Tom McCart, the first salesperson to sell $1 million of residential replacement sales in the HVAC industry, left a rich legacy of advice for contractors. In this series, we present, in alphabetical order, Tom's posts to The Service Roundtable's HVAC.Roundtable discussion list.
Tom passed away in 2004, after a long battle with ALS (Lou Gehrig’s Disease). ALS took a toll on Tom physically. It took a toll on his family financially and emotionally. Tom’s business has survived. Please support Tom’s survivors and his legacy by purchasing his books or attending No Secrets training (www.nosecrets.com).
Now, let's return to Tom's insights on everything in the HVAC industry from A to Z. This month: the "B"s.
The Backs of Your Business Cards
Since you’re already passing out business cards, why not have a call to action on the back?
Contractors I work with have used this to fill the entire back of their cards:
New Customer First Call
We’ve used seasonal offers as well, such as a percentage off on humidifiers, energy saving thermostats, descending discounts on preseason maintenance and system cleanings, a Free $49 Value Home Energy Analysis, a Free $59 Air Flow Test, and a Free $54 Carbon Monoxide Certification Test.
These all work to get customers’ attention and keep your phone ringing.
Until you can answer the most basic question asked by your prospective clients, they’re going to continue to balk, be defensive, indecisive, and get other bids. Life goes on, except you’re losing great sales opportunities. It’s bad enough that many contractors are losing business because they don't have enough techs to respond to all the calls.
You and your people must be able to answer these questions:
#1. Why should I do business with you?
#2. Can I trust you? Your company?
#3. Why is your offer worth that much?
#4. Do I have any options?
#5. You’re the professional. What should I do? What are the ramifications if I don't?
Can all of your people give you a spontaneous answer to these questions? Can you? This isn't fielding a bunch of objections. It’s the basics about your company!
Benchmarking Residential Installation Data
If you’re trying to find out how long other contractors take to perform a change out, be careful. One contractor told me his technician could install a condensing unit in two hours. He left out the fact that they were still running callbacks on the unit! Doing the job fast and doing the job right are two different considerations.
If you want to keep good installers, you have to pay them and give them time to do a professional quality job. Reward them through incentives, such as no callbacks in 30 days, job finished under guideline time, good customer comments, and their efforts to market the current neighborhood.
Here are some basic guidelines:
- Condensing unit: Six hours, plus one hour for a helper to load and off-load.
- Air handler (a horizontal application, the worst case): Two men (lead and apprentice) for eight hours (16 man hours).
- Gas or oil furnace: 10 hours for two men (20 man hours).
- Package rooftop with a crane: Two men for six hours (12 man hours).
- Split system air conditioner or heat pump: Two men for 10 hours (20 man hours).
- Split system air conditioner and gas or oil furnace: Two men for 12 hours (24 man hours).
These are minimum hours. The degree of difficulty factor in all cases is the responsibility of the salesperson and should affect commissions.
I’ve heard horror stories about this from all across the U.S., from small towns to large. I have heard of installers taking personal porno tapes featuring the owners, to a baggie of marijuana, to heirloom jewelry, to $10,000 in stashed cash.
If you are going to service these customers — and for many it’s a must because of transient homeowners — get your techs bonded! Make sure you’re carrying the proper insurance.
Use the bond in your marketing efforts. It has value.
I can't keep my mouth shut when comes to sales. The only people I ever found who were brand conscious are the owner, prejudiced techs, and brainwashed salespeople.
I have old copies of more than four years’ worth of sales agreements (contracts or proposals) for one contractor I worked for. Only two stated the manufacturer. The sale should be about you and your company, not the name on the box.
I’ve sat across the table with buyers for more than 30 years and have yet to meet one who knew what they wanted or needed. I have met with several who thought they knew what they wanted, but it wasn’t what they needed.
Through the years that I’ve been training, I’ve asked salespeople and technicians, "Who selected the equipment?"
More than 90% responded that they did or they recommended the choice. As far as equipment is concerned, your salesperson will make the decision for the prospect. I rarely recorded the brand on the proposal.
The salesperson or tech has to size the system using manual J, measure to ensure it will fit, address the duct system, and choose the equipment, including SEER and AFUE. How is the prospect qualified to make this decision?
Why do prospects call us? Many think it’s to get the lowest price. I think they want professional advice at the highest quality they can afford.
People buy emotionally, but have to justify the purchase logically. Our job is to help them do this.
The better you know the equipment, the easier it is to sell against, and vice versa. Alas, private labeling is more difficult to sell against.
Clients are looking for value, service, and quality from a service company that demonstrates reliability, assurance, image, and empathy, and is responsive.
A brand is as strong as the sales force behind it. Where would the manufacturer be without independent contractors like you to support them and to co-op your customer base to them? We all have our personal prejudice toward equipment, but do we believe in it enough to own it? Sell yourself and your company.
Remember, it has always been, the client’s choice in how much value, quality, and service he can invest in.
Budgeting for Warranty Callbacks
Why wouldn't a "warranty" call be counted as billable time? The manufacturer warrants the parts or a percentage of parts. Doesn't everyone budget the labor and additional parts into the cost of sales in every job?
In service, on every labor hour, you budget for callbacks as well. Everyone should have the numbers from the previous year for callbacks and warranty calls to use in coming up with a workable figure for service and replacements.
I have a client who budgets 2% of total labor sales for service callbacks and 3% of total replacement sales for manufacturer warranty calls. All callbacks and warranty calls are paid for out of this reserve account. It’s all paid for by every customer.
A service invoice should be completed and priced on every callback right out of the flat rate book. The customer is given his copy with $0 collected and $0 due. The invoice is marked with "CB" for callback and "MW" for manufacturer warranty.
A long-time contributor to Contracting Business, Tom McCart was HVAC’s first million dollar residential retail salesperson. Tom died of Lou Gehrig’s Disease on Jun 10, 2004. During his final years, Tom was an active participant on the HVAC Roundtable as a Service Roundtable Consult & Coach Partner. For more information about the Service Roundtable, including a FREE e-book on service company marketing, visit www.ServiceRoundtable.com, call Liz Patrick at 877/262-3341, or e-mail l[email protected].
You can also purchase “From the Sky Up, the Tom McCart Story on DVD,” or any of Tom’s seven sales, marketing, and management manuals, at www.hvacprofitboosters.com. All proceeds from the sales of Tom McCart’s products go to Tom’s estate to help his survivors pay Tom’s medical and long-term care expenses.
|Matt Michel is president of the Service Roundtable (www.ServiceRoundtable.com), an organization dedicated to helping contractors prosper. Matt is also the publisher of Comanche Marketing, a free marketing e-zine. Subscriptions are available at www.ComancheMarketing.com. You can contact him directly at [email protected]. Or send your comments to Contracting Business at [email protected].|