get that pricing out, which whilst it may not have impacted that deal, it will in the long run impact deals. So, for me, what’s really important is that as a business, as an individual salesperson, as a team leader of a sales or a business leader of a sales team, that we are able to give our team a little bit of flex to be able to work with small changes or small cost price increases without burning deals.
So, my absolute clear recommendation today is to always have that discretionary line item that handles unexpected cost movements. And if you do move back to a business as usual trading period, keep that line item in there and let it accumulate over time because a 3% change on every job generally won’t lose you work. However, a 10 to 15 to 20% change will.
So, by having that buffer allowed across all of your projects, what we find is that we have sales processes that are smoother, happier customers, and I think really importantly in this instance is we have more repeat work because our customers recognise, for example, right now, if our customers, if you’re a trade business, right, in this instance, your fixtures and fittings in a building product, right, and they know that some of your prices have gone up but you haven’t impacted them with a major variance on the job, then that customer has built some trust with you and you are far more likely to get a great result with them moving forward, i.e., more business or even referrals. So, my main message from today, and thank you, I’m very grateful as always for you listening, my main message from today is that you can take a level of calmness into your quoting approach during this time of turbulence and simply roll in that line item of compliance cost. It might be 1%, it might be 3%, it might be 5%, right, it’s very rare I see projects lost over 5%.
Between 5% and 10%, it’s occasional and above 10%, it can become more regular when you’re not creating value. But certainly including that compliance cost into your quote is my strongest recommendation today. More importantly though, if you are spending lots of time wasted on sales quotes and you’re just not able to cut through to get decisions, right, they’re particularly hard at the moment because people have been putting their wallets in their pockets, if you like, and aren’t making decisions as quickly that I have a number of businesses who are wasting time on sales quotes.
But unfortunately, if they don’t change something now, they’re going to continue to get those same stressful results over and over again. So, my commitment to podcast listeners is we’ve got a free quote audit that will pinpoint exactly why you’re not winning these jobs and what you can do to increase your close rates and increase them quickly. If you click on the free quote audit link that’s in the show notes, you’ll be able to get started on that really quickly.
That’s it for today. Please keep thinking about being 1% better each and every day. It does make all the difference.
See you next time. Bye for now.