One afternoon, Lesley Monsees, a customer service representative for KEIL Heating & Air Conditioning, was placing an order at the counter at a fish market,when suddenly the woman behind her said, “Are you Lesley?”

Not recognizing her, Monsees asked, “I’m sorry, could you remind me where I know you from?” The woman responded, “We’ve never met, but I recognize your voice. You’ve been taking care of me for years at KEIL Heating and Air Conditioning!”

Now, few contractors or their employees can claim to have been recognized as a celebrity in
a grocery store, but then again, KEIL Heating and Air Conditioning, Riverdale, NJ is no ordinary contractor.

Contracting Business’ 2005 Residential Contractor of the Year has a 97-year old history of superior customer service and quality work. They’re also no stranger to the pages of the magazine, having won two first place and one runner-up awards in the Quality Home Comfort Awards (2001,2002, and 2003).

Now in its third generation, this $3 million company is led by Barbara Keil, president. KEIL performs residential service and retrofit work (70%/30%) and occasional light commercial work in a 40-mile radius of Northern NJ and has 25
employees and 14 trucks.

A Long Legacy

In 1908, Keil’s grandfather started Henry Keil, which began an as coal and ice business. The
company eventually began delivering fuel oil and servicing fuel oil equipment.

In 1938, Barbara’s father, George, took over the business, which he ran with his two brothers. Since productivity ran in the family, it wasn’t long before he enlisted the help of his four daughters.

“As young kids, we helped out by stuffing statements in envelopes to send to customers,” says Barbara Keil. “Being competitive, of course, we would race to see who could finish the quickest.”

By the time she was 12, she progressed from stuffing envelopes to cleaning the office every
Saturday. During summers in high school and
college, she worked in the office helping out in a variety of departments.

After graduating with a degree in accounting, her father suggested that she work at KEIL until she found a “real job.” She never left.

“Once I started working at KEIL full-time, I gained a whole new perspective on what it meant to run this business. I truly enjoyed it,” she says.

She set about learning every aspect of the company by working in inventory, purchasing, and service, an area that proved to be an invaluable education. “In addition to learning how to speak with customers and arrange the service board, I learned how to effectively match the right technicians to the right calls, and not run them all over town. That’s what can really make or break your business,” says Keil.

Also working with Keil were her sisters Annette and Susan “A true advantage of working with family is trust. You know that if you need to be away from the business, everything will be taken care of,” she says.

In 1986, the company sold the oil business to focus strictly on residential HVAC. When her sisters opted to leave the company to pursue other interests, she purchased the company with her husband, Milton Baum, in 1994.

A veteran of the commercial real estate business, Baum had always admired his wife’s business. Although he didn’t have a background in HVAC, Baum could still see how the company could become more efficient and effective.

“I used to take a lawn chair to jobs and observe, taking notes on things such as how many times technicians would walk back and forth
between the home and their trucks. I saw how we could work smarter, faster, and even safer,” says Baum.

For example, the company began pre-packaging all the equipment necessary for install boiler, air conditioning, and furnace installations. Baum also revamped the shop, reorganized the supply room, and built a training room.“The training room is probably the most profitable investment we made. Not only is it great for our employees, but it has allowed our manufacturers to come to us for training,” he says.

In addition, the company committed to reinvesting in itself, with the goal of owning its building, equipment, and vehicles rather than renting, leasing or purchasing on consignment.

To save even more on costs, Baum and Keil pre-purchase equipment to obtain better pricing, and are proactive with OSHA safety inspections to save on insurance costs.

“All of these measures have led to great savings for our company, which we can then pass on to our customers,” says Baum.

A Great Company Means Great Service

Ask any employee at KEIL what makes the company special, and you’ll hear a resounding “great customer service!” The entire company works hard to cater to its customers, regardless if they’re purchasing a water heater or a top-of-the-line HVAC system.

“We value all of our customers, and provide them with the same high level of service. That’s how you build a reputation,” says Peggy Sauter, customer service and sales representative. “A good name is extremely important. A single person bad-mouthing you can affect your reputation more than 100 customers saying you’re great.”

“It’s critical to treat customers the way you want to be treated. Many of our customers have been with us for decades, and knew both my grandfather and father,” says Keil. “Furthermore, our local utility is a huge competitor. If we didn’t treat customers well, they could easily go to the utility for a fraction of the cost.”

KEIL backs this customer-focused philosophy with 100% money-back guarantees on equipment performance and on the company’s service.

“Our performance guarantee is there to ensure comfort. It promises that your new system will be able to maintain 70F, regardless if it’s a 10F day or a 90F day,” says Baum.

“We also offer a satisfaction guarantee that states ‘If you’re not completely satisfied with the way the system was installed or with our people, keep the system for free.’ That’s how confident we are in our work,” he adds. “Heck, even if you don’t like the color of my socks, that’s still an excellent reason for us to give you your money back within the first year.”

To ensure that its customers are happy, KEIL has a two-step process. The first is a questionnaire given to customers by the installing technician as soon as the job is complete.

This questionnaire rates the customer’s overall satisfaction with the job and the installing technician. “If the customer is anything but ‘thoroughly delighted,’ he or she will get a phone call within a half hour of the technician returning,” says Baum.

“Next, we’ll call homeowners within a week of their installation to see how the system is performing and make sure they’re happy with the work we did,” says Keil. “If something is wrong, we want to fix it. You want people to complain, instead of keeping quiet and going elsewhere. One of the worst things you can do in business is to just sweep problems under the carpet.”

KEIL’s customer focus is also reflected in its sales approach. “Listening to our customers is the most important part of the sales call, which is why we start at the kitchen table, not in the basement with the equipment,” says Kevin Steiner, comfort consultant. “It’s critical for us to get to know our customers and for them to feel comfortable with us.”

David Blau, comfort consultant, adds, “Our goal is to uncover and solve problems, not just sell equipment.”

Thus, comfort consultants go through a 20-question checklist to see if customers have any special needs or concerns regarding comfort or indoor air quality. They also carefully measure the home to perform load calculations and ensure perfectly sized systems.

“We spend a least 112 hours with customers, which allows us to get to the heart of their concerns, and come up with system that keeps them comfortable, safe, and meets every need they have,” says Blau. “Our prices are often higher than our competitors’, so we make sure they understand what they’re getting for that dollar —our years of experience, 24-hour service, money-back guarantee, and the highest quality installation.”

Satisfied Internal Customers

While keeping external customers satisfied reigns supreme, Keil and Baum are equally passionate about the well-being of their employees, and work hard to foster a sense of open communication and teamwork. One means is a monthly, company-wide meeting.“These meetings are an open forum to discuss important company issues, set goals, brainstorm, and, most importantly, celebrate victories,” Keil says.

“Barbara and Milt are always willing to try new things. Everything is open to discussion, and all of our ideas are given consideration,” says Monsees. “They also would never ask us to anything they wouldn’t do them themselves.”

KEIL also offers all employees incentives to help meet the company’s monthly and yearly financial goals. For example, every employee can offer service agreements, and technicians receive spiffs for uncovering sales leads. As a result, all employees are typically presented with incentive checks at the monthly company meetings.

In addition, there’s a year-end bonus. “We have a board in the office that shows our monthly goals and a running total of where are toward our year-end goal. If we hit that year-end goal, all employees receive $1,000 bonus,” Keil says. In fact, Keil and Baum recently presented those checks on December 24, for hitting 2004’s goal.

“We all have a stake in the success of this company. Therefore, when we achieve a goal, it gives everyone a sense of pride and satisfaction,” says Leslie Harris, customer service and dispatch. “Furthermore, Barbara and Milt never let you forget that the company’s successes are a result of our efforts as a team.”

Well-planned Maintenance

As part of its commitment to great service, KEIL is a firm believer in the power of preventive maintenance through service agreements. “Preventive maintenance is the best thing for customers. If we take care of their equipment on a regular basis, we can help avoid those no-heat or no-cooling calls that can occur when the weather is at an extreme,” says Keil.

She adds that service agreements often lead to replacement work and eliminate the dependency on the weather to keep technicians busy.

“We work hard to provide everyone with a 40-hour work week, without waiting for a cold snap or a hot spell. With a large service agreement base, we can schedule tune-ups during those milder months when we’re less busy,” Keil says.

Scheduling tune-ups during less hectic times also benefits technicians when weather becomes a factor. “When we start getting those first 90F days, the phones go crazy. Therefore, we arrange fewer tune-ups and leave the schedules a bit more open for emergency calls. We don’t want to burn out our technicians by running them around 12 to14 hours days for weeks on end,” she adds.

The company currently has more than 3,000 maintenance agreement customers, and consistently works on expanding that number. KEIL sends pre-season tune-up letters to its customer base of 15,000, and targets regions where the company would like to have a larger presence.

“We had a more than 4% success rate with our most recent campaign, which is great for direct mail. In addition, Peggy follows up on these mailings with a phone call, which always brings in a few more service agreement sales,” she says. “We used to send letters to a large geographic area, but we’ve found that we can be even more successful by tightening our geographic range. There’s so much business to be had in our own backyard.”

Continuing Education

Whether it’s to keep up with the latest HVAC technology or to sharpen managerial and customer service skills, training is constantly emphasized at KEIL.

“Training is about the most important investment you can make in your company,” says Baum. “Enhancing the skills of employees can only help the bottom line, and we get tremendous satisfaction seeing them learn and grow .”

KEIL’s office staff and managers attend a variety classes to improve their computer, customer
service, and dispatch skills and to become better leaders and coaches.

For technician training, KEIL sends employees to a technical school in Albany, NY and to classes offered by International Service Leadership. There’s also training offered by manufacturers and weekly in-house training meetings held by Steve Smits, operations manager.

“Each week we work on solving issues encountered in the field, both technical and customer-service related,” Smits says. “We also do a lot of role playing, and the technicians take turns teaching a class to their peers.”

Smits provides additional training by riding along with technicians each month. Using a checklist, he targets the areas where they need the most help and then reviews it with them. “The key is to teach them, and not do the work for them. Not only do you have a more productive employee, but one that takes a great deal of pride in his work,” he says.

A Dedicated Marketing Strategy

As with training, Baum sees marketing as a necessary part of reinvesting in the company. Six percent of KEIL’s sales revenue is devoted to its marketing budget.

To target specific segments of the company’s marketplace, Baum works with a data marketing company for direct mail campaigns. KEIL also runs television advertisements and has a newsletter in the works for this year.

One venue that’s been very successful in reaching current and potential customer is KEIL’s website, which received more than 20,000 hits in 2004. The site educates customers about services offered, current specials, and the importance of proper indoor air quality. Customers can also schedule appointments and ask technical questions via e-mail.

Finally, to reinforce the company brand and presence in the marketplace, KEIL recently began private labeling all of its major equipment. “Regardless of what brand of equipment goes into a customer’s home, our name and reputation are still behind it. Therefore, the decision to private label our equipment made perfect sense,” says Baum.

Association Involvement

According to both Barbara Keil and Milton Baum, association involvement has been a crucial part of KEIL Heating and Air Conditioning’s success and their own development as business owners and employers

The two are long-time members of Contractors Success Group, which later became International Service Leadership (ISL).

In addition to ISL, Keil is an active member of ToastMasters, and has successfully competed in many regional and state public speaking competitions. She also belongs to The Alternative Board, a group of local business owners that meet weekly to discuss common business issues and help set goals.

“As part of this group, I get feedback on what I’m doing right and wrong in my business, which has been very helpful in developing my management style,” she says. She adds that the group has also taught her how to delegate, which can often be difficult for owners. “What I learned is that you have to be specific about what you expect from your employees.”

Baum has been equally active, serving on ISL’s advisory board, and on the Zoning Marketing Alliance board. He also will be ISL’s new president in the association starting this spring (see News section, p10).

“Being active in an association allows you to rub elbows with the best and brightest in your industry. The knowledge you pick up is invaluable,” he says.

Looking Forward to a Bright Future

As KEIL Heating & Air approaches its 100th anniversary, the company shows no sign of slowing down. The firm just completed a complete renovation of the building’s interior, and updated its software for handling dispatch, service, installation, and financial information. There are also plans in the works to add satellite locations in neighboring regions in the coming years.

“It’s exciting to be part of a nearly 100-year old company,” says Keil. “Often by the third generation of a company, your chances of surviving, let alone thriving, greatly diminish. Our longevity is a true testament to my family’s hard work and love of this business. ”