2008 Residential HVAC Contractor of the Year: Cream of the Cropp

Mitchell’s three sons — Tim, Greg, and Brian — all serve on the Advisory Board, as well as Vice President of Operations Judy Blair, who has been with Mitch since nearly the beginning.

“I’ve been here 28 years now,” Blair says. “The vision has always been the same, since the beginning. It was, and is, to be the best.”

The rest of the Advisory Board includes: Andrew Oser, sales manager; Charlene Kane, accounting manager; Tim Nettleton, service/branch manager for the Rockville, MD location; Benjamin Kelley, plumbing manager; and Jess Gordon, service manager for the Fairfax, VA branch.

“It’s their goal, and now it’s my goal, to build a company based on taking care of customers,” Oser says. “Everything we do, every program we implement, is based around getting customers for life.”

Satisfied customers just aren’t good enough.

A Family Affair
Today, Mitchell Cropp owns the company with his three sons. Tim, Brian, and Greg each have a stake in the company that is their future, and are poised to lead Cropp-Metcalfe as the next generation.

“They’ve all sort of fallen into their positions nicely,” Mitchell says. “There’s no arguing about who does what; they know their roles and are happy in them.”

Tim, who currently serves as vice president of sales, started at the company at a young age, always knowing that HVAC service was in his future.

“This is something I always wanted to get into,” Tim says. “It was sort of a natural progression, I was just always around it.”

Tim began working at Cropp-Metcalfe before he could even drive — helping out on weekends and during the summer growing up.

“I went to college locally and studied business management,” Tim says. “While I was going to school, I was working here in the evenings and got a true taste of what the business was like, and found out that it was something that was pretty cool.”

When Tim graduated, he started working for the company full time and got involved in the sales side. Once he was into the sales, he says he was “hook, line, and sinker” into the business, because he had experience in every other aspect of the business.

“Prior to that, during high school and college, I did just about anything you can think of,” Tim recalls. “My first day, I remember I walked in here and they gave me a broom, and told me to sweep the parking lot.”

Brian, who serves as the information technology manager, and is learning the ropes on the operations side from Blair, recalls a similar experience when he first started at Cropp-Metcalfe.

“On my first day, they also gave me a broom and told me to sweep the parking lot,” he says. “My father made it clear that we’d have to work our way up in the company; that we weren’t going to get any free rides because of who we were.”

In addition to overseeing inventory, Greg also heads up a new division in the company: home security.

“We’re in people’s homes every day; people who trust us,” Greg says. “It seems like a natural fit to offer these customers another service in home security.”

The security division is just one more way Cropp-Metcalfe continues to expand its horizons with out-of-thebox thinking. Satisfied customers just aren’t good enough.

“My father has never been a closed-minded individual,” Tim says. “He’s always had attainable goals. When an opportunity was there, we were able to take advantage of it and make the most of the opportunity given to us — which allowed us to grow.”

With these three capable men ready to take the reigns, Cropp-Metcalfe is sure to be in good hands for many years to come.

Although Mitchell and Blair aren’t ready to retire any time soon, a succession plan is in place where Tim, Greg, and Brian will step into their roles — and rest-assured, Mitchell and Blair are confident in the future of their company.

“Tim Cropp is the heir apparent,” Blair says with confidence, “and his vision is 95% of his dad’s.”

Idea that Started it All
Having worked for Automatic Equipment Sales, a Carrier distributor, for 15 years, Mitchell Cropp became very familiar with the HVAC industry. He got to know the many of the companies around the area, and he saw a business opportunity for them to do service on the equipment that they had sold.

“As a distributor, I’d meet all the area contractors and I’d tell them, ‘You know, there’s a future in service.’” Mitchell recalls.

“But, I just couldn’t get anyone interested in it. So finally, I sat down with a contractor I knew and asked him, ‘Once the manufacturer warranty is up, what do you do with your customers?’” Mitchell says. “And he tells me he tells those customers to go to the Yellow Pages. He didn’t want anything to do with them after that.”

That contractor was William H. Metcalfe, and according to Mitchell, he was doing installations in about 1,000 homes a year. Mitchell’s next step was a bold one.

“I went to him and proposed a partnership,” Mitchell says. “I wanted his 1,000 customers every year, since he didn’t want to do service for them. He said that was fine with him, but he didn’t want anything to do with it. The service business was mine.”

The Idea Blossoms
That one idea and approach to service is how Cropp-Metcalfe got started in 1979. And as luck would have it for Mitchell, the next year, one of the major manufacturers had a big recall.

“Metcalfe came to me and said, ‘I’ve got about 1,500 of these units that I installed and I don’t want anything to do with them,’” Mitchell recalls. “I told him I wasn’t sure if I had the man-power, but that I’d sure give it a shot.”

Mitchell remembers the recall work being somewhere in the neighborhood of $600 per repair, with about 1,200 to work on.

“That was my big kick,” Mitchell says. “That’s how I really got monies quickly and got started in this business. We had work when other people didn’t back then.”

It was then that Mitchell decided to take his service business one step further; after all, satisfied customers just aren’t good enough for Mitchell Cropp.

“Now, the customers were upset with the manufacturer and with Metcalfe for the recalled equipment that was installed. And the manufacturer still only had a one-year warranty,” Mitchell says. “So, I decided to offer service contracts. Out of that 1,200 that I worked on, I came away with a few hundred service contracts.

“Then, after pushing the service contract the next year, we ended up with probably half of that 1,200 deciding to buy our service contract.”

Adds Blair: “He started with service contracts before it was popular.”

The Cropp-Metcalfe service contract covered everything. They had a maintenance contract the same as most anyone in the industry now does, but their main stay has always been full coverage. If anything goes wrong with the unit, they’ll repair it.

“We did nothing but build on service contracts,” Mitchell says. “The company was founded on service and service contracts — it was founded on the premise of residual revenue, knowing that I could guarantee my men 40 hours of work a week.”

Why Service Works
“We believe that if we treat you right when we do your service work, 10 years from now, when you need to replace that unit, we’ll get the last look, if not the only look, at installing a new unit,” Mitchell says.

When you look at the numbers, a customer may pay $300 to $500 a year for a service agreement. Multiply that by 10 years and you have $5,000 worth of revenue coming in from that customer. In 10-12 years, when that customer needs a new unit, it could be another $8,000.

So, a typical service customer of Cropp-Metcalfe will probably bring the company anywhere from $12,000 to $15,000 over 12 years.

“Some people might say that is impossible, but we’ve proved it,” Mitchell says. “We’ve got second and third generation sales already from customers that started with us.”

Growing Strong Part of the success of Cropp-Metcalfe has been the company’s ability to spot opportunities to grow the business throughout the years. One of Mitchell’s first acquisitions was a company in Rockville, MD back in 1982. Today, that location remains strong as one of the four Cropp-Metcalfe branch locations.

“(Mitchell) wanted to be a bigger player,” says Nettleton, who manages the Rockville Branch. “Our vision is our strength. We want to be the best, and we want to attract people who want to According to Blair, Cropp-Metcalfe has acquired 12-15 companies since that time. Cropp-Metcalfe grew steadily until 2003 — and then it doubled in size.

“In 1984 we bought a company in College Park. The Alexandria branch we bought in 1992,” Blair says. “We just keep buying existing companies that have an established customer base.”

In May of 2003, they purchased a company out of bankruptcy that had 125 employees and 80 trucks — roughly the size of Cropp-Metcalfe at the time.

“We purchased all that company’s assets and doubled our size,” Blair says. “They were located in Beltsville, MD, and that’s where that branch came from.”

According to Blair, finding the right opportunity and the right company to acquire is Mitchell’s bread and butter.

“We’ve acquired some companies, but actually all we’re looking to acquire is their assets, which is their customers,” Mitchell says. “I could care less about parts. I could care less about vehicles. I do care for employees, though.

“We want the employees, and we’re happy to welcome them into the Cropp-Metcalfe family.”

Mitchell says they look at what it costs to get good customers through normal advertising, compared to what it costs to get them through an asset buy, and they’ve done very good at that. As they continued to grow, they grew strictly in service.

“My father has a knack for locating those right opportunities,” Tim says, “and that’s what has allowed us to grow as big as we have.”

Innovative Marketing
“A lot of the success we have is knowing where to market,” Mitchell says. “We know that we don’t do very well in condos or townhouses. Our market is single-family homes in the mid to upper income

brackets.” Mitchell says his company gets challenged a lot on its pricing structure. To charge more, you have to show the customer that they’re going to get more.

Cropp-Metcalfe’s current advertising campaign is the Five-Star Technician. The Five-Star Technician program promises customers that a service technician sent out by Cropp-Metcalfe will fulfill five key criteria: certified, dedicated, experienced, reliable, and professional.

“We have the Five-Star program, which promotes that we have the best-qualified person in the market, coming into their homes; the most trustworthy person coming into their homes; the most-trained person coming into their homes,” Mitchell says.

“All of our advertising will talk about service first, and selling product second,” he says.

Blair recalls Mitchell’s grassroots marketing ideas go back all the way to the company’s beginning. “When we only had about four or five trucks, there was a subdivision that was undergoing a gas conversion,” Blair says. “It wasn’t too far from our office in Fairfax, so rather then send the guys home when they didn’t have any work, he would pay them an extra hour to go and drive around the subdivision.”

As it turned out, all the homeowners in that subdivision needed someone to do the service, and they’d call Cropp-Metcalfe because they saw their trucks in their neighborhood.

“It was the same truck they kept seeing, but they didn’t realize it,” Blair says. “It was name recognition that got us those customers.”

Sales Soar
With a company focused mostly on service contracts, one might think that sales would suffer. Not the case at Cropp-Metcalfe.

The sales department at Cropp-Metcalfe, headed up by sales manager Andrew Oser, boasts four $1 million salesmen — AND one $2 million salesman, Donny Buckingham.

“(When I look to hire a new salesman), I look for someone who wants to take care of customers, not someone who just wants to sell a box,” Oser says. “Someone who doesn’t want to just make a sale, but someone who wants to make long term relationships with their customers.”

Again, the focus is on service. Satisfied customers just aren’t good enough.

Employees are Family
Mitchell Cropp firmly believes in employing the best people in the industry — and he believes if you treat them right, the best people will want to work for you for a long time.

Cropp-Metcalfe believes in offering employees careers, not just jobs. Cropp-Metcalfe believes in training. They have an in-house curriculum — Cropp-Metcalfe University — where technicians learn the latest techniques and can practice on actual equipment.

“A lot of the things we do are things we know we should do. But, we have to make sure everyone is properly trained,” Mitchell says. “We send people to seminars, we send them to Comfortech, and other training organizations and trade associations so that it’s not just coming from myself or Tim. It’s reality.”

Oser couldn’t agree more: “The customer is our lifeblood. But we create a place for our employees to grow and to learn,” he says. “We create a future for our employees. We give our employees a career path. We focus on the training. We focus on NATE certification, so that our employees can be the best they can be.”

Cropp-Metcalfe believes the better their employees become, the better their company becomes. They teach, they learn, they grow.

Part of becoming better is the amount of involvement the company has in trade associations. Not just joining, rather, taking an active role in those associations. Mitchell himself is a past president of ACCA National, past-president of ACCA National Capital chapter, past-president of the Alliance for Fair Utility Competition, and a founding member of The Service Roundtable, among others.

“I’m very much involved in many of the associations that we belong to,” Tim says, “and I’m on just about any board that will have me within those associations.”

Service is King
“Focusing on service contracts;” Tim says, “from day one, that’s been the goal.

The customer has always come first at Cropp- Metcalfe, because to them satisfied customers just aren’t good enough.

Mitchell recalls how that focus first started.

“My father worked three jobs, and in the evening and on weekends he would get me to help him bend sheet metal or install furnaces,” he recalls. “When I graduated from two years at a vocational school, I came back and told him that ‘I ain’t getting into the service business … that he had burnt me out.’

“Well, 15 years later, guess what I was doing. I was in the service business.”

And the people of the greater Washington, D.C. area are sure glad he is. They’ve never been more than satisfied.