2015 Residential HVAC Contractor of the Year: Schaafsma Heating & Cooling

great swiftness”/“grand rapids” as part of the city’s 1960s revitalization program.

It was there, on Calder Plaza, that we chose to photograph the management team of Schaafsma Heating & Cooling. We did so for three reasons:

• Schaafsma’s roots go back 110 years in Grand Rapids history.

• Immediacy as well as “pampering” are this firm’s approach to service, which they call the ‘Red Carpet Treatment.’ They

arrive quickly, on time, and will do everything they can to meet their customers’ comfort needs.

• Like Mr. Calder, they are “artisans” in their own right—
artisans of quality HVAC system design and installation, and true masters of HVAC customer service.

Schaafsma Heating & Cooling company is a regional monument to the highest ideals of excellent service that every residential HVAC company should strive to maintain, and it’s for these many reasons that we have selected Schaafsma Heating & Cooling of Grand Rapids, MI, as our 2015 Residential HVAC Contractor of the Year.

Beginnings & New Directions

Schaafsma Heating & Cooling was founded in 1905 by Marinus Schaafsma as Schaafsma Hardware & Heating. Services included coal and oil heating, roofing, hardware and sheet metal fabrication. After a short time, the hardware store was split off from the other businesses, and was eventually closed. And so the years went by, through the second and third generations of ownership. The company’s services included both light commercial and residential work.

Third-generation owner Marv Schaafsma retired in 1993, and relegated most control to his then-partner, Ray Carpenter. Carpenter died unexpectedly in 1998, and without his leadership, the business began to struggle, and was in danger of closing. In 2001, three of its key employees stepped in to purchase it from Mrs. Carpenter — Kevin Walsh, who came aboard as controller in 1987, Bill Krestakos, who had joined in 1986 as a commercial salesman, and Eric Pannill, who started in the installation department in 1977. Today, these business partners and friends serve as president, sales manager, and installation manager, respectively.

Detoured by a National Tragedy

Just one month after the acquisition, the new management team’s plans for recharging the business were stalled by the terrorist attacks of 9/11. The shock that disrupted so many small businesses was especially difficult for this newly reformed venture.

Soon, Schaafsma had to drop its largest customer, a major home builder, because it just wasn’t making money in home construction, though the sector represented 50% of the company’s business mix. But then, it got busy.

Schaafsma began a series of steps to expand its regional profile, and brought the team in contact with some of the HVAC industry’s leading business advancement organizations.

Despite the national malaise from 9/11, the Schaafsma team embarked on a major overhaul of every facet of the business. It included a gradual series of steps that expanded its regional profile, and brought the team in contact with some of the HVAC industry’s leading business advancement organizations. What came next was an infusion of new ideas into the arteries of this nearly 100-year-old company that gave it what it needed to live again.

Action Plan: Memberships & Methods

“The first thing we did was to start acting more like a retail company than a contractor,” Walsh recounts. “We created an advertising budget and advertising plan. For creative help, we started working with an advertising agency.  And since we were going to be a ‘real’ business, we needed to have standards for the work being performed.” Walsh, Krestakos, and Pannill knew they had to raise their game in areas related to customer service and quality.

“We were the first in the area to not only promote 24 hour emergency service but actually do it.  So many contractors say they do it, but won’t actually answer the phone after a certain time,” Walsh says.

We created an advertising budget and advertising plan. For creative help, we started working with an advertising agency...and we needed to have standards for the work being performed." — Kevin Walsh

Technician certification by North American Technician Excellence was the next step.

“We embraced NATE as a level of professionalism and hired a NATE proctor to come in and provide training, so our guys would pass the tests,” Walsh shares. “We were the first in our area to actively promote NATE, and maybe even the first to have a NATE certified technician, but I couldn’t prove that. And, we were the first in our area to be a NATE Quality Circle Contractor.”

Schaafsma joined Service Roundtable — a popular and well-established collaboration of leading service contractors who share information, and help other contractors improve  sales, marketing, operations and profitability. In turn, membership in SR gave Schaafsma exposure to other industry support organizations.

“We learned about National Comfort Institute from other Service Roundtable members, and reached out to NCI for training for service technicians, installation technicians and comfort advisors,” Walsh recounts. “This put everyone on the same page — we were no longer going to just change out a box. We would also start addressing airflow problems, combustion and ductwork. We’ve expanded the home performance side of the business. There was a time when we used many ‘rules of thumb,’ and would only perform load calculations on new homes, but not on replacement work. That’s all changed. Every home is measured,” Walsh shares.

Their next step was to join an Air Conditioning Contractors of America (ACCA) MIXGroup, a peer-group accountability program that brings non-competing contractors together each year to troubleshoot common and sometimes, complicated business management problems.

Schaafsma’s membership in the MIXGroup provided a look at how some of the best contractors operate their businesses. Among Schaafsma’s current MIXGroup peers are Hobaica Services of Phoenix, and Larry Taylor, formerly of AirRite of Fort Worth, both past CB Contractor of the Year award winners. In all, their MIXGroup consists of 10, non-competing HVAC firms, including past ACCA contractor award winners, AirTro, of Monrovia, CA, and AirAssurance, of Oklahoma City, home to CB's 2007 Woman of the Year, Narissa Rampey.

“One of the biggest challenges we had to overcome with our people, was the attitude that something that worked at Hobaica’s or AirRite wouldn’t work here,” Walsh recalls.

“We had to bust out of the little box that was Grand Rapids, and get our people to realize that business is business, no matter if it’s Phoenix, Fort Worth or Grand Rapids.”

Schaafsma joined Service Nation Alliance in 2014. This is a branch of Service Roundtable that provides success benchmarking, marketing programs, boot camps, success summits and much more. They also belong to the Comfort Institute. Walsh says peer group membership has been a “guiding force” for the company.

“It’s so much easier to learn from others and adapt to our vision rather than reinventing the wheel,” he says. As a testament to their efforts, Schaafsma Heating & Cooling was named the 2010 Bryant Dealer of the Year. In 2011, the company won a Bryant Tier 3 Medal of Excellence, based on product mix, sales growth, and customer satisfaction.

"We had to bust out of the little box that was Grand Rapids, and get our people to realize that business is business, no matter if it’s Phoenix, Fort Worth or Grand Rapids. — Kevin Walsh

Schaafsma’s expertise runs the gamut in modern home comfort, including forced-air systems and radiant hydronics. They’ve also built new profit centers around insulation services and duct sealing with AeroSeal.

Dramatic Turnaround

“At the time we bought the company, we did maybe $1 million in service and replacement work combined. Today, that’s increased by 400%,” Walsh says. Schaafsma’s growth plan is to increase sales volume by 10% annually over the next five years.

The Schaafsma motto is, “Red Carpet Treatment.” It means they’ll be there to provide top-notch service, all the time.

“If someone calls in with an emergency situation, we’re going to be there that day,” Walsh promises. “If you don’t have heat, and need a new furnace, we’ll install it in the evening. We’ll put them in on weekends, we’ll put them in on Christmas day if necessary. That’s a testament to our employees, that they’re willing to do that. It’s a service to get them up and running as fast as possible, with minimal inconvenience.”

With such a lofty service goal, installation manager Eric Pannill — who worked in the field for the company for many years, and can empathize with technicians’ daily challenges — does all he can to support field installers, including visiting jobsites daily and helping with needed supply trips to their HVAC distributor, Behler-Young.

“The guys look up to me because I’ve been in the field. I’ve seen both sides, I know what to expect,” Pannill says. “I work closely with them, help to make sure we get things done. I’ve got their back, and will do whatever I can to make sure jobs get done on time.”

Another manager with field service experience is Chris Gessner, service manager. A graduate of Ferris State University, Gessner monitors dispatch schedules, training, and speaks with every service technician every day.

“They know that if an issue comes up, it’s something I’ve been through. They can come to me and let me know what it is, and we’ll solve it,” Gessner says.

Marketing manager Becky Town is on the front lines of Schaafsma’s website presence and social media activity. You can follow them on Twitter
— @schaafsmahvac. A college marketing major, she joined the company five years ago, looking for a smaller company she could help grow.

Town has written a vast amount of copy for the company website. She works with Kevin Walsh on marketing plans and budgets, planning seasonal promotions, and analyzing Internet keyword strategies, for maximum lead generation.

“The goal of our website is to cover every possible HVAC-related category a homeowner might look for, to position ourselves as the experts in the HVAC industry. We do that by providing substantial information on a wide variety of HVAC-related topics,” she explains.

“I appreciate the owners, and would like to see us do well. That’s my drive,” Town says. “Kevin, Bill, and Eric are great people. That helps.”

Distributor’s Praise

The Behler-Young distributorship, based in Grand Rapids for 89 years — considers Schaafsma to be a model customer.

“The owners have a unique chemistry, and strengths that compliment each other,” says Joe Kelly, Behler-Young’s vice president/sales and operations manager, who provides commentary on what makes Schaafsma a special customer.

“I know of several other partnerships, and there can tend to be conflicts with multiple owners. At Schaafsma, no ill word is ever spoken among them,” Kelly says. “You look at how they’ve built their team, and the customer experience they provide: everything is complete and thorough. These guys size equipment properly and follow up with the customer.”

“And, they also expect the same from Behler-Young, and we welcome that,” he continues. “We continue to find new ways to work together to provide a wonderful experience for their residential customers. They’re very progressive, they think outside the box, and the affiliations they have with other associations are absolutely spectacular.”

The Schaafsma Difference

Sales manager Bill Krestakos says Schaafsma stands apart from competitors through its ability to handle whole-house comfort scenarios, which in turn results in a more positive outcome in homes.

“Our biggest competitor builds value by packaging warranties, or maintenance,” he says. “They sell a private label, less expensive furnace. Our ability to look at the whole house is what differentiates us from ‘box sellers.’ There’s a sign in the sales room that reads: ‘We don’t just change boxes, we change lives.’”

Those changed lives include people whose health has improved due to Schaafsma’s attention to home performance issues, as well as the everyday service and installation excellence it provides across the region.

The Schaafsma Sales Team: It’s All About the Customer
Denis Miller: “You treat the home as a system. The thermal envelope is the biggest consideration. You explain to the customer that if the house is leaking air, insulation won’t work properly, and no matter what we do with the HVAC system, they won’t be fully comfortable.”

Jeff Nelson: “Along with the whole-house approach, we sit down with the customer for 30 minutes and ask open-ended questions, to find out what issues they’re experiencing. Where is their comfort ‘pain’? What fixes do they want?

Paul Murray: “Get to know the customer. Let them talk. It’s about them, not us. I try to help them see me as a doctor looking for home comfort ‘symptoms.’ I do pressure checks, load calculations for right-sizing, and thermal imaging, so that I can recommend energy audits or other improvements. Then I sit down and ask the customer what’s important to them.”

Greg Kippen: “What you get from us will be more technically-oriented, not ‘sales’ oriented. We have the tools and knowledge to solve problems. We’re the contractor that comes in after they’ve dealt with others for years and could never get cooling to the second floor.”