Knocking on Doors
I wanted to keep this a SECRET!
The best place to find a helping hand is at the end of your arm. Use it for knocking on doors meeting people and talking about new programs. Many people don't know they have a need until you tell them.
Pass out coupon books, company checks worth various amounts to be used for a service or product. My best effort was to sell financing and monthly payments. Many people don't know they can afford upgrading or even adding a central system.
It’s like Christmas every time you knock on the door. People will buy comfort when you show them they can afford it. Eighty percent of my sales were debt consolidations, equity loans or new low interest first mortgages.
Here's the presentation.
"Hi my name is Tom. We are in your neighborhood today, to inform homeowners like yourself, about some special funding available to add or upgrade your home comfort system. Would you like to see if you qualify for this special funding?"
Then shut up!
Note: The special funding is a special buy down interest or deferred payment program.
Leads should be issued based on closing averages. The top guy should get the first lead every day, and then rotate the leads based on closing averages. This has got to be a business decision. Remember, you paid for the leads.
I do not believe in leaving proposals, agreements, work orders, or anything else with a prospect if they have not made a buying decision! Supposedly your proposal contains your unique customized offer, warranties, and included add-ons. Why would you want to leave that for the next guy following you?
In the 1980s, the proposal Charlie Greer and I designed cost 75 cents to have printed in color. All I leave the top copy of a worksheet called a "Client Option Worksheet," with all the information they will need to make a buying decision. Most calls are sold on the first call anyway, if you are prepared to sell on the first call.
Length of Sales Calls
I never much cared for participating in "bids" or "estimates," and informed prospects that I needed at least an hour of their time. If I took any longer, it would be their fault.
Magic Labor Rate
There is a "magic labor rate." It's called profitability!
No one taught business 101 when they started their HVAC business.
If your overhead is 38% and labor cost are running high, margins on labor are going to be much higher. In fact, you should calculate non-productive hours into the breakeven point and add a percentage based on the company's callback history.
Few techs even own a magnahelic gauge. Even fewer take one out of their truck.
I only know of a handful of salespeople who own a magnahelic and use it in the sales interview. I even know one who uses his to generate new sales leads, which is a great idea.
Maintenance Agreement Pricing
There are two schools of thought here. Should your agreement program be a profit center or just be profitable and retain customers?
This is what I have seen work:
Price your agreement at about a 40% profit margin (I hope your overhead isn't that high) and sell a couple thousand agreements. Then, raise your price to a 50% margin. Use your maintenance department as a training ground for future technicians.
Remember, every agreement you sell its going to take three man hours to perform. For every 500 agreements, you will need a full time apprentice to perform the service.
You are the customer of your supplier and the manufacturer. You know the nice thing about being the customer? You have choices about with whom you do business!
How can you provide exceptional service and products when the vendor you use doesn't believe it is necessary? Exercise your right to choose.
The supplier and manufacturer is in business because of you. You are certainly not successful due to them. Let’s take this industry back and start leading instead of following. Where would they be without the independent contractors?
Marketing to Companies
Create a plastic discount card offering 10% parts & labor discount on repairs. On the front of the card, have printed:
Preferred Employer-Employee Comfort Discount. 10% discount on all parts & labor for air conditioning and heating repairs.
Offer the program to companies with more than 20 employees. Send a letter offering the program to the company as a "free" employee benefit when they come to work for that company. Follow-up this letter with a phone call to energize the offer and its benefits to the employee and the employer.
One contractor reported a local hospital ordering 400 discount cards just to start the program.
Send these cards to school boards and teachers, fire departments and law enforcement, veterans clubs, gated communities, large church groups, civic organizations, and so on. It's a great way to build your customer base.
Merchandising the Service Department
Want to sell more than service through your service department? How about:
- Pool heaters
- Smoke detectors
- Whole house surge protectors
- Circuit surge protectors
- Mold remediation
- High efficiency lighting
- Alarm systems
- Sound systems
- Security lighting
- Window film (heat rejecting)
- Off site monitoring
- Ceiling fans
- Pressure cleaning.
Why not? You’re in the home. You’re trusted. You’re qualified.
When two or more people make the same wage, there will always be one who feels he is being taken advantage of because he puts out more and cares more. When you do the same job day in and day out with little change, where are the incentives for being innovative, creative, and productive?
Paying installers to save time on a job can bite you in the butt. It can and will create callbacks. However, if you require a "start-up sheet" signed by both the lead man and the apprentice, it will reduce callbacks. Also, paying an incentive for no callbacks in 30 days after install is very helpful.
There are several ways to pay on performance with installers. We just need to put their pay increase after their hourly wage in their control. Performers will stay and prosper. The others will seek outside training to stay on the team or become "free agents."
When you start paying on performance, you will attract high performers. I want to own the company where the techs earn $80,000 to $100,000 a year and salespeople average $150,000 to $20,000 per year. The more they make, the more I make and that’s exciting!
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. 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).
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.
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 [email protected].
|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].|