Our family has a cat. I grew up a dog-lover, and considered cats as unpredictable, moody, irrational, aloof, and selfcentered. So far so good. Plus, they had the annoying habit of transitioning from being petted calmly to piercing your hand and sucking your blood just to prove they could. Then they’d meow for attention.
Thus, there may be a link between men identifying with dogs and women with cats, but I’m not even going to bring it up. You think I want my eyes clawed out?
Our cat, Gary, has no tail (he had a little automotive mishap, we think). He also has one eye (brawl with another cat over — you guessed it — a female). As if the loss of an eye wasn’t bad enough, he was neutered at the time.
My wife referred to this last little “modification” as being fixed. If you asked Gary, I doubt he would agree he’d been “fixed” but in fact, horribly broken.
In short, Gary functions OK, but not nearly as well as if all his systems were at 100%. The thing is, we know what’s lacking with Gary, but with your business systems, that’s not readily apparent. Some things may work OK, but are being seriously hindered by flaws elsewhere.
It pains me to say this, but great marketing can’t help you if you don’t have the technical skills to get the job done. And if you’re running great technicians into the ground but are under-pricing jobs, you’re still going to come out behind.
Many contractors need marketing help because they need leads, want to boost their image, or are simply losing too many customers. To solve those problems, you need to make sure you’re ready for this change within the other systems at your company.
Four HVAC Business Success Systems
1. Circulatory system. This means sales and marketing. It’s the lifeblood of your company. It includes generating leads, closing sales, keeping customers, getting referrals. Otherwise, there’s no such thing as customers or profits, no money for education, marketing, or additional staff. If you’re not generating sales, your business is anemic and a target to be picked off.
We’re seeing higher than average predatory and failure rates (new construction meltdown) among contractors unwilling to market aggressively. Changes are required.
Prognosis: Did you generate more leads in 2007 than you did in 2006? A higher or lower close rate? Higher or lower average transaction value? Increase or decrease in recurring revenue? All are trailing indicators of progress or decline.
2. Nervous system. No, not the part of you that freaks out every time you review the books. We’re talking about the brains of the operation, and that’s you and your staff. Poor staff = poor image = poor service = poor sales = death of your business. How’s that for holiday cheer?
You must invest in your team if you want things to flow smoothly. That means training your staff — and even yourself — to drop bad habits that drive away customers and replace them with healthy habits.
Greg Gill of Action Air near San Diego has rocketed his business from just over $3 million — where it was “stuck” for eight years — to more than $6 million in three years. How? “By letting experts do what they’re good at,” Greg says.
He hires a sales trainer at least once a year. Closing ratios and margins pay for this training many times over. His staff gets tech training, phone training, book-keeping and software training, and, yes, he even gets marketing coaching. He’s always moving. By the time his competition tries to catch up, he’s already moved.
You can start by changing the small stuff. The next time you hear someone say, “I’m sorry, that’s company policy,” calmly instruct them that your company policy is to make customers happy. Tell them what you CAN do for them instead of what you can’t.
Prognosis: Compared to the best service company you know, how do you rate? Have you called yourself lately? What’s the weakest area of your customer relation process? Strongest? If you invested 2% of your gross in training, don’t you believe it would add a multiple of that in return?
3. Respiratory system. Breathing fills your body and your blood with life-giving oxygen. It’s your “feel good” system. Your staff must feel good about the job they’re doing; your customers need to feel good about being your customers and referring others. A 2005 poll clearly indicated that today’s workforce values “environment” and “self worth” over compensation. And our figures show that 71% of your “lost” customers did so because of your lack of appreciation to them.
This is not coincidence. Appreciation and benefits beyond the measurable are the new economics.
Customer retention programs among contractors are soaring, more than 300% in the last four years. Why? Last time I checked, customers do all of the buying, renewing, and referring. Makes sense to make them really yours. Yet if they only use you once — and that does not make them a customer — you’re probably losing money on the single transaction and definitely losing on their lifetime value.
You want mediocrity? Then copy the majority. You want stellar staff and customer retention? Copy the market leaders. You’ll end up with the majority’s best staff and customers as a result.
Prognosis: What benefits have you added to your hiring program in the last year? Do hiring candidates emanate from your current staff? What percent of your sales came from customers? Higher or lower than last year? What percent of your sales came from referrals? These are indicators of good or lacking morale, and each carry their own momentum.
4. Skeletal system. This is your business’ structure, so planning is the backbone. The first of the year is a perfect time to do this. A quickie for your marketing:
• Determine your sales goals in service and replacements. Just write it down, no one is grading it. It’s up to you.
• Assign a percentage of those numbers to your marketing budget. The average in HVAC is 4.3%. Aggressive companies can spend up to 10%, while slow-to no-growth, mature companies may only spend 2.5%.
• Using the four quarter system, figure your percentage of sales for peak summer and peak winter then both off peak seasons. You have four points on your calendar.
From this, you can quickly determine the timing for service or replacement promotions for each season, using the percentage of sales per item as a basis for your marketing.
Prognosis: Does your year just happen, or do you make it happen?