Harsh Reality Demands Strategic Response

March 1, 2012
Facing changing markets and a tough economy? Improve your processes and business culture, and venture into new markets. Here’s what our experts say:

Profits are getting harder to come by. Therefore, in today’s economy, everything you do to positively change or influence any aspect of your business operations will — it is to be hoped — be rewarded by increased profits.

During this critical time, there can be no leadership vacuums. Take a careful step forward, and your business will flourish. Take a blind leap, and more often than not, in this risky environment, results will be poor.

We asked a noted business consultant and some of our favorite HVAC industry contractors for a few tips on growing profits in an unforgiving economy that just can’t get going. — Terry McIver, executive editor

Have a Mission, and Make it Known
Dulcee Loehn, founder of Focal Point Business Performance, Tampa Bay, FL. She has more than 12 years of experience in the HVAC industry — as a financial manager for Johnson Controls, and as one of only six female service managers in the U.S. — and has been a business coach for more than 10 years.

Leaders are intensely future-oriented. They have a vision of what their business looks like three to five years down the road. A strong, specific mission statement clarifies for everyone how we must treat each customer every hour of every day. Let’s address one example common to the industry:

In HVAC, all things lead to documentation. Many customer service issues can be traced back to documentation issues; typically, between the field and operations. Make sure your mission statement includes your understanding of dedication to timely and accurate documentation at all levels within the organization.

Inaccurate or late documentation leads to problems in the detail of the work done, problems with clarity around the scope of the project, inaccurate invoices, problems with getting paid on time, and lost profits. These internal problems inevitably create confusion, questions and frustrated customers.

Hiring: Choose Values and Character
When hiring, skills and experience are important, but not as important as the beliefs and characteristics that drive a person’s behavior. Technical skills and knowledge can be taught. However, the beliefs, values, and characteristics that guide how a person treats others are anchored within that individual and very often cannot be altered. Take your time when hiring. Record all of the characteristics you seek for the individual and the position.

Talk to several candidates and interview them thoroughly, and ask questions that will cause the candidate to articulate thoughts and experiences about the characteristics you seek. Hire a person for their values and character and teach them the rest. Accomplishing this takes discipline and patience. I know we usually wait until we really need a person before hiring them, and then don’t take the time to interview or train them properly. However, whenever we rush this process, we almost always regret the decision. These regrettable decisions negatively impact customer service, and can be very costly.

Shepherd Your Customers
For some jobs, the customer service experience is short. But on other jobs, the process can be long and require many steps and handoffs. It’s important to make sure that someone is accompanying your customers through every step of the process, until the last service is performed.

Make sure your customer service process describes the details and requirements of each handoff and that they’re performed consistently and flawlessly. There’s no greater frustration than to execute almost all of the experience perfectly, and lose the customer because of one minor misstep or missed commitment.

In my years of experience in HVAC, I’ve found the best way to ensure this is to conduct job review meetings at the start and conclusion of each job, as well as “job progress” meetings, if necessary. You should adjust the size and mode of these meetings based on the size of the job. All relevant emloyees should attend these meetings. Cover all the details of the job, not just the technical aspects.

Discuss customers, their expectations, their hot buttons, and how communication with them will be performed.

Make the Most of Reduced Demand Calls
Barbara Keil, president, Keil Heating & Air Conditioning, the 2005 Contracting Residential HVAC Contractor of the Year.

Market to your existing customer base. To do this most effectively, make sure that when technicians are in the home, they get all equipment information — even if they’re not servicing everything. Make sure equipment is added into computer database and aged properly. When we have a mild winter like we’re experiencing this year in New Jersey, we generate lists based on equipment age, and offer specials to those customers. This keeps our technicians busy when we have no demand service. Our existing customer base provides us with opportunities to grow.

Find Great Ways 'To Be'
Greg McAfee, president of McAfee Heating & Air Conditioning, Dayton, OH. These tips are taken from his book, It’s (My)Your Dream, in which he shares his business success strategies. McAfee Heating & Air Conditioning was named the 2010 Business of the Year by the Dayton Business Journal.

Be strategic. No dream — no matter how small or audacious — will come to life without a strategy. Find time to dream and plan. Get the right people at the table to help you, and continually update and refer to your plan to stay on track for your dream. The word strategy derives from the Greek word strategos, which derives from two words: stratos (army) and ago (ancient Greek for leading). It could be said that a strategy is a leadership plan. How often do you plan for tomorrow? Plan and dream about where we want to be in one, five and 10 years from now, and review it often.

Be giving. Aside from just being the right thing to do, building a “giving culture” in your business can have many practical benefits, such as employee engagement, stronger brand perception, and customer loyalty. Deloitte LLP researchers found that 72% of employed Americans trying to decide between a job where everything else — location, job description, pay, and benefits — was equal, would choose the company that also supports charitable causes. Start giving today and make an impact on someone’s life.

Be innovative. Innovation simply means coming up with new and better ways of doing something. As the leader, it’s up to you to set the stage for a sense of adventure and freedom to encourage employees to develop and share new ideas. The biggest mistake made is losing the innovation you once had when you began.

Find New Revenue Sources
Tommy Estes, president, Estes Heating and Air Conditioning, Atlanta, GA, and the Contracting 2010 Residential HVAC Contractor of the Year.

Be willing to step out of your comfort zone and examine any feasible opportunity to generate revenue. We struggled some in 2011, but because we now do plumbing, electrical and home performance, we were able to maintain our previous year’s sales volume of $17.8 million.

Aggressively market your services, especially to your customer base. For us, the best way to maximize sales from existing customers is through leads generated by our service techs. It’s vital that they understand the services we provide and are trained to talk about them to our customers.

Respond in Kind to Vastly Different Market
Randy Seaman, president, Seaman’s Air Conditioning, Grand Rapids, MI — the 2006 Contracting Commercial HVAC Contractor of the Year.

We’re getting aggressive again! The industry was doing well for so many years, and now, there are many more contractors seeking the work. We’re diversifying more than we ever did before, and marketing more. This includes social media — blogs, email blasts, Facebook, Twitter, and Linkedin. We’re looking into markets that we hadn’t thought of, and going against the inclination to treat all segments the same. Our services for commercial industrial, hospital, and manufacturing customers are packaged differently. We’re trying to be more specific in the things we do.

We’re also providing more training in a wide variety of areas, and we now do the electrical work on smaller projects. Larger electrical work is still subbed out.

The phone doesn’t just ring anymore. You’ve got to be out there. Competitors are knocking on your customers’ doors every day.

About the Author

Terry McIver | Content Director - CB

A career publishing professional, Terence 'Terry' McIver has served three diverse industry publications in varying degrees of responsibility since 1987, and worked in marketing communications for a major U.S. corporation.He joined the staff of Contracting Business magazine in April 2005.

As director of content for Contracting Business, he produces daily content and feature articles for CB's 38,000 print subscribers and many more Internet visitors. He has written hundreds, if not two or three, pieces of news, features and contractor profile articles for CB's audience of quality HVACR contractors. He can also be found covering HVACR industry events or visiting with manufacturers and contractors. He also has significant experience in trade show planning.