New Construction
Talk to all your general contractors about an "upgrade program" for the homebuyers. Reward the general contractor for each upgrade client you get.

Be sure you get the buyer when they are picking colors, fixtures and such, so the upgrade gets figured into the 15- or 30-year mortgage.

Not Busy

The first thing I would recommend is to slow down your techs and instruct them on what to look for in a sales lead. Teach them to turn-in sales leads. Three techs should be able to keep one salesperson very busy (if he isn't lazy).

Look for this:

  • Has your salesperson been through your filing cabinets looking for mismatched systems? Major repairs? Refrigerant leaks? Old systems? Tech notes and recommendations?
  • Are your techs marketing to the neighbors on both sides and across the street on every service call?
  • Are your techs diagnosing the whole system — the duct system, behind the thermostat sub-base, dryer vents (the #3 cause of house fires in 2003!), east/west glass, infiltration points, CO detectors, up-to-code on smoke detectors, room or whole house surge protectors, air cleaners, humdifiers, maintenance programs, pool heaters, controls, insulation, radiant heat, humidistats, and on and on?
  • Is your salesperson asking for referrals?
  • Is your salesperson self-generating leads?
  • Do you do any cluster marketing?
  • Do you have a company newsletter?
  • Do you buy ads in other company newsletters?
  • Who is the largest employers in your market area?
  • Have you gone back on the leads you didn't close in the past year?

    The reason many of us are not busy is because we didn't do anything to be busy. You gotta plant the seeds before you can reap the crop.


Not My Customer

I understand that not every customer is my customer, and I don't want every customer. I would give leads needing a second call to another sales person who did quite well with them. Today, he offers the best training I have seen when it comes to sales results for technicians, salespeople in general, and novices. When I was training, I trained owners and people who had been in professional selling before.

Objections

In my sales training schools, most salespeople can't answer the following simple questions from customers

  • Why should I use your company?
  • How do I know I can trust you?
  • Your price is $900 higher than my last bid for the same thing. Why?
  • My system is still working now.
  • I'm getting three estimates.
  • I need to think about it. I'll call you when I'm ready.

These have all cost you big money in the past and will continue if we don't teach our salespeople. We don't answer objections. We defend our offer.

I could write a book on this . . . Oh, that's right, I already did!

On Call Scheduling
If you decide to run after hours calls, schedule your techs in a humane manner. You can't expect a tech to be on call every week and remain married. It’s your responsibility to staff properly. There are many creative ways to work out the on call schedule and reward your technicians for the service.

It's silly to think you can book and run every call that comes in to dispatch . . . you can't!

Out of Control
Many owners do not run their company, they simple work in it. Overheads are out of control, cost of sales are not accurately being measured, overtime is not tracked, there are too many valleys in the work schedule, employee morale and production problems and receivables have all the operating capital tied up.

Overtime and Diagnostics

Increase your diagnostic fee for overtime, but charge your regular or standard rate to all. Stating, "Never an Overtime Charge" will get you new customers. Your diagnostic charge should be elevated for non-agreement customers after 5 or 6 p.m. and on weekends.

Your on-call tech should be your best agreement sales person! He should also share in the business he writes while on-call to ensure he is doing the right thing for your customers, not just being a repairman.
Remember overtime work is "plus profit" work.

Overtime and Flat-Rate

It would seem to me IF your overhead was factored into your straight time hours, then the monies allocated for overhead would go directly to the bottom line on overtime charges!

If the majority of households are working 9-5, then your largest customer base is either forced to lose work to be home to meet the tech or is charged a premium rate for work done?

Also, if your agreement price is your regular price (profit budgeted and overhead allocated) and your normal or standard street rate price is your regular price divided by 0.85 (i.e., 1 – the 15% service agreement discount), all is still profitable.

Are you serving more non-agreement customers or agreement customers?

If you don't use a good labor rate calculator, most likely you are losing profits. I still find owners not adding labor burden into their cost of labor.

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.