By John N. Garofalo
Recently, I had the privilege of speaking before a group of contractors at the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA) convention. I was asked to present to these sheet metal contractors some of the topics that seem to cause ‘heartburn’ in the residential HVAC market. Ironically, the topics I covered can cause heartburn in most segments of the HVAC business.
Grab your Pepto-Bismol and let’s see how much burn exists.
Let’s face facts. Ours is not the most glamorous industry to work in, and it certainly is not the easiest business to recruit new people into. Even some of the top technical schools have stopped offering an HVAC program. Add to that the issue of working in hot attics, cold basements, confined spaces, working on weekends, being on-call, working mostly alone, and lastly having to contend with the “Bubbas” who work for wages, and you don’t have a very attractive picture.
What’s a recruiter to do? Unfortunately there aren’t any silver bullets, however there is sound advice we can follow.
It’s somewhat amusing that most of the times we recruit when we need people. That’s like looking for a date a 2 a.m.
The key is to recruit constantly. I spend a great deal of time consulting in Oregon and Washington state, and I use the analogy of having a 500-gal. fish tank that currently has two five-pound salmon in it. However, I still have a net strung across a river and every couple of days I check it out to see what I may have caught. Today I go down to the river, and low and behold, I have a 10-pound salmon in it.
Let’s see, what do I do? Well I may not be the sharpest nail in the bucket, but I’m going to put that 10-pounder in my tank and release a five pounder. If I had not had the net out I would still have only two five pounders.
Put the net out! Don’t wait until you need people to recruit. Do it constantly!
How? Many companies have implemented a recruiting bonus — to be paid to the employee who actually recruits a new person that is hired. The employee normally gets one-half of the bonus amount when the recruit is hired, and the other half three to six months later, if the new hire is still employed.
Along with that program is a sign-on bonus for the new hire. Again, one-half is paid on beginning, and the balance is paid in three to six months.
Some companies always have professional, magnetic signs on their trucks that read “hiring qualified servicemen, installers, etc.” Some companies are participating in job fairs so they can highlight their company to those people attending. There are a number of websites the industry is working with as well. The key is to do whatever you do consistently. Don’t wait until 2 a.m.
In conjunction with this issue is a subject near and dear to my heart: Accountability. I’ve heard far too often the excuse of “I can’t hold my people accountable because, if I rattle the cage or hold them accountable, they’ll leave and then what?” The problem with this is you are being held hostage by your employees. That is never a good situation.
What’s amazing is that when I speak to the field employees about this issue we call accountability, they’re all in favor of it — for everyone, all the time. The problem is we, the leaders, are inconsistent and thereby render the entire process of accountability as “eyewash” — a fancy way of saying “it doesn’t exist.” Holding people accountable for what they have been trained for, and being paid for, actually develops a strong core of employees who will stay employed by your company.
There is an old adage that states; “You must either change your people or . . . change your people.”
Flat Rate Pricing
Many companies have no idea where the flat rate concept came from. Consequently they’re letting their own opinion sway their judgment. As well, far too many HVAC companies think of their service departments as a necessary evil — “If it makes a few bucks, great.”
Ironically, the outcome far too often is, “I can’t afford to pay my good servicemen enough, because the service department is losing money.” I think the phrase is a Catch 22.
First, we must understand the flat rate exists because our customers asked for it. That, in itself, ought to be enough of a reason to offer it.
A long time ago, one of my mentors told me, “Selling is easy, find out what they want and give it to them.”
Let’s face it, I can come to your neighborhood and probably find an auto garage that has a dirt floor. Yet, when he hoists my car up to do a brake job, he tells me what the cost is going to be. That is flat rate. Customers don’t like to watch the clock. They prefer flat rate.
An issue that ties to offering flat rate service is having your service department stop “troubleshooting,” and start doing “full diagnostics.” There’s a big difference.
Troubleshooting is fixing the thermostat wire that the homeowner’s beagle chewed through in the backyard and leaving, thinking you did well.
Doing a full diagnostic may have legitimately revealed a pitted contactor, low refrigerant, a dirty blower wheel, and filthy evaporator coil. The key word is legitimate.
If you simply “troubleshoot,” try explaining to the homeowner when she calls back three days after you fixed her thermostat wire, that all of what you found now is unrelated to the call you made three days ago. Good luck!
Flat rate will help you to legitimately increase your average repair invoice and reduce call backs. What additional reasons do you need?
Selling Service Agreements
One of the biggest responses I hear for not buying a service agreement comes from the people in the HVAC business: “I wouldn’t buy one.”
It’s t ime for Homer Simpson’s “D’oh!” Of course you wouldn’t. The shoemaker doesn’t take his wife’s shoe to the shoemaker shop, he fixes them himself.
The vast majority of our homeowners don’t even change their filters. Realize that buying service agreements is as natural to our customers as having the oil changed in their cars every 5,000 miles — if they percieve value! The question is, does your service agreement system convey value?
The number one reason people state as to why they purchase a service agreement: priority service. The number one reason you should have a large service agreement base is loyalty.