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.

This month: topics beginning with the letters "E" through "I"

Employees Owning Service Agreements

Service agreements should be an employee benefit. Ownership breeds conviction, and conviction solidifies sales referrals. You can't sell it if you don't own it!

Employment Ad

"Experienced diagnostic HVAC or Plumbing Technician with own tools, clean driving record, and can pass a drug test. Must be a team player. Great benefits package and 60 hours of training per year. You are invited to take our pre-qualification test. Earnings up to $45 per hour for top performers. Are you one?"

Employment Application Statements

• At-Will Employment

If you choose to accept this offer, please understand your employment is “at-will,” voluntarily entered into and is for no specific period. As a result, you are free to resign at any time, for any reason, or for no reason. Similarly, [company name] is free to conclude its at-will employment relationship with you at any time, with or without cause.

• Confidentiality and Authorization to Work

As a condition of employment, you will be requested to sign an employee confidentiality agreement. You should also note that you will be required to show proof of citizenship, permanent residency in the U.S., or authorization to work in the U.S. within three business days of your date of hire.

Financing for Customers

Financing was my favorite way of selling. Sure, it takes a little longer. If you keep your pipeline full, the turn-around is barely noticed. The job and the energy savings are both tax deductible as an added benefit.

Give me a prospect with not-so-good-credit, holding a 30-year mortgage (and even a second on it), and I'll show you a qualified buyer. You can easily get a new first and a debt consolidation in less than 30 days.

I spent 10 years working with this type of customers while everyone else was chasing the customers on high dollar houses.

Everyone who wants to be successful had better acquire financing tools. With the present and forecasted economy – increases in dual income homes, reinvestment in existing homes, and remodeling — the future is going to be even more of a credit market than the present.

Flat Rate

I once worked with two brothers and an install crew who were doing about $300,000 at $55/hr. Two years after converting them to flat rate, they had great net profits, about $1.5 million in gross sales, 12 employees, two locations, money in the bank, no receivables, can take a vacation in the summertime, and dominate their market.
The population base in their town is 2,783. The rest of their customers live on farms or in rural areas!

I can give example after example. Flat rate is the single most important investment you can make. Once you go flat rate, your business will increase.

Guarantees

Beyond a simple satisfaction guarantee, offer a "Comfort Guarantee" a "No Lemon Guarantee" or an "Energy Savings Guarantee."

Help

I can understand why contractors look for best practice groups, alliances, and franchises. They just need some help and don't have anywhere else to turn.

Most suppliers wouldn't have a collection problem if they had made a small investment in business training and financials so the common man could understand the importance.

Implementation

We all know implementing is not our strong suit. Procrastination is our downfall. If something is easy to do, it’s also easy NOT to do.

No matter how many companies you visit, they all have similar challenges and the biggest is implementation. We can teach it, but we can't make you try it and use it.

Important Questions

A baker’s dozen of important business questions:

1. How many contracting companies have a detailed budget by profit center, managed by the team leader? How about one for each service truck, also?

2. How many contractors have sales projected annually, monthly and -- more importantly -- weekly by profit center, and tracked by a team leader?

3. What is an acceptable payroll percent to service sales for your service department?

4. Same as above, except installation labor percentage to installation sales?

5. How long is any part or material allowed to sit in your stockroom before it is turned into cash?

6. Do you know the equity value of your company? What is the value of any customer who owes you money for more than 45 days?

7. Who tracks sales leads? How many did you have last year and what was the closing percentage? How many will you need for next year, and from where are you going to get them? What will their cost be?

8. Is your service and replacement P&L set up for a wholesale business or a retail business?

9. Are your vehicles refueled on your time, or on the person receiving the benefit's time?

10. If you don't track you sales (service too) hourly, how do you know when to reach for “Plan B”? Or, to take one more call, schedule work for Saturday, or adjust your marketing efforts? If you don't count your money, how do you know when it's not there?

11. If you’re not in the office and your people aren’t empowered to manage, who’s running your company?

12. If you really believe in maintenance agreements, why are agreement sales so soft?

13. What could you do to make your replacement offer worth just $800 more than any other company's offer?

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 liz@serviceroundtable.com.

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 matt.michel@serviceroundtable.com. Or send your comments to Contracting Business at letters@contractingbusiness.com.