The COVID-19 pandemic has caught service businesses and the citizenry up in a whirlwind of circumstances and challenges never before encountered in U.S. history.
Contracting business owners are seeking answers to how to conduct business in this uncertain time. And in some ways, businesses are in varying degrees finding they must virtually rewrite their business plans for the coming months.
In response to this uncertainty, Electric and Gas Industries Association (EGIA) is providing a series of online presentations covering a variety of issues related to COVID-19 and business management in "Navigating Turubulent Times." See the entire series list HERE.
EGIA faculty members who are themselves business owners and consultants provided the first offering in the series on March 25, at the time when many states had begun to issue restrictions on “non-essential” businesses and establishing outright quarantines.
“This information is provided to help guide you through an uncertain time, and it will cover the mindset you should adopt as well as practical steps to take,” said Weldon Long, who provided commentary along with Drew Cameron and Gary Elekes.
Drew Cameron is president and master “Sellutionist” of HVAC Sellutions, a leading marketing support and sales, recruiting, training, coaching and performance enhancement organization.
Gary Elekes is president, EPC Training, and co-founder of iMarket Solutions an HVAC and plumbing contractor and a recognized expert in lead generation and contracting, with more than 30 years’ experience in the trades.
Weldon Long is a successful entrepreneur, sales expert and a New York Times best-selling author. He founded, built and eventually sold one HVAC company, and is now working on growing his second such business. His specialty as a motivational speaker is his “Sales and Prosperity Mindset” philosophy.
Drew Cameron began the session by saying he had been receiving many questions from his consultation customers, regarding how they should proceed attitudinally in this uncertain time, and Cameron said there is only one best answer.
Be positive, and come from a place of faith, love, abundance, and expansion, rather than fear, scarcity and contraction,” Cameron said.
“Some contractors are worried about their businesses and are not sure where to go and what to do, while others are flush with opportunity. I believe in this time, given the fact that HVAC is one of the few ‘essential’ services that is being allowed to operate [during the COVID-19 pandemic] that we are being asked to step up as leaders. Be positive, and come from a place of faith, love, abundance, and expansion, rather than fear, scarcity and contraction,” Cameron said.
“People who are operating from a place of fear are harming their businesses, while those who are not fearful are succeeding. Yes, service calls are being cancelled here and there, but for the most part, they’re able to step up and display to coworkers and to their customer base that they are there to serve. It’s not a question of ‘survive or thrive.’ Why don’t we just change ‘survive’ to ‘serve lives’? — ‘Serve lives and thrive.’”
Cameron said a company’s enhanced leadership role can be exemplified in community outreach that still observes proper social distancing, such as delivering groceries.
Think of what you can do to go beyond the business, to impact workers, the business, the community and customers.
“Think beyond your business, to what you can do to serve people. It should transcend the business. Think of what you can do to go beyond the business, to impact workers, the business, the community and customers. Enlarge your vision, think bigger, serve lives, make an impact,” Cameron said.
Weldon Long added that maintaining the right perspective is indeed the first step to working through COVID-19, and he referred to the Rudyard Kipling poem, "If" as an example of staying on course in times of confusion. “We need to keep our heads about us, while everybody else is losing theirs,” he said, paraphrasing the first line of the poem.
Gary Elekes emphasized the importance of effective leadership within the organization, to keep employees in a positive and courageous frame of mind.
“If you don’t have effective leadership, you probably won’t get much buy-in on whatever operational adjustments you need to make,” Elekes said. “So, the first thing you have to do, is eliminate your own fear. This comes through awareness, having an understanding of the situation, having the facts at your command and maintaining control. Formulating a plan, and communicating that plan is part of what creates the inspiration for someone to follow you. I always define leadership as the ability to create ‘followship',” Elekes said.
The coronavirus situation has put business owners into a position where they must lead from the front rather than from behind, and not leave it to managers.
Formulating a plan, and communicating that plan is part of what creates the inspiration for someone to follow you. "I always define leadership as the ability to create ‘followship,'” Elekes said.
“Collaborative management is good, but in these types of situations, employees are looking to the business owner for leadership.”
“Everybody who works for you will look to you, to know how to act,” Long added. “With the entire economy being closed down for the most part, employees are looking to leaders for social cues, to help them remain focused, strong and committed.”
"We have to make sure we’re taking care of our people, make sure they’re okay about running calls, whether they be a technician, installer or sales representative. Are they comfortable going into customers’ homes? If they’re playing from a place of fear and worry, they’ll project that onto the customer."
Drew Cameron: “Some clients told me certain of their sales people are struggling, and those were the ones who were vocal about being scared. They said customers are scared, and giving them less time on sales calls. The successful ones are proactive, forthright.
"One told me he knocks on the door, steps back from the door, introduces himself and tells them he is not sick, has not tested positive.
“If you show fear, you’ll cause customers to feel afraid," Cameron said. "Tell them you will have a 'contactless' call and that you will follow the CDC guidelines and your own company’s protocols. You can hand out those protocols. Your dispatchers can also direct customers to find those protocols posted on your website. Put on shoe covers, mask and gloves upon entering. Don’t show up at the door wearing a mask and gloves. Also, make sure you tell them your sanitization procedures. That eases their mind, if they know you will be walking through their home. They’ll be ready for it and won’t operate from a place of fear. I call that ‘setting up-front expectations.’”
Fundamentals
With some customers postponing service and installations, and others cancelling outright, Elekes said it is essential to review the fundamentals of what constitutes a good business plan and determine what adjustments must be made.
“We always begin our business planning with a sales forecast: gross profit dollars, the expected ability of a company to produce those GP dollars, and itemizing your fixed and variable expenses. A review of your financial structure comes first. Some of the business owners listening to this discussion have lots of cash, and some have bank lines of credit, and some don’t have either of those. We can’t put the roof on (marketing and selling) until we know what the foundation looks like.”
With some customers postponing service and installations, and others cancelling outright, Elekes said it is essential to review the fundamentals of what constitutes a good business plan and determine what adjustments must be made.
The second fundamental Elekes said must be reviewed is sales and marketing, and how to communicate sales and marketing messages in light of the current conditions. This includes the use of email, social media and other digital connections that help a business reach out to customers and prospective customers.
“Tell customers your procedures and standards, how you’re going to take care of them, and which products you want to market and sell. Create engagement,” Elekes advised. “We’re leveraging digital media for marketing and sales communications, more than ever before
Weldon Long recommended the app by Rehashleads.com to get back in touch with past leads gone cold.
“I got a customer in Dallas who uploaded the app Friday afternoon, and
dropped 23 of her lost leads into the app. She called yesterday to tell me show had sold seven systems to 26 previous ‘no sales.’”
Elekes’s third business fundamental for success in these turbulent waters is an internal review of operating procedures: including electronic dispatch, guidelines for those who would be working from their homes, and company procedures for service and installation, with regards to communicating with customers.
“Under the heading ‘This is What you Should Expect From Us,’ we’re basically educating people, and removing opportunities to create their own fear," Elekes explained. "We tell them that we will wipe the tablet before and after we hand it to you. We will wear asks, booties, use Purell sanitizer and more. All of those procedures make for effective communication for techs, installation crews and dispatchers,” Elekes said. Dispatchers even work from multiple scripts depending on customer responses.
The fourth fundamental is addressing human resources, which Elekes said is the most important part of the conversation: making sure your employees are healthy.
“We’ve given all of our installers and technicians the opportunity to call off of a service call if there are issues that make them uncomfortable.”
Elekes now holds daily “digital huddles” with managers from all of his three companies.
Long added that when people call in to his company, the CSR informs them that none of its employees have tested positive or exhibited any of the virus symptoms, and if they were to show signs, they would not be sent on the road.
Reinforcing Best Practices
Drew Cameron said COVID-19 presents those HVAC contractors who have not done so, with an opportunity to embrace best-in-class practices they actually should have been using for years: such as air flow analysis, load calculations, and air quality analysis.
“Some contractors try to shorten calls, even before COVID-19. You want to be sure you’re not taking any chances with airflow The best chance we have to keep families and environments healthy and safe is to keep the airflow moving. This is the time to double down on that which we know we should be doing as HVAC contractors, to get things right.” “Acknowledge that people’s homes are their sanctuaries. Now’s the time to make sure that space is taken care of. Tell your customers, that while their home is in lockdown, that you’re doing everything in your power to respect that as you always have, but also taking action to protect people in and beyond their home. I’m not looking to freak anybody out with suits and masks. But I want them to know I want to protect them, my family, co-workers and people in the community."
Leveraging Technology, with a Caution
Email and app technology has in some ways cut off contractor/customer interaction. According to Cameron, even prior to COVID-19, contractors have too often gotten into the habit of emailing estimates to prospects.
“I understand that you get requests to do that,” Cameron said, but my protocol for that is, if you’re going to email quotes, do not email a quote without also having a phone or video appointment scheduled with the customer, so they’re in front of the computer or on the phone with you to discuss the quote. I’m also not sending their proprietary and financial information to an unattended email inbox. Protect their information, schedule the appointment, send the email, and make sure they can open it and the attachments. Then schedule a phone or computer video appointment.”
Financing Options
Financing for system installations can be ideal at this time when “cash is king,” for homeowners as well as business owners.
“If there were ever a time to become good at offering financing, now is the time,” Cameron said. “And don’t offer only the 0% options. You have to be offering other payment options, such as 6.99% for 10 years, 9.99% for 10 years, as well as 0% for up to 36 months; but don’t go beyond 36 months.”
Cameron continued to say that closing ratios are up with the companies who are embracing these options, whereas, those businesses who are playing scared are seeing lower closing ratios. “And, those who are blindly emailing quotes are seeing closing ratios are way down.”
THIS LINK provides information on financing options available through EGIA.
Products Can be Suggested
Contractors will be asked about air purification and filtration products. It's a natural subject to discuss at this time. Suggest but don't be pushy.
"If you are accused of profiteering, don’t be offended," Cameron said. "Tell the person you want to err on the side of caution, and people are asking for product information. Our job is to inform customers so they can make good decisions, empower customers with information, and bring added value. "What could you do that no other competitor would consider doing?" Cameron asked.
"I’d rather apologize once for over-communicating.Your goal is to leave the home better, healthier and safer than you found it."
Hoarding Cash for Potential Long Haul
Weldon Long emphasized the importance of bolstering cash reserves for the days that lie ahead.
“Hoard every dime you can,” Long said. “We had cash on hand, but when all the finance companies offered to postpone vehicle payments for four months, I had our managers get on the phone with everybody we owned money to for vehicles, and got delays on payments. We got 120 days of breathing room for paying on eight vehicles.
“I’m looking for every opportunity to get my hands on more cash. If you miss a payroll, and a couple payroll tax payments, you’ve got serious problems. Consolidate where you can,” Long continued. “I’m not saying to lay people off, but consolidate. If you owe money, if it’s a credit card payment or other credit item, we pay it. If we can postpone it we postpone it. I talked to our distributor about possibly being slow with payments for the next couple months, and they understand.”
CLICK HERE FOR INFORMATION ON THE Small Business Administration's Paycheck Protection Program.