154 | Why Pricing on Your Website is Non-Negotiable in 2026 | Paul Redman of Contractor Commerce

Yeah, Justin, nice to meet you and thanks for inviting me and looking forward to the conversation.

So we're going to dive into a little bit of what, what your business does, how it got started. And, before we dive into that though, I've got to ask the question. You worked for a manufacturer for a little over 10 years. What was that moment where you went, okay, contractors are missing something. What, was that moment like?

my gosh, I had so many moments. You know, I worked there for 10 years and I worked in the field. I was a field sales rep or a territory manager as they call it. And ⁓ there were moments early, early in my career where I recognized that the way consumers buy things and the way contractors sell things and the way manufacturers want things to be sold, it's all kind of convoluted and there was a lot of bottlenecks. And so that was kind of like the first realization early, early along. And this is, gosh, like almost 20 years ago is that the process is a little bit broken. And of course, you know,

Since then, cell phones and internet, now AI has changed everything. ⁓ But then I'd say that the real big realization was I had the opportunity to move down and work in the corporate office for a couple of years. And I spent two years, I like to say that that role was simply just learning. And I worked for who went on to be the vice president, general manager of the entire business. And I got to follow him around for two years and I worked on an e-commerce project and really started connecting the dots on

how things are bought and sold and transacted in the trades. And so I didn't realize it at the time, but during that period of time, was, it really shaped my idea of what was possible for contractors, what was possible for homeowners, what was possible for manufacturers. And so then, you know, fast forward when I meet a guy like Will Hausch, a couple of years later, the stars just aligned and it was like, yep, the world has changed. It's not going back. And so let's do this.

That's awesome. So for anybody listening who doesn't know what you guys do, give us a high level overview of what, what, does your business do? How do you help contractors?

Yeah, so Contractor Commerce is the industry's first ⁓ platform that has created like, you know, online shopping for contractors and homeowners and said another way, like homeowners and people shop for everything online, but no contractor has an online store. So we set out early when we launched the company to just create the platform that made it technically possible, legal, ⁓ a wonderful customer experience to be able to make transactions happen between a homeowner

and a contractor directly on a contractor's website. So that was kind of phase one of the company. you know, early along when we'd start working with, know, sometimes it was just, sometimes it was a private equity companies and the public companies, of course, but a lot of really innovative, innovative contractors came to us and said, Hey, we want to do more because in the first iteration of our product, we only allowed people to sell and transact on things like air filters or IAQ products, things that a homeowner might.

be able to install on their own. But our customers wanted to do more. They wanted to sell fully installed systems directly on the website. So we've kind of migrated from the ability to just handle a transaction of a filter that we handle the shipping on and all that. That's another story that I'm happy to jump into. But where a homeowner can go online and actually purchase a fully installed HVAC system, water heater, generator, home filtration system, whatever it might be directly from a contractor.

That's what it's become and it's been ⁓ quite the journey from launching it with a couple of customers who were kind of early adopters to now kind of scaled across home services and going into other categories as well.

Okay, that's pretty cool. So I did not realize that you guys were in on the plumbing side and getting into some other ones. That's really fantastic. So what size company do you feel like you guys are really a good fit and you're able to help grow? Like what is that either revenue? Well, probably revenue is probably the best word.

Yeah.

You know, revenue is a good proxy for this, but it's tricky because really the thing we're looking for is does the owner of this business have the ability to enact change within their organization? Because a lot of people sign up for things and we have to watch it. We have to guard ourselves against this. Like some people are just habitual technology shoppers. They go out and they just buy things and sign up for things and add it to the website or whatever, but they don't really ⁓ create change within their organization. ⁓

Yeah.

Even though, you know, onboarding with Contractor Commerce is super easy and it only takes a couple of meetings with us and we do a lot of the heavy lifting. Like there's a fundamental shift that needs to happen inside of a plumbing company, an HVAC company or electrical company, whatever it is, because they're going to let their customers now go further through the buying process on their company website at two in the morning. And that's a different type of lead. It's a different type of conversation. It's a different type of funnel that didn't exist before.

So really just getting that buy-in and just over-communicating, why are we doing this? Why is it important to our customers? How do we communicate? How do we handle these leads? Things like that. So to go back to that, to tie it back to revenue, we find that companies that are four million and more have demonstrated what I call escape velocity. They've gotten out of the rat race of just fighting fires and trying to stay in that small category.

They've been able to put systems and processes and people in place to grow and scale. That's kind of our sweet spot. But ⁓ yeah, I would say three to five million is right as a minimum. this is the same technology that's being used by billion dollar private equity platforms across the country, most of which are using contractor commerce. So yeah, but I say that to say, man, there's some hungry, scrappy startup companies out there who've latched onto this and just done really, really well.

Yep.

So you mentioned, mean, we always call it shiny object syndrome. And I imagine a lot of the listeners are like this. ⁓ that's me. Because, because it is easy, right? Like you, you go to a trade show or you listen to a podcast and you just, you're like, my gosh, this would be really, really good. And you sign up and you're like, and listen, I think, I think the con I think contractors have the best of intentions to fully dive all the way in, but then

business happens and life happens and they end up with a lot of half projects when it comes to technology for sure. ⁓

Exactly.

that's why we've been really careful. Because of AI, you can now serve a lot of contractors without having actual people, but we've kept our people in place to make sure that we've got hand-to-hand combat with our customers so that they feel supported and taken care of and kind of shepherd through the process.

So I think the challenge is still so many contractors out there have this skeptical mindset about this. And in my head, I think it's their fear of their pricing. I think so many are scared, but what are some other reasons that you see that contractors are a little bit hesitant about jumping on board, full board, and just showing all the goods to the customers?

Yeah, there's two primary things that, at least in the early days of contractor commerce, that contractors were worried about. One of which was, my competitors are now going to see my price and they're just going to lower my price. Or they're just going to lower the price and undercut me. I like to point to the auto industry. The auto industry went through this many, many years before we did in-home services. And this idea that consumers would want to shop for cars online was scary because

If this dealer shows that this car is 399 and the next dealer next door is just going to show it for 35, five, 38, five, whatever that is. Right. ⁓ but that really didn't happen. Like consumers still go to car dealerships and buy cars. And yes, of course they buy some online, but it wasn't like the end of car dealerships. Like people still, you know, use the digital tools to get further down the path and then engage with the human being to finish the transaction or whatever. So

The first fear was competitors seeing the pricing. The second one is that consumers would not be able to, that the contractor would not be able to build value with a consumer, that it just becomes a transaction. It just becomes a price shopper, et cetera. The reality is consumers are looking for price the moment there's a need. They want to reduce their uncertainty. They want to reduce their anxiety. So they go online, they start searching for pricing. They start finding tools out there that are lead.

aggregators, home advisor, Angie list, thumbtack, I could keep going on and on. ⁓ Or what's happened in the last kind of 18 months, like this is top of mind, is they're going to AI agents and they're having AI do the research and those sorts of things. you can't really hide from it anymore. you know, this, the purpose of this call isn't to talk about AI search. Everybody's talking about AI search. But the reality is if a consumer is going online and they're engaging with whether it's chat, GBT or Claude.

Yeah.

to try to reduce that uncertainty and anxiety and going through that pricing and consideration conversation with an AI agent, it's got to find the pricing somewhere. So the time's kind of up. so I was on a call with a contractor yesterday, Angaro & Sons in Northern California. And they said to me yesterday, they're like, there's no going back. Like you've got to have pricing online. It is non-negotiable. What it looks like, what the form factor looks like, what the integration of AI and technology looks like is

You know, that part can be negotiated, but the, the core idea of having pricing online, it's just, it's non-negotiable at this point.

Well, and I think your example of the car dealership is a perfect example because there is so many options. And I think a lot of times what customers end up doing is when they're doing their own research, which by the way, when you talk about AI, we have a project going on here at our house and there's concrete and my wife's wanting to build a new barn. And the first thing I did was go, how much is concrete per foot? You know what I mean? Just in my head mentally to prepare.

frame of reference.

I'm not going to do anything with it other than me just know it and I think that's the same with these with these buyers too is you just want a little bit of an idea because I think most customers their biggest fear is taking advantage of being being taken advantage of. So if they think it's supposed to be 12,000 bucks at least they're prepared for that. At least they're ready.

Yes.

That's exactly it, reducing the uncertainty.

So, ⁓ yeah, again, that car dealership, I really liked that because, because now when you go online, there is so many options that you end up going, I'm just going to call the dealer and see if somebody can answer all these questions. Right. I mean, you think about HVAC systems, there's a lot of terms and keywords and buzzwords that a homeowner is not going to know without doing some serious investigating. So now what are they going to do? They're going to call or they're going to book an appointment online.

Exactly.

Exactly. And I think what you just said is something I want to drill down on because in the past, the phone call or the home visit was the barrier you had to send the customer through to get the information. Now they're getting it on their own. And then the phone call and the home visit is actually a value add. So I think it still plays well in the contractor's favor that like someone can go on their website and do a bunch of research and get three different systems for three different water heaters.

have questions between the tank and the tankless and whether they need a 40 or a 50 and whether they're electric or gas, they may not know those things and they're going to have some frame of reference and they're going to start to understand the pricing. And then someone's going to come out to their home and help them figure out how to get it across the line. I think that letting the customer do that versus letting them start with someone coming into your house, that's been our goal since day one here.

Well, as someone who's used this type of platform, it certainly made going into the home, our close rate after that, because now the homeowner feels like, okay, they actually care. They're giving me the information. They're being transparent. And I don't remember exactly what the close rate was, but I mean, it was north of 80 % of, because now we walked in and they had an idea and now we're just helping them through the process a little bit better.

It's much higher. That's what our customers report as well, because you have to think about it. The way the process has worked for the history of the trades is the contractor, the salesperson, whatever you want to call it, goes into the house and they have to do their whole process and build value. And then they reveal this price at the end and they say, hey, this water heater is, or HVAC system is $12,000, $18,000, $22,000. And this homeowner is like, oh man, I heard it was $2,500 for mine.

35, 55 or $8,500 if you want to tank less. They already know that. Like how would you not have a higher close rate? Like the number one thing that they're concerned about is that. Then it's a value add that you drug test and background check your employees and you put booties on and drop costs and those sort of things. Like it's just a broken process that ⁓ unfortunately has just been ingrained into the brains of contractors for so long and for good reason, but now because of technology and AI and consumer expectations, like it's just not.

That's not the way it is anymore.

Well, our buying is just different. Like you think about Amazon. mean, if ever I'm looking for something, it's generally the first place I go is Amazon. Not because it's going to be the cheapest, but because I know I can buy that thing with one click of a button. Like the friction, super low. And I just hit the button and ⁓ two days, three days, sometimes one day it shows up at my house. And as a consumer, I think that's a pretty awesome, I think that's a great way to buy.

So think about this for a moment. So ⁓ do you still live in Florida? So you just described the world-class experience, frictionless experience of buying something on Amazon. And we could say it's a dry erase board marker, right? And you buy it today, you click it right now, and it's going to show up on your doorstep tomorrow, and you're ready to use it by 9 o'clock AM. Or maybe it's 10.30, whenever you get your deliveries. That's a world-class experience. That same exact experience can be true with a water heater in your market today.

I do, absolutely.

You can go onto a contractor's website, get the pricing, compare a couple of different options, buy it, click schedule. Same thing's going to happen as if they were at your house today. They're just going to, obviously they need to make sure it's the right water heater and those sorts of things, but that can be on your doorstep tomorrow morning. And you still had that feeling and the supply chain like never changed. Like they still have to go get it from the supplier and install it. ⁓ it's just a, it's a shift. And then your story is push the button next thing you know, tomorrow morning.

Water heater and people to install it showed up at my house. That's the key.

I think part of it too is that, that contractors need to understand who their customers are and who they're not. Because that experience is not going to work for every customer, right? So the, the customer who wants to price shop and get 15 quotes and all the other things to me, aren't you kind of getting rid of that? You're getting rid of that customer. Which you want.

You are to some,

yeah. it's, you know, it's funny if you look back at the way we've talked about this stuff for so long, you'll hear, I think about, I spend a lot of time around salespeople and you would hear things like, ⁓ it was, they were a tire kicker. They were just kicking the tires and like, that's a bad thing, right? Well, they invited you into their home and got an estimate to kick the tires because they couldn't kick them online. Right. So let them kick the tires and let, let, then build that funnel, nurture that customer.

and earn them if it's the right customer. And if it's not, it was never going to be your customer anyway.

Right. Have you guys done any, any research or math and I'm sure you have to some extent of how much this actually saves a company? mean, labor's gone up, customer acquisition costs that just keeps going up. ⁓ Fuel is up, insurance, like everything is up. So now on everyone, I mean, if you had a hundred calls and even if 50 of them came through your software, it feels like that would save a tremendous amount of money.

Yeah, I want to answer that through ⁓ three different ways here, three different mechanisms. So the first and kind of current state, know, just the fact that you're not running a salesperson to all these homes in a vehicle in a car and burning up gas is a savings time and quality of life. I think of Travis Crawford Heating here in Charlotte, North Carolina. They have two salespeople and the majority of the calls they do are leads that come in, you know, through an instant estimate.

And they're running a zoom meeting with a customer and walking them in the customers, choosing the zoom meeting. That's one thing that you need to know, or that should be known as the customer has a choice to have someone in their home or going to zoom meeting. They're doing a zoom meeting. So I think there's savings there that we could just talk about those savings in and of themselves. ⁓ then of course you can run more calls, those sorts of things. Like I could go on and on there, but there's two other savings that I think are more future focus that we need to be thinking about. One of which is, well, sales and marketing expense.

I mean, sales and marketing is such a high percentage of revenue for a contractor. It's that like you're just a sales and marketing machine. You know, you're spending upwards of, and you would know this better than me, but correct me if I'm wrong, between sales expense and marketing expense, 20, 22, 3, 4 % of revenue. Do think that sounds right?

If you combine the two of them, yeah, because I mean, typically marketing is going to run. If you're growing, you can be anywhere from eight to 12 and sometimes higher percent. Then you start tacking on the sales part of it, which most companies don't do. Now it's a, yeah, now you got a whole different ball game on the number.

So zooming way out now, and this is, ⁓ you know, somewhat, not somewhat, this is directly in line with the new version, new iteration of contractor commerce that we launched about a week ago. We think because of AI and where we are in the world today, that there's no reason a customer can't completely check out on a contractor's website and have an experience that is just as good, if not better.

than engaging with the best salesperson, the most knowledgeable employee at that business. And that is not a popular opinion. People are going to push back on that. This is as unpopular as it was a couple of years ago when I suggested putting pricing online. ⁓ But AI has made it possible for you to take the knowledge, the personal skill set, all those things of the people who are the best closers or the hot hands in your company and the mission value of your company and your brand and your voice and

give that to the consumer through an experience on your website. So I point back to savings. I see a world where there are systems sold where you're not paying a sales commission and there are systems sold where you're not, you know, fighting it out for Google AdWords and those sorts of things because consumers are, you know, looking for that AI type of conversational buying journey. And so that's what we've launched and it's, it's going to be fun. Grab some popcorn.

Honestly, I agree with you. I think that the world is shifting and people are more educated sometimes and consumers are more educated sometimes than we give them credit for and information is everywhere, whether it's online or the chats or the YouTubes or whatever. mean, information is abundant. So if you want to know about how much something cost, that's not to say that you're always going to get the right information, but.

It's out there and you got to meet your customer where they are. And again, this probably might not be the right fit for every customer ⁓ that buys. But to your point, when those people that are just price shopping, give them the information, be the source, be the trusted source for them. Because at the end of the day, somebody's going to win that business. Nobody's sitting at home going, man, you know what? I really want a new HVAC system.

I mean, mine's only three years old, but I really want a new one, you know, because it's in the closet and I can't show it off to my friends. I really want a new one. So giving them that opportunity, I think is I think it's fantastic. So what are some things that you see coming on the horizon for you guys that are going to just shake it up?

I think the big one is replacing an in-home salesperson in some cases. ⁓ That is where we're headed and that is what the product is enabled to do. ⁓ The majority use case is going to be complementing the sales process and building funnel and those sort of things, but making it possible to sell things from your website in a way that is just as good as being in the home is our primary focus. ⁓ The next big few product

⁓ I guess integrations, if you will, are the ability to take down payments quickly from a consumer and in a way that's consistent with how they would pay for everything, right? Payment is obviously already capable. We had someone actually buy a water heater today without engaging with the salesperson. So these are, we always celebrate those moments. ⁓ So yeah, I'd say the ability to have a salesperson live on your website 24 seven is where our focus and energy is going to be over the next, you know.

couple of months, couple of years.

So Paul, anybody who's listening, who's like, okay, I gotta find out more information. I gotta figure out what's going on here. What's the best way for them to get in touch with you guys?

Yeah, so the best way is go to our website, ContractorCommerce.com, hit talk to sales or get a demo or watch demo on demand. And you'll meet with someone from our team to let us learn about you and make sure that this is a solution that works for you and your business and where you are. So do a demo with us and ⁓ you know, ContractorCommerce.com. You can also find me on LinkedIn or Facebook and I can route you to the right people. Happy to connect you with existing customers anywhere you are in the industry. If you're

⁓ working with a major manufacturer or major distributor that's likely we have a relationship with them. So bring it up to your territory managers as well. But we're pretty easy to find and happy to help.

Very cool. So as we wrap up our conversation today, any final thoughts that you want to leave the listener with?

Yeah, you know, I, in the last few minutes of this, this podcast, we talked about a world of replacing an in-home salesperson and that can be really, really scary. And this idea of transacting online, which can be really, really scary, but I'll go back to a comment I made earlier. And that is that, just the simple idea of having pricing on your website is no longer really negotiable. And you also have to be really careful how you do that.

There are a lot of different tools you can bolt onto your website or redirect to another website to do AI versions of pricing calculations, those sort of things. I think that needs, is my opinion, you should do that in-house. You should do it on your website, on your specific website, but also trust the experts. It's not as simple as just putting your price book online. There's some nuance to it. ⁓ Contractor Commerce has been around long enough and is reputable enough that...

Thousands of contractors have tried this and had success with it. And we've got a great reputation and a great team. And ⁓ we'd love to help you guys kind of navigate this next step in your company's evolution. reach out and we're happy to help.

That is awesome. Well, Paul, I appreciate you being here and hanging out with us today. ⁓ thanks for the information, man. It was good. It was good info.

Yeah, Justin, great to meet you and thanks for the