I'm all for techs being allowed to sell replacement equipment. They've already got the built-in credibility and rapport with the customer. It's also a way for techs to make extra money, while making affordable for contractors to be able to pay that extra money.
When you follow my system to the letter, just about every technician, even newbies, can quote prices for replacement equipment and close the sale, and work as a team with your existing sales staff.
The arguments against allowing service techs to sell replacement equipment are:
• Techs don’t run a load calculation
• Techs only sell partial systems
• Techs only sell the cheapest equipment
• Techs don't address the duct system
• Techs don’t sell accessory products, such as indoor air quality products
• Allowing techs to sell equipment will cut back on sales leads for your sales force.
You're going to overcome each of these issues by always sending your professional replacement salesperson out after each tech makes the sale, but before it's installed.
When your techs close equipment sales, have them say, “Mr(s). Customer, you’re all set. Prior to the installation, I’m going to have the person who handles all our residential installations come by and survey the job.”
With this system in place, no matter what the tech sold, your customers will be provided with every opportunity to invest in the best possible system for their needs.
At that point the salesperson goes to the job, takes measurements and runs a load calc to ensure the job was sized correctly and will fit. During that time, the salesperson basically runs this call following almost the same steps they would if it was a regular replacement lead.
Salespeople are not under the same time constraints a technicians, so it's the salesperson who sits down with the customer to go over their options, such as:
• Upgrading a partial system to a complete system
• Upgrading the quality or efficiency of the equipment
• Making any necessary duct modifications for health, efficiency and/or comfort
• Indoor air quality options.
With this system in place, no matter what the tech sold, your customers will be provided with every opportunity to invest in the best possible system for their needs.
How does the money work?
It's a pretty common practice for companies to have a standardized (flat-rate) book for replacement sales, and you'll need one for your techs to be able to quote prices on the spot. If you don't have one, there is no shortage of companies that will supply you with a book or app so you can get one.
Have your pricing include the commissions for both a tech and a salesperson.
When your salespeople follow up on a technician replacement sales, and are able to upgrade the sale in any way, shape or form, even it’s only something small, like an extended warranty or upgraded thermostat, they receive a full commission on the total job.
When your salespeople are unable to upgrade the job in any way, there is no commission.
The technician always receives a commission on what they sold, and not on any upgrades sold by the salesperson.
Two commissions per job?
You may be wondering, “How can I add two commissions to every job and still be competitive on price?”
To begin with, a technician's commission is usually lower than a salesperson's because techs are already being paid an hourly wage and make the sale in considerably less time than salespeople, so it's not exactly double the commissions per job.
Furthermore, you only pay two commissions when the salesperson upgrades the sale, so there's extra money in the job anyway.
My experience has been that I am able to sell replacement equipment at higher prices while running service than I can while running leads as a salesman, so technician sales have both commissions figured into the price.
When people call for service, they’re normally not shopping for replacement equipment. They hadn’t necessarily considered replacing their equipment and don’t have price comparisons.
On the other hand, when customers initiate the selling process by calling to schedule an appointment to get a “bid”, one thing you know for certain is that they’re price shopping, so price is more of an issue when you're running leads than it is when you're running service.
When salespeople are running leads that were generated from any source other a follow-up on a service technician sale, there is no technician commission involved, so they can deduct the technician’s commission from the price to keep them competitive, without lowering the profits on the job.
How well does this work?
A number of years back I conducted a seminar in which, just as a matter of divine coincidence, a half-dozen salespeople who worked at companies where I’d implemented this system were seated near each other in the front row. I asked each of them how often they followed up on techs sales and were unable to upgrade the sale in any way. Each one of them stated they had never been unsuccessful in upgrading the sale.
As luck would have it, the last time I purchased a new system for my own home, the first salesperson I'd ever implemented this procedure with showed up at my home, and that was twenty years later. I asked him how often he didn't upgrade a tech sale. He said he never had.
I also have an unblemished record on upgrading technician replacement sales. The easiest time to sell someone something is immediately after they’ve just bought something from you.
SPIFFS vs. Commissions:
Techs should get a small amount of money, usually called a SPIFF, when they generate a lead. The commission for a sale is significantly larger than a SPIFF.
A lead worthy of a SPIFF means that they were able to contact the office and set a firm appointment for a replacement salesperson to come by while they were still running the call.
A lead worthy of a SPIFF means that they were able to contact the office and set a firm appointment for a replacement salesperson to come by while they were still running the call.
Whenever a tech recommends a replacement, whether or not a sale or an appointment was made while the tech was on the job, it should be noted. If a price for a replacement was quoted, that should also go in the notes.
A salesperson should follow up on every service call run in which a tech recommended replacement equipment.
A tech recommending a replacement, and even quoting prices for replacement equipment, that does not result in a customer setting an appointment while the tech is on the job, does not result in a SPIFF.
Paying commissions for replacement sales tends to generate more interest in sales on the part of the technicians. Your sales staff following up on technician recommendations will result in more leads and sales for your salespeople.
CHARLIE GREER is the creator of Tec Daddy’s Service Technician Survival School on DVD and Slacker’s Guide to HVAC Sales on Audio CD. Information on Charlie’s products can be found by calling 1-800-963-HVAC or by visiting www.hvacprofitboosters.com. Email you comments and sales questions to [email protected].