Your Top Three Priorities for 2012

Jan. 1, 2012
As another new year filled with promise dawns, here are my suggestions for what you should focus on for 2012.

As another new year filled with promise dawns, here are my suggestions for what you should focus on for 2012.

Make Retaining Your Best Employees Your Top Priority.
You read a lot about the value and importance of customer retention— and you should. When you take into consideration that almost everyone's equipment will require repairs and replacement during a 10-year period, the value of each customer really adds up.

But don't overlook the importance of employee retention. Any single employee has the potential to bring you more money than any single customer.

What does a bad hire cost, and what does it cost to replace a technician? The two questions go hand-in-hand, because you usually have to go through a few bad hires before you find a real keeper.

How does the cost of hiring and training, and all the missed opportunities you incur while suffering through 10 new hires (most of them bad), compare to the cost of retaining a technician for 10 years?

It's cheaper and more cost-effective to retain your employees than it is to keep a revolving door on the employee entrance.

It looks bad if every time a customer calls your shop, you have to send out a different technician because you can't retain your technicians. Customers ask about that sort of thing, and don't like always having new guys come to their door.

High employee turnover looks bad in front of the rest of your employees as well.

High employee turnover, in every position in the company, is the reason we have so much difficulty in attracting new talent to the field. The people that are in this business just aren't recommending it to their family and friends.

Ramp Up Your Sales Training.
You have one, maybe two, primary sources of income: the money brought in by your service technicians and, if you have them, your salespeople.

Everyone wants their techs to sell more, but there are usually two things lacking: the time to do more work when they sell it, and the fact that they're not very good at sales in the first place.

Don't ever rush your techs or make them work late because they sold too much, or they'll never do it again. My unscientific study has shown me that the majority of service technicians out there value their time off more than they do money.

My informal exit interviews with employees who've gone to work at another company tell me than many techs move on because they boss is never satisfied with production and overworks everyone. They then go to work at another company because they promised they don't do that (although they probably do).

If you want your techs to sell more, you're going to have to improve their salesmanship. Don't expect them to do it on their own. Most people don't do what is in their best interest to do. You're going to have to improve their salesmanship with ongoing sales training.

I have a friend who started a company three years ago in an area that, for three years, had one of the highest foreclosure rates and unemployment rates in the country. The company started with just two people: my friend and his brother. In less than two years he was no longer running calls himself and had more than a dozen employees. His service techs have an average sale of $777. They sell a lot of component cleaning and indoor air quality equipment.

His secret? He trains them for one hour per day, four days per week, 52 weeks per year. He doesn't back off on the training during the busy season. The contractor is a student of salesmanship, and is an excellent salesman and sales trainer in his own right. He also uses a variety of audios and videos. Every truck has a CD player, and his service techs (who are on heavily incentive-based pay) purchase sales training CDs through their tool account and listen to sales training between calls.

Sales training does not cost you money. Do not worry about the four hours per week of non-billable time per technician. You're paying for that anyway in fewer tasks per call and missed or overlooked opportunities. Even mediocre sales training tends to have enough of a short-term positive effect to be worth your while. Get a feel for how much your techs bring in on an average day, then hold one one-hour sales meeting. As a rule, even with that one hour of missed time per technician, you'll usually have a higher-than-average day that day.

It's worth pointing out that this all starts with the recruiting process. My friend only hires technicians who have a proven track record in sales and who express the understanding that service technician is a sales position.

Raise Your Prices by 10%.
If your net profit for 2011 was 10%, and you raise your prices by 10%, you'll double your net profit.

The average amount of time applied to the average task in your standardized price book is around a half-hour. That means that even if your book is based on $300 per hour, raising your prices by 10% means the average task will go up in price by no more than $15. Even low performing techs sell a good 1,000 tasks per year. That's an extra $15,000 per technician per year in pure profit. Your customers won't even notice the price increase, but your bank account will.

Next month, I'll return to my ongoing topic of answering your telephone and tell you how to sell service appointments.

Charlie Greer is the creator of Tec Daddy's Service Technician Survival School on DVD, which provides contractors with 52 ready-made 30-minute sales meetings, and Slacker's Guide to HVAC Sales on Audio CD, for getting your sales training in while driving between calls. For complete details, go to, or call 800/963-HVAC (4822). Email Charlie at [email protected].