John Bottala, Western Rooter & Plumbing CEO, says he is not happy about the price gouging and overinflated quotes he’s been seeing in the drain cleaning and plumbing industries, and he blames private equity firms. That’s because private equity firms have been buying up many successful drain cleaning and plumbing operations.
Because private equity firms exist to make money for their shareholders in the short term, they don’t care about the impact on the markets they serve, Bottala says. This is why these firms do everything they can to boost profits — hitting customers with oversold job quotes to sell more services while underpaying staff to cut costs.
“In the last several years, there has been a big private equity push in the home service space,” Bottala says. “What I’ve been seeing is a lot of ‘tech lead generated calls.’ That is where the service tech goes out to a call and then asks for more assistance. Then a really good sales rep gets sent to the customer site and tries to sell them whatever they can, whether the customer needs it or not.”
At Western Rooter & Plumbing, based in Arcadia, California, Bottala says the company is adamant about not taking that approach.
“We send out seasoned techs who can do the job from start to finish, and not try to get the most out of our customers by selling them services that they don’t need,” he says.
Bottala says he loathes the impact of private equity firms on the drain cleaning and plumbing industries.
“In my opinion, they’re actually killing the industry,” he says. “People are all consumers who just need to get the job done and not be upsold on everything. Worse yet, if you’re honest and ethical, you may be outrun by a private equity firm’s sales rep, because the customer can think you’re missing something by quoting a lower price. All told, I think the industry is getting a little bit too aggressive out there, and all because these private equity firms need to make returns on their money.”
