Trailblazers

The city of St. Charles, MO, marks the spot from which Lewis and Clark began their epic journey in search of a water route to the Pacific Northwest in 1804.

And less than a mile from where the legendary explorers pushed off from the banks of the Missouri River, the Jerry Kelly Heating and Air Conditioning Company — the Contracting Business 2006 Residential Contractor of the Year — blazes a trail of service excellence to homeowners who need a heating and air conditioning company they can rely on.

Company owners/founders Jerry Kelly and his wife Janet; General Manager Steve Miles and his wife Jill; and 43 eminently qualified and loyal employees begin each day with one mission in mind: to provide quality service, healthy air, comfort, and peace of mind to homeowners throughout the St. Charles region.

Small Area, Many Customers
Jerry Kelly Heating and Air Conditioning is a family-owned business founded by Jerry and Janet Kelly in 1977. Jerry had worked in the industry 12 years for his mentor, Ted Schoetker, at Ted Schoetker Heating and Air Conditioning Company. When Ted passed away, Jerry and Janet set up shop in a narrow, white brick building on N. Second St. That building is still the company's home, and business is booming.

An improved marketing plan, and a sales approach based on health, comfort, and indoor air quality (IAQ) has taken the company to more than $7 million in sales for 2005, which represents a 26% increase in sales over 2004.

St. Charles, a community of 70,000 single family homes, is the company's primary market for system repair and replacement, with an 80/20 split between residential and light commercial. The territory is highly concentrated, with seven minutes being the average distance between service calls. Most of the homes are post-WWII vintage, and are in need of new systems to replace their first or second systems. Most of Kelly's commercial accounts are comprised of restaurants and other small businesses.

Change Brings a Turnaround
Jerry Kelly speaks with the quiet assurance of a man who's made it, who knows it, and yet remains grateful to have weathered the storms that so often buffet an independent small business.

"We started out with five technicians and lots of used trucks in 1977. Today, we're doing primarily what we did back then, which is residential service and replacement," says Kelly. "Our main business is residential, because we had backgrounds in residential installation, and didn't really have the facility or manpower for new construction at the time."

"No matter the weather, your home feels better when Jerry Kelly comes to call."

Steve Miles, a perceptive troubleshooter, has been with Jerry Kelly Heating and Air Conditioning for 12 years. An electrician by training, he owned an electrical contracting company for a short time, and then worked at another electrical contracting company, helping it establish a service department. He married Jill Kelly in 1994, and joined the Jerry Kelly Heating and Air Conditioning Company as a dispatcher. He was named general manager four years later, and as such is involved in every aspect of the business.

Miles' promotion to general manager at Jerry Kelly Heating and Air Conditioning coincided with the consolidation movement, which was feared might threaten the existence of small HVAC companies.

As hard as it was to admit, the Jerry Kelly team knew some important changes were required if the company wanted to grow, let alone survive. With a mandate for survival, Miles was able to bring some new ideas to a company that realized it couldn't become frozen in time, and couldn't rely on a seat-ofthepants approach to policies and procedures.

"We started to become more professional in the way we ran our business," recalls Miles. "We saw that you couldn't compete on price; the low bidders were going broke. We realized that if you did a quality job, you had to charge for it.

"We started offering more extras, such as insulated plenums, a sound reduction package, and new return air drops. We made maintenance agreements and extended warranties standard with almost every system we install, and we've always recommended higher efficiencies, to add value and justify the cost.

"Everything's changing and we want to change with it. That's our philosophy, and we're doing a better job today than we ever did."

Call to Service
An important tradition at Jerry Kelly Heating and Air Conditioning that was in place at the time of its mid-90s resurgence was a fierce commitment to 'round-the-clock residential service.

"It was a good niche for us," remembers Jill Miles, who helped run the company as soon as she was old enough to answer a telephone.