What’s up with this?

I keep hearing about all the people who do not have during this difficult recessionary time. I keep hearing about all the programs the government at the state and federal level are telling us are necessary to help those who do not have. I look at the people I know and see how they are giving to those who do not have and something just is not adding up.
A small Bible study group Lynn and I are involved in raised hundreds of dollars just from a handful of families and provided Thanksgiving dinner, Christmas presents and a sizable gift card for two have not families. Church after church, civic group after civic group donated money and food for needy families during the Thanksgiving and into this Christmas season.
Our local PHC association here in Southeastern Michigan raised over $1,200.00 for Gleaner’s Community Food Bank. Additional money was giving by individual contractors to numerous groups who help others. At least five of the companies (there are only about 20 small companies) are having can food drives, giving customer discounts for cans of food and then giving the food to the Gleaner’s Community Food Bank. Literally thousands of cans have or will be given during November, December, and January.
During the Katrina disaster, thousands of people from the Detroit area alone went to Louisiana and Mississippi using their own time and money to get there. They worked tirelessly to rebuild the area with their sweat and love. Many were from faith based organizations and civic organizations. Thousands of others from around the country also made the trek to the hardest hit areas.
None of the folks or companies mentioned are wealth or exceptionally profitable, but they dug deep into their pockets and gave substantially to others with needs. Americans are a giving people when they know of a need. I’m a firm believer in limited government and the spirit of the American people. We do not need additional government handouts and programs. Perhaps we just need a few more Americans to see the needs of this world and get involved. I salute each of you who have given of your time, your money, and your talents. For those who have not or have only done so sparingly, consider doing it on 2010. It could be a New Year’s resolution that will give you a joy and satisfaction beyond understanding.

Less Calls = More Revenue Part 2

It’s now been over a month since we had the Customer Service Training for technicians with three companies. Some of the training has “rubbed off” but that is only because we have continued the training in house. Training is so important to take an inbound call properly then have the technician follow the steps on the call needed to be successful in completing the call with an outcome that is excellent for the customer, the company and the technician. It’s always necessary to attempt to have a win, win, win situations with each customer. So much easier said than actually accomplished. The company can provide all the tools needed to do this, these would include a well training inside staff, a well equipped truck, a well designed truck inventory, thought out efficient systems within the office, technician technical and customer service training, along with the ancillary materials for the technician. Most companies provide a reasonable effort at each of these. What it really comes down to is the desire and abilities of the technician to go beyond “fixing” the initial called in problem and being a consultant that the customer is looking to for solutions.
I was in Micro Center Computers & Electronics this afternoon and there were dozens upon dozens of customers in the store. Some were there to buy ordinary supplies and others for upgrades to their computers or new computers. The store had an abundance of knowledgeable staff to assist those with simple questions and needs and those with very technical questions and needs. They were consultants. The customers could buy many of the items in the store at other merchants and likely for similar prices, but not the consultant service provided. The store’s cash registers were busy the entire time I was in the store with a line of 15-20 waiting to check out. How do we help our technicians to become consultants and not just fixers or part changers?
I believe it comes down to the things most owners and managers dislike doing. These include role playing, customer service training, coaching, ride-a-longs, and proper hiring. It is a full time job to do these if you have more than a couple of technicians. The results will be amazing if the effort is put into each of these. We work hard to get the telephone to ring and then we don’t maximize the opportunities on each call. The hook lies in the fact that many owners were technicians themselves and have that same built in resistance to the consultant environment. This is the advantage those who come from outside of our industry have when they operate a company within our industry. Are you ready to change?

Let the Do It Yourselfer Do It

I was checking out the MSN home page this morning, I noticed a disturbing link. It was a link for “How to fix your own toilet”. Immediately I was upset because this is taking work away from contractors. The name of the article was ”Troubleshoot your toilet without a plumber”. One of the web gurus was showing customers how to change a flapper, with links to other articles on how to fix plumbing, electrical, and even some furnace and air conditioning problems. Contractors were losing opportunities to solve customer problems and make a few dollars in the process. Instead, it became another trip to Home Depot or Lowes so the customer can purchase the parts. Then it hit me!
If a contractor had key words on his website like “Do it yourself plumbing” or fix your toilet or repair faucet that it could attract the customer to his site. The same idea could be applied to an HVAC company or an electrical contractor. Of course, he would have to have the content in the website for Google and other search engines to give him higher ranking but a few pages of content developed by the contractor could easily be written and posted to the site. With may fixtures, faucets, electrical items, furnaces and air conditioning becoming more complex with more and more unique parts, the customer may find it necessary to contact that contractor to ask questions or even schedule a service call. At this point, the perceived value of the repair is greater because the customer has a greater understand of the repair and may have tried and failed at the repair attempt.
Let’s face it, on a small repair it is very difficult to charge the customer the “right” price and show the value provided. Most of the complaints I remember receiving were related to minimum calls or low billing calls and the value a technician was able to provide. I’m not saying we should give up on these calls, but a toilet with a reasonable quality working ballcock, shutoff valve, good seat, and without cracks does not leave much else for the technician to sell on the call unless he does the whole system inspection. Even then, there may be little to offer the customer as additional services so the call can become a low billing and a low profit to the contractor. Perhaps our marketing and focus should be on calls that provide a higher ticket and are often easier to provide the perceived value.
By having the go to website and the email or telephone answers for the customer on minor repairs, your firm could become the go to firm for all repairs. In the crowded marketing arena today, a contractor must somehow find a way to be the customer’s go to firm. Another way of thinking.

Less Calls = More Revenue Part 1

We recently completed 7 weeks of technician customer service training. It consisted of 6 two hour classroom sessions with homework each week and a video taping of the technicians practicing their interaction with a customer. The customer in this case was another technician. As I reviewed the results of the class evaluation from each of the technicians and the owners, who were required to attend the training, the comments varied widely. Some really enjoyed the training and videotaping and others did not like the classroom sessions at all. This is where it gets interesting.
When I met with the company owners two weeks after the sessions ended, and ask if there is any change in the performance of their technicians, I got some interesting answers. Those that did not like the training were performing about the same as they had done prior to the training. Those that liked the training were selling more on fewer calls! It seems that there was a direct correlation between the attitude of the technician and the change in their performance.
Should this surprise us? I don’t think so. With today’s customer, the old attitude of you should just be happy I showed up to fix your plumbing (furnace or electrical issue) just does not work. The importance of exceed the customer’s expectations is what is necessary to develop the long term “love affair” with your company and therefore spend more with your company.
The long held thought in our industries was that we hire a new technician on his or her technical abilities alone. We need to get the job done therefore hire someone who has at least xx number of years experience, and worked for another company we respect. Today we might even do a drug test, a physical and a criminal background check. But we ignore the personality and attitude of the potential new hire. I’m not saying these things are not important, but we need to look further. We need to be testing for attitude and personality prior to hiring. An individual with an open mind to change and growth, and reasonable technical skills is much more of an asset to your company than the super technical technician without the ability to grow and change. Rethink your hiring and advancement criteria and look at adding personality and attitude testing before you hire another mediocre technician and hire a potential asset. Less calls can equal more revenue.

Three Ideas

Lynn and I just returned home from Nashville, TN and the annual Comfortech seminars and product show. Comfortech is an excellent opportunity for contractors in the HVAC field to learn and see what’s happening in the industry. There were many new and innovative products and services at the show this year. Some of these included an attic insulation program put together by Owens-Corning, a heat pump water heater from Rheem/Ruud, several customer contact companies, and a new line of heavy duty tool bags, to name a few. The seminars varied from okay to excellent with three topics that stood out in my mind.
The first topic that really hit me was social networking via the internet on sites such as Facebook, YouTube, and LinkedIn. The world of marketing may be quickly changing with customers looking for products and services from friends and acquaintances though these types of sites. The advantage to the contractor is the cost is almost completely in time, not dollars. Most of the sites are free or just a few dollars to have the access you will need. To make the most of this new network, a contractor will need to spend several hours a week to keep their “walls” and other information up to date. Many of us over 40 (I’m well over 40), will have a more difficult time setting up and keeping up with our sites. We are not familiar with this new medium of communication. If you have children in their teens or twenties, they are probably active already in this arena. Will our “typical” customer use this newer form of communication? Well, one of the fastest growing segments of social internet networking are the over 40 crowd. I would suggest you take a strong look at this change in customer habits.
The second topic which received a lot of attention was ongoing connections to customers by establishing a broader base of maintenance agreements. In the Detroit area, where our business was located, maintenance agreements were not a strong service offered by HVAC or plumbing contractors. In the last decade, that has changed. The push by utilities to offer breakdown insurance and maintenance on appliances, furnaces, air conditioners, and hot water heaters has caused the sleepy contractor community to wake up. With the heating season upon us, it is time for every contractor to set a goal to increase their number of agreements, get renewals, and provide the service the customer is expecting. It is time to closely look at renewal rate, monthly billing, 100% follow through on providing the service checks, and follow up customer satisfaction systems.
The third topic that really hit a nerve for me was branding. I’m not totally sold on the idea of having an in house line of equipment, but I am totally sold on the idea that each contractor must have a unique brand that differentiates their business from the others in the market. There are hundreds of white vans with some lettering on the side traveling through neighborhoods daily. Most do nothing to add to a potential customer’s knowledge, or awareness of that contractor’s business. Most contractors have uniforms which look like every other company’s uniforms, most companies use booties, carpets, and have the company name on the uniform. Many companies have customer service people who are reasonably pleasant and helpful. So what are you doing to leave a unique impression on each customer you touch or instill top of mind awareness in a potential customer? Every owner and manager needs to spend more time in developing these strategies and customer focus for their company and less time with vendor salesmen, the minor stuff others can handle or solitaire on the computer.
What to begin your change, contact me at Dan@saYesToSuccess.com.

Clean it out

Over the past rainy weekend, Lynn and I started cleaning out our basement storage area. My goodness, what a collection of stuff we haven't used in years. There was an aquarium which I cannot remember the last time we had tropical fish. There was a box of golf balls that have to be at least 5 to 10 years old. I'm sure they have lost their elasticity. Perhaps I'll pass them on to opponents in our weekly golf outing. We found a lot more stuff like this that needs another home other than the Bergstrom's.

Just about every shop I have been in has a corner, a shelf, an area with stuff that has not been used in 5 or more years. Hubbed cast iron fittings, DWV copper fittings, galvanized reducing tees, street els, and much more hiding in the backroom. HVAC contractors with old circuit boards that have been replaced with updated versions, odd motors, OEM parts that are not used any longer. Electricians with outdated switches, panels and light fixtures that are not used any longer. In all of these shops, I see parts not used on a job, but not returned to the suppliers even if they were not special ordered. It is like throwing money away.

Prompt return of unused parts that cannot be turned over in less than 60 days would reduce payables and help cash flow without a substantial change in the business. It would just require a few minutes a week by someone in your company to process these parts and send them back. Even with a stiff restocking fee it is far better to return these parts than to keep them in stock.

Those parts that have sat in your inventory for years and not used need to be sold off, scraped, or just thrown out. You may find space in your warehouse that could be used for parking a truck inside, or better yet perhaps you could rent some of that gained space and get income. A good rule of thumb is you should not stock parts that you can't turnover in 60 days or less. Some suppliers will give you a discount for a large order but if it is more than 60 days of stock I would recommend you not buy. Work with that supplier to provide the stock you need when you need it and set discounts on the inventory you buy from them on a long term basis. Every item in your warehouse should have a min-max quantity set based on 60 days or less stock.

There is a trend in the industry of suppliers providing next day restocking for trucks and warehouses reducing the 60 day inventory down to a week inventory quantity. Having cash available and not tied up in "stuff" will make you money and allow you to take advantage of opportunities when they come available. I believe many contractors could work out of a smaller warehouse area thus reducing rent, utilities, taxes, and maintenance.

Some Yes....Some No

As I have had contact with various HVAC contractors in the last two weeks, I have have two completely different reations to the business climate in the metro Detroit area. Some are very busy selling replacement air conditioning units and furnaces in the middle of August. They are selling high efficiency equipment and are not selling it at cost. They are selling it for a profit! The suppliers are telling them they are the only ones selling high efficiency equipment. They are getting the maximum support the supplier can give them to help them to continue to sell. Others are telling me that there is no business out there and sure enough for them there is no business out there. They are telling me the prices are too low, no one is buying, things are so tough! They owe their suppliers and other vendors because they have zero cash flow. So I asked myself what the difference is between those selling, saying yes, and those not selling, saying no. Looking onto the reasons I find two main points that differentiate these contractors. Those who are selling have said, "There is business out there and we are going to find it." They are marketing and putting the energy into their businesses. They are not waiting for the phones to ring, they are using the Internet to market, they are selling maintenance agreements, they are training their techs to look for add on sales and opportunities for replacements. The others are waiting for the phone to ring, they have cut back on marketing, they are not selling maintenance agreements, they are not using the Internet effectively, they are looking back on how it used to be. Change is hard but tough times require that we evaluate our businesses and make the big step of change.