Question: Our company has recently instituted a new policy for requesting time off when another employee is already scheduled off and/or an employee who covers for the new requester's time off will be covering someone else and/or on vacation themselves consecutively with the new request. We have limited employees and only a few employees that cover for other employees. We have implemented that no two employees may be off at the same time and that all employees must review the vacation calendar prior to submitting a request for time off. All employees have access to the vacation calendar and it is updated each time a request has been approved. If an employee needs to request time off during either of those situations, we have requested that the employee provide a reason that they need off so that we can make a determination whether or not to approve the request.
We have one employee who refuses to provide a reason and is requesting time off when another employee is already scheduled to be off. The person who covers for the newly requesting employee is off on the day after she would be required to cover for the newly requesting employee if she was granted time off. She refuses to give a reason, just states, "it's personal," and therefore we have stated we could not approve the time off. We do not normally request a reason when employees request time off, only in this special circumstance do we ask a reason. We have been having many issues arise when we give two or more employees off at the same time in the past and have instituted this new policy as a way to avoid this issue in the future. All employees were notified of the change in December, prior to the institution of the change. Can we deny her request for a personal day if she does not provide a reason?
Response: We are not aware of any law prohibiting the employer from denying a vacation request under the circumstances you describe. You advise that the employer asks employees to disclose the reason for time off requests only when there would be a resultant lack of coverage if the request is granted, which is something the employer is willing to allow only in emergent or other legitimate cases (and we trust this includes cases where the time off may be required by law, such as to accommodate a disability or sincerely held religious belief, or for jury, witness or military service, etc.). To the extent the employer's policy is clear on this issue (and you indicate that it is), and an employee is refusing to disclose the reason for her request, we are not aware of any law that requires the employer to grant it based only her assertion that "it's personal." Indeed the employer cannot ascertain from such a vague explanation whether the request for time off is protected by law, and where it is not (and the employee would need to let you know if it was), the employer is not required to grant the time off as requested pursuant to your company's policy (which you advise grants the employer some discretion here). The employer must ensure, though, that a time off denial in this situation is consistent with employer policy and practice to avoid discrimination concerns.
(Thanks to our friends at Federated Insurance for providing this content.)
It's time to have a little fun and qualify for a chance to win a free admission to a future Monthly Meeting ($30-$40 value). Take a moment and copy the word search puzzle below and open in a document. Then successfully find all 35 words, scan the document, and e-mail to firstname.lastname@example.org. A winner will be selected before the next monthly meeting. Good luck!
Hey HVAC contractors – do you ever wonder what's the best way to communicate with your customers or prospects without bugging the !?$#! [crap] out of them and wasting their valuable time? Phone calls are irritating (especially during dinner); text messages are an invasion of “space”; and heaven forbid a knock on the front door from a solicitor.
I have been conducting an on-going survey on what method of communication people most likely use to send or receive messages. As of December 1st, 58 people responded to the online survey (and you are welcome to add your opinion via a web link at the end of this story).
It should come as no surprise that the most popular communicating method is e-mail. It was an overwhelming favorite in this survey – so far. And I didn't include faxing since some people don't even know what that word means.
Here are the results in a condensed version:
Conclusions? People don't talk to each other any more. Advertise via e-mail and make your presence known on social media!
On Friday, October 24th, I participated in mock interviews with students at FSU HVACR School. As a member of the Advisory Board for this school, I do this once-a-year drill as the interviewer, asking a variety of questions of students in a 15-minute time period.
Rather than write a complete wrap-up of each of the eight interviews, here are some highlights of what was discussed during the Q&A sessions:
Michigan Department of Licensing and Regulatory Affairs (LARA) Director Steve Arwood today warns Michigan corporations of a non-governmental entity trying to collect a $59.99 fee to obtain a certificate of good standing. The misleading compliance solicitation implies that a certificate of good standing is required to comply with state business formation requirements and is designed to look like an official document, but it is not.
“Michigan corporations and limited liability companies are not required by law to receive a certificate of good standing from LARA's Corporations, Securities & Commercial Licensing Bureau to comply with the State requirements for entity formation,” said Arwood. “Our customers should disregard these deceptive notices as they are not from the State of Michigan.”
Information received by LARA's Corporations, Securities & Commercial Licensing Bureau,Corporations Division indicates that new businesses formed in other jurisdictions (such as the state of Arizona) are being targeted with these solicitations once they file their Articles of Incorporation or Organization. These businesses are being sent what appears to be an official government form advising them that there is one more step necessary to comply with state requirements. ( See the bogus Arizona Business Filing Services' 2014 Certificate of Good Standing Request Form.)
At this time, there are no confirmed cases of Michigan businesses affected by this scheme; however, Michigan businesses should continue to be vigilant. “Unfortunately, these misleading mailings offering assistance for non-required services continue to go out and create confusion,” Arwood said. “Michigan businesses are not legally required to obtain a Certificate of Good Standing to comply with State law.”
The phony letters can look authentic. They may be addressed to the corporation or limited liability company, the resident agent, director or officers; cite a Michigan statute or a federal statute; and may appear to be issued by the Corporations Division. If such notices are received, they are to be disregarded because they are neither issued by LARA nor any governmental agency.
If you need of a certificate of good standing, you may contact the Corporations Division directly at (517) 241-6470, Monday-Friday from 8 am – 5pm EST. Requests for certificates of good standing may also be faxed to (517) 241-0538 using form, CSCL/CD 274. The cost for a certificate of good standing (Corporation and Limited Liability Company) is only $10.00.
Any Michigan corporation or limited liability company that receives a notice that they need to obtain a certificate of good standing and pay a fee to avoid noncompliance with State laws is advised to do the following:
Legitimate notices and mailings to Michigan corporations and limited liability companies are issued from the Corporations Division and are mailed to the resident agent at the registered office address on record. When receiving any official-looking document, please review carefully and read the small print. If you are not sure, please contact the Corporations Division at (517) 241-6470.
Customers with questions about their corporation, limited liability company, or limited partnership are encouraged to use the Business Entity Search at www.michigan.gov/entitysearch to check their status. If an annual report or statement needs to be filed, customers may file online using www.michigan.gov/fileonline. Additional information is available on the Corporations Division website at www.michigan.gov/corporations or by calling the Corporations Division at (517) 241-6470.
When it comes to “high tech” even some the most educated and “hip” people out there – a.k.a. college students – agree that selling high tech features of a product have limitations. There's more to selling than talking high tech – a lot more.,
I recently paid a visit to Ferris State University, where I am an Advisory Board Member of the School of Heating, Cooling and Refrigeration (HVACR) Technology. One of my duties in this voluntary position is to meet with students in the HVACR field and discuss their views on technology, education, and the job market.
This time around I wanted their opinions on what “tekkie buzzwords” can be used to sell heating & cooling products and services. After all, heating and cooling does not rank near the top of most selling discussions – if it ranks anywhere at all. But the introduction of “smart” devices to everyday lives has had a profound impact and HVACR is keeping up with the trend. One such smart device is the Nest® thermostat, which actually programs itself to the lifestyle of building occupants.
So with this in mind, I asked about 30 students how they would sell tekkie devices like the Nest®. We came up with some interesting buzzwords and phrases including:
When asked to explain why these buzzwords are important, most students said it was because people wanted to save money – bottom line. If energy savings resulted in lower monthly utility bills and faster payback of system installation costs, then almost any buzzword would work.
Notably absent in this discussion are any “high tech” terms. According to these Ferris State students, if you strike a chord emotionally, all the tech talk is for naught. One said, “Basically, if you paint a product green people will buy it.”
Another added, “If you use green you have to tailor it to your audience. An engineer sees green differently from a housewife.”
In fact, most of the students I interviewed said that selling high tech should not be the number one priority in the selling process. They preferred to give me their own priorities – a “Top Ten” if you will – and not in any particular order.
Of course there will always be the customers whose emotions are stirred by other events, i.e. environmental impact or “carbon footprints.” One student joked, “Some people sleep easier at night if they know they are saving a dolphin.”
Pretty smart kids, eh?
Ventilation Damper Requirements of the Michigan Uniform Energy Code
By Jonathon Paradine, Assistant Chief
The Mechanical Division receives numerous calls regarding mechanical ventilation damper requirements in one- and two-family dwellings in accordance with the Michigan Uniform Energy Code (MUEC). Section 403.5 states “outdoor air intakes and exhausts shall have automatic or gravity dampers that close when the ventilation system is not operating.”
Some of the confusion comes from not knowing the difference between combustion air and ventilation air. The MUEC defines ventilation air as “that portion of supply air that comes from outside (outdoors) plus any recirculated air that has been treated to maintain the desired quality of air within a designated space.” The Michigan Mechanical Code and The International Fuel Gas Code both define combustion air as “air necessary for complete combustion of fuel, including theoretical air and excess air.”
With that being said, the damper requirement would apply to ventilation air only, not combustion air. The 2009 Michigan Residential Code states the opening shall directly communicate with the outdoors or through a vertical or horizontal duct to the outdoors, or spaces that freely communicate with the outdoors. Inadequate combustion air is a code violation and has the potential to cause health and safety issues related to carbon monoxide and venting of products of combustion.
Contact the Mechanical Division at (517) 241-9325 or email@example.com with questions.
What's in an HVAC contractor's name? And is it enough to make a prospective customer pick up the telephone or send an e-mail request for service or replacement? I made an online survey asking HVAC contractors that very question. And I asked some if they would choose the same reason as the prospects.
Here was the question, which ran from mid-May 2013 through mid-June 2013:
“Based on name only, which company do you think homeowners would call for service or replacement of mechanical systems?”
A total of 221 people replied as of June 25 (ongoing survey) and here are the latest results:
Fifty respondents were asked if they would choose the same company as prospective customers and 62% said they would while 38% said they would not.
The results show that contractors believe that their customers care more about timeliness than anything else. It also showed that price was not a factor when choosing an HVAC contractor with price in its name, proving that these results indicate that time is more valuable than money.
The survey also initiated a large number of comments and commentaries, some of which are highlighted below, in edited form. First, the one-liners:
While most respondents didn't pledge loyalty to any one name, many used logic – or standard perception – as to why customers would choose one over the other. Here are some replies to the ‘On Time' logic.
Phil Gatto said, “Shakespeare said, “What's in a name?” In this exercise we must assume that the customer has no other information, other than the name, available to make the selection. Therefore, what leads the customer here is not just the name per se, but the perception it will create. Most mechanical service related predicaments customers find themselves in are likely to be time sensitive. Therefore, in absence of any other persuasive information to drive decision, the name with On-Time offers hope, suggesting an acknowledgement from this business that it does in fact identify with the value of the customer's time, and it will strive to make those provisions that will be necessary to stand up to its name.”
Carl Isbell said, “I voted for On Time. Our industry gets a lot of bad pub for not being on time. To the professional community, time is money and services rendered “on time” have a lot of value to them. If the dispatching and call taking people are properly trained, (and believe me they are monitored and highly trained as first line of defense to book the call) they will sell and explain the value of the name.”
Matt Prazenka said, “If you are branding a new company, close your eyes. Say the name, and what image does it bring up? The only choice in my mind would be On Time as Perfection sounds expensive and the rest are either blank or negative images.”
Some respondents chose the “lesser of all evils,” including the next four.
Kristie Burch said, “Tom's sounds like a one truck operation: will he be in business tomorrow? Best Price is not what I would look for: best work. Main Heating & Cooling says nothing about the company. Perfection is a bit lofty and sounds pricey. One Time at least makes me a promise that is reasonable and important to me.”
Robert Hutchison Jr. said, “I went with On Time because that is the one I initially felt most comfortable with. Honestly I don't really like any of them. The On Time rings of high price, Tom's rings of one trucker cheap guy, Best Price? I don't think that you should ever have price in your name.”
Kevin Chenoweth replied, “As with other poll respondents I found none of the choices very appealing. I agree mechanical doesn't work well for residential customers. Perfection sounded a little over the top. On Time sounded local.”
Samantha Foster said, “At first glance, I would not choose any of these companies. I chose On Time because it was the only one that didn't sound horrible. No one goes on the name of the company anymore, the Internet plays a huge role in which company a person chooses to work with, i.e. reviews, websites, testimonials, social sites, etc.”
Some respondents preferred more than one answer, too. Steve Wilson said, “I chose Tom's, because I at least want to believe there is an individual I can hold accountable. Not sure that Wendy is going to return my call if I am dissatisfied with my lunch, but the old school in me still leans toward someone who is willing to risk their name to their reputation. Then again, I think On Time conveys a desired result, but who is accountable? Tom or Time?”
Bob Gee said, “In my opinion the only way that Perfection or On Time would work is (1) if they were tied to a strong personality. What are you promising with perfection or on-time? Just what the customer expects and what every contractor says he will do. So what? (2) If that strong personality was everywhere saying that he guarantees on-time or...and perfection in the customer's eyes. Let's face it; has anybody ever produced a “perfect” installation or service call? It's not what I promise; it's what I am willing to do if we screw up some time.
One respondent distinguished between what he would call his company and what a customer would respond to. Roger (R.J.) Allen said, “Perfection or On Time is the name I would choose if it was MY company and I had to choose between those names. However the question was: what would customers choose? I think that the majority would choose Best Price because they would be higher in the phone book and even though there are a high number of people that want quality or value their time enough to want someone who is On Time. I would think Best Price gets the highest volume of calls.”
The next most popular choice was Perfection Indoor Comfort – but it had its doubters, too.
Julie Valvo said, “I voted for Perfection, but mostly because I thought it was the best choice but not the best name. I agree with using a name, or a location, but I didn't vote for Tom's because I didn't like “service company.” It sounds dated. Perfection puts an attribute of quality into the mind of the consumer. While price is a concern for folks, I don't think it is the number one concern and to put Best Price in the name, to me sounds cheap and would not lead me to pick up the phone and call.”
Billy Jobe said, “I am not sure of the names listed I would choose any one in particular. I did however choose Perfection Heating and Cooling. A contractor that strives for perfection in installation, and service is the one who comes out on top in the end. For my needs I would choose the contractor that offered the entire package, and stood behind their work. Proper sizing, installation, and complete life coverage of a product (service contracts), to me is more important than cheap prices. A contractor, who takes time to ensure this, satisfaction, is where my money would go.”
Randal DeHart said, “I chose Perfection because I am willing to invest in quality rather than trying to save a few dollars. Three years ago we had a new HVAC system installed for our contractors accounting services office and I chose the installer that offered top of the line equipment and a service plan. It was one of the best and in the long run and least costly investments I have ever made. I wrote an article about the enormous amount of money lost when a company employee wastes ten minutes a day that says it all.”
Nate Henry Luedtke said, “I like the Perfection route the best in this scenario. On Time makes me think of a national franchise which may lead to brand confusion at a minimum. I don't think Perfection is the best word, but that idea is appealing and sounds pleasant. Homeowners view their need for an HVAC shop as an inconvenience, so a perfect experience sounds like it could take a little stress away.”
Trish Holder said, “I chose Perfection but I really don't like any of them, and I wouldn't put too much into the name anyway. But I would avoid an HVAC company that boasts best price. If this is all they are interested in, I know I'm definitely in trouble. A name that reflects reliability or integrity is something more likely to appeal to me – although, again, I really don't put much in a name.”
It wasn't the most popular choice but it drew some interesting replies.
David Holt said, “I picked Tom's because it had a personal name. But I wouldn't call it “Service Company.” My grandfather started Holt Service Company back in 1958. If you looked at the name alone, you would have no idea what type of service we provided. We were a full-service HVAC company, but even some of our own service customers didn't think we did installations because our name just said service.
“I like the idea of a family name in the business because it brings personality and credibility to the conversation. Look at all the huge companies out there with people's names - Abbott Laboratories, Abercrombie & Fitch, A.G. Edwards, Anheuser-Busch, Archer Daniels, Avery Dennison Corporation, Bacardi, Bang & Olfsen, Barclays, Barnes & Noble, Baskin-Robbins, Bausch & Lomb, Bayer, Beck's, Bell Telephone, Ben & Jerry's... you get the idea. Each of the companies was founded by someone who believed in their product or service so much that they were willing to stake their name on it!
“All family members, whether they work in the business or not, impact the brand by virtue of their last name. Some people think it is harder to sell a company based on a family name. If only value the business has is the family name, then they are right. If the business truly operates in a profitable manner and the proper 'systems' are in place, the business has value beyond the family name so I find that reasoning to be false. If I were to start another HVAC business today, I would name it something like “Ultimate Indoor Comfort by Holt.” That says what we do and who is behind it.”
Bob Gee added, “I like Tom's – and I would have Tom in all marketing, his picture in all print advertising, billboards, etc., messages from Tom on radio and TV, and a promise from Tom on all sales contracts. People buy from people. They don't fall for gimmicky names. They don't imbue trust.”
Roger Grochmal said, “I have always had a problem with a company that had to list its principal quality in its name. Domino's Pizza was built on the premise of being on time. However, their name was Domino's not On Time Domino's. Your reputation and thus your brand are based on the experience people have with you not what you want them to believe. On that basis, my vote goes to Tom's who has the courage to put his own name on his business and stand behind it.”
Although some people didn't name Tom's in their reasoning, their responses implied that customers look for a local, established name to do business with.
Carl Isbell said, “There is something to be said about the Mom and Pop shop. Excellence is hard to deliver and when you get good at it, it is worth whatever you deem “fair price.”
Alicia Bradshaw said, “I grew up in a small town and lived half a block away from the family who owned an HVAC business. Forty years later this company's downstream owners still have our business. My mom had the house properly tested, air-sealed, and insulated a few years ago. We remain loyal to the company that installed the HVAC system when the home was constructed in 1968. Today, people relocate. The marketing answer, in my opinion, is to go with a local name and stay with a local name. It is easier to rehabilitate (if needed) an established local name than to launch a new brand.”
Although it was the least popular choice, there were some respondents who chose this because of HVAC customer's “mentality.”
Steve Smith said, “In this day and age of stagnating personal income and tumbling home values, price is king. Why would I pay a flat rate contractor top dollar pegged to pre-2008 dollars, for example, to fix and/or replace anything without a corresponding drop in price? Because the tech's on time? He wears booties in the house? He just spent a day of paid time to attend seminar in order to sell me more than I need? I could care less. Cheap Price would be better answer than Best Price but I'll take it.”
Jayson Goff said, “I would like to think that most would want perfection or even that their contractor was on time. However the question asked that we try to ascertain how a customer chooses their goods and services. I chose Best Price Mechanical. Wal-Mart didn't become the world's largest retailer by being perfect or delivering consistent products or customer service on time. It is their low prices that bring the masses through the door. This is an unfortunate truth. Does this mean that a contractor should only focus on delivering the lowest priced product in town? Certainly not, in my opinion. At least that is not the way I approach this business practice.”
Dave Wells said, “Those of us in the trade see the value in using attributes in a name (Quality, On Time, Top Notch, etc.). But don't you think homeowners have a different mentality? Aren't most consumers price shoppers more than any other attribute?”
Some respondents went beyond making simple one-line comments and expressed their opinions on the mentality of HVAC contractors and consumers. Here is some of the edited feedback.
Bob Gee said, “Tons of research shows that price is NOT the basic mentality of the customer but it certainly is the mentality of too many contractors. If price was the primary motivator, the lowest priced brands installed by the lowest priced contractors would be dominating industry sales. And, of course we know that's not true.
“It is so sad that we undervalue what we have to offer in this industry. Too often we back in the door apologizing for our prices. How much have Chevy Impalas gone down since 2008 because of stagnating income, etc.? How much have their service departments revised their flat rate books downward? We cheat the customer when we don't tell them the facts about quality, health benefits, cost savings, ROI, etc. and help them buy what is their own best interest. Do we think we are a hero by shooting them a cheap price that will buy a system that will not meet their needs, solve their problems or recommend replacement when it is not in their best interest? We're not. We are a villain and are more likely to lose their future business.”
Sylvan Tieger agreed with Gee and said, “I bought a New Lexus GS350 with every option available. I could have spent over $40,000 less for four wheels and a motor. CHEAP is not always the best way to go. Some folks like living in a beautiful home while others settle to live in a cave. If a contractor wants to work cheap and rob their own family from having a better life, more power to them. The world needs cheap contractors and lawyers and doctors who instead of making several million a year are content making $30,000 or less. In life, one normally gets what they pay for and charging cheap prices means their employees are the bottom of the gene pool as why a decent mechanic would not deserves $50,000 or more year?
Tieger continued, “The problem with “on time” means you have people hanging around an office waiting for a call to come in. I can normally guarantee the first call between 9 -9:30 A.M. but after that it is anyone's guess. A “smell of gas call” can take a few minutes or hours to test the system. Being a professional like a doctor I have a waiting room full of patients and if they are in a hurry there are the Yellow Pages so they let their fingers do the walking and hire someone who has nothing better to do then wait for a call to come in.
“My grandfather started a roofing company in 1913 in New York City. My uncle went into it after World War II and my cousin is still running the same company with the same last name. It is very rare to find a service company being around for three generations and those that are normally have accounts just as long. I started my own company in 1982 and now find I am working for second generation of accounts.”
Alicia Bradshaw added, “My grandfather founded a car dealership in 1937 and my aunts, uncles, sisters, cousins, and I always mind our manners to protect the family brand. Many of us have worked in the company in some capacity.”
Bradshaw added some advice, too. “Open your local Yellow Pages to the A/C and Heating pages (there are a couple of categories for our business), look at the ads, and don't use in your advertising the words and phrases other contractors are using.”
Gee added some other advice, “Want to get out of the rat race? Do something unique. Dress your service and installation people in custom uniforms with clip on red bow-ties. Put red bow-ties on the sides of your trucks, billboards, owner in TV ads, etc. “If you want quality installation and service, Call the Guys in the Red Ties.” Techs appear in ties when fronting with the customer and then slip them in their buttoned down pocket and go to work. Then, if you are truly good at what you do and perfection is built into your process and culture, guarantee everything. Anybody know a service company (in another industry) that does this now?”
And then there is a voice from the Internet generation, who didn't like the choices at all. Kimberly Jape said, “I did not care for any of the names offered. And you have to be careful with a descriptive name, because in the Internet age everyone's really creative (sarcasm) and snark seems to be the flavor of the week. I can hear it now: “You should call yourselves “Never On Time Heating & Air!”
So what do you think? The survey is still going on and your feedback will continue to be used in any future updates. Visit http://www.surveymonkey.com/s/NY8QTL5.
When one thinks of a drain, it conjures up an emptying procedure. That's how a lot of HVAC contractors view controllable business costs that put a constant drain on their profits. Too much overhead empties profits and forces drastic actions – and sometimes a shuttered business.
In a recent online poll at Linkedin.com, 72 people responded to the question, “What has been your company's biggest controllable profit drain?” They were given multiple choice answers are here are the answers and number of responses/percentages.
Obviously the answers were pretty lopsided toward un-billable hours but several respondents added comments, lamenting on some other reasons why profits keep draining away.
Robin D. Sykes said, “It's an accountability issue with the scarce labor pool here in Houston. “Field labor should not exceed 20 %, however, in the first quarter it was 24% . We just initiated a “revenue per truck per week requirement” before commissions are paid. Techs firmly believe that commission is a God given right.
Dusty Rhoades replied, “I voted for ‘employee theft/carelessness' but I believe that most could apply equally. You should adjust your labor rate to take care of unbillable time. We try to call the customer after each job and question them about what tech did and how they did.”
Michael Fahey added, “I believe inventory control and employee theft are one in the same. They give a triple whammy to the contractor as it also effects billable hours.
“Let me give an example. A service tech visits a home. The customer offers cash for repairs and agrees to pay the service charge by check. The tech then makes repairs, uses company time and company parts; but there is only a service charge. Unless the inventory is tight and controls are in place in the warehouse to stop techs from taking parts, the tech can simply put the cash in his pocket.”
Craig Jones had a litany of reasons for profit drains, “Insurances, i.e. healthcare, auto, life, disability, building, unemployment, FICA, liability, umbrella, etc.”
Jim Megilligan said, “There's too many tradesmen out there from us having to downsize. I spend more time on the phone now than I ever did feeling the customer out. I find most of them only want our professional expertise. So I turn that around on them. First, I legally can't show a customer how I'm going to do a job. I ask the customer what your requirements are and then I give them a range of price in similar jobs we have done. If they sound convincing to me that they sincerely are looking for a qualified, licensed and insured professional I would be glad to go from there. “I've been doing this for 35 years and most of work is repeat customers. People who don't know you are scared of you because there are too many rip-off artists out there. If they haven't been ripped off themselves they believe what they see on TV.
“The real answer is low prices by the completion, and unlicensed and un-permitted activity.”
Kay Kinder said, “Our contracting business charges a dispatch fee to send a licensed technician (plumber or gas fitter or HVAC technician) to give estimates. When customers tell us on the phone they already got free estimates so why would they pay for ours, we tell them the truth:
“If you are looking for the cheapest prices then you aren't looking for our company. We only hire licensed technicians and all our work comes with a $5 million liability plus one year parts and labor & a one year customer satisfaction guaranty. We couldn't offer those kinds of guarantees if we didn't provide exceptional services. Our company will never cut corners in order to get a job. We also believe in fair prices for the work done - so we will never be the cheapest or the most expensive, but we will be the best. Did you want to go ahead and schedule a licensed technician to come out and give you that quote?”
“You'd be surprised how many homeowners decide to pay the dispatch fee once we provide them with that information. The few who want cheap are welcome to go to the other companies as they tend to be customers who will try to nickel and dime the prices down even further after the work is done. We have amazing customers who never negotiate prices, they know the value of our work, and they appreciate the care we put into taking care of their homes.”
“It is true that with hard economics it is more difficult to make customers see the value of our industry - but it is still possible to earn our worth through educating consumers. You set the values and standards by which customers will treat you by the way you present yourself.”
Kurt Dodge noted, “To me, there seems to be a lot of former employees of HVAC companies who got downsized in the economy of the last three years or so and who have decided that they can run businesses better than their former bosses. By lowering the prices of services and products to gain a foothold in the marked, they have reduced the perceived value of what we do. We are selling furnaces and air conditioners for less (up to 15% in some instances) than we did four years ago, just to have work and be competitive in the market.”
Ray Isaac said, “There are several things that are hard to control including government regulation and the resulting costs, insurance premiums, unapplied time during the slower seasons, utilities and fuel, and what we call “Customer Extortion, which is, “Unless you give me $X or X% off the job, I'm going onto Yelp, Rant and Rave, Angie's List, BBB, Attorney General, Google, Etc., Etc., Etc. and tell them what a crappy company you are.” This is the way of the world now and god forbid you make an honest mistake on a job, because it will cost you. Just one bogus lawsuit or claim can cost thousands of dollars.”
There is an age old brick wall to successful sales – price shoppers. Sales are lost by the slimmest of margins – and maybe a few dollars or cents. But there are ways to steer potential buyers away from making purchases based solely on price. I recently conducted a 30-day poll at Linkedin.com and asked one question: “How do you overcome price objections when making a sales presentation?” I provided some multiple choice answers and asked for write-in comments too.
There were a total of 177 responses on the poll that ended 3/16/2013. Here are the choices and the number of responses, from most to fewest:
I was a little surprised that more respondents didn't emphasize their own brand, which is their company experience & reputation. But it is clear that showing what the payback is on a purchase and how it will benefit the buyer are keys to moving away from price objections.
Good stuff, eh? If you think you have a better or alternative way to avoid price objections please drop me a line at firstname.lastname@example.org.
It's All About "Process Mapping"
Frank Besednjak gave a presentation at the ACCA National Conference on February 27th in Orlando, Florida on the topic of “Process Improvement for Service Contractors: Getting the Work Out.” He stressed that it is more important to manage the work process rather than managing people, adding “many HVAC businesses close because they don't have a process.”
Besednjak cited McDonalds as an example of a company that had a good process, which he called process “mapping.”
He said that process mapping is “a technique where a business process or workflow is converted into a visual, step-by-step diagram. Process mapping is used to better understand an existing process and to help develop a more effective one.”
Process mapping includes the following key points:
Besednjak also listed eight key components and results of the process map:
“A process map is like a recipe and it only works if you follow the recipe exactly,” Besednjak added. “You also need people to manage the mapping and people to follow through.”
Not only will a process map improve overall business performance, it can result in a more efficient operation, including job checklists, better methods, less mistakes, happier employees, happier customers, and improved profitability.
For more information on this seminar and other presentations by Frank Besednjak, visit www.frankpresents.com.
Yes, that's a pig
The “Mechanical Town Hall” seminar, presented by Contractor Magazine at the 2013 AHR Show in Dallas brought together a talented group of HVACR professionals, who discussed various aspects of the business from their own perspectives. The January 28th event featured:
Here are some highlights from each presentation:
Yates is big on acronyms, such as ECV (energy conservation value) and ROI (return on investment). He said that the HVAC trade needs to let people know about their total energy costs for the equipment they purchase – but it doesn't. “The EPA estimates for operating a vehicle are posted on a car sales sticker, so why can't the HVAC trade do the same thing,” he asked.
“ECV measures the reduction in fuel usage from new equipment to existing equipment while the ROI helps to increase the real estate value.”
Foley said there has been no downturn in the economy in the Washington D.C. market where he does business. But he said that the key to success, especially during a recession, is to diversify. He owes much of his success to the service part of his business even though it is one of the smallest parts of his business.
“We are diversified because success does not depend on one sector of the business,” he said. “And the sexiest part of our business – large custom homes – is successful because we place a lot of importance on interpersonal relationships. Face-to-face with customers is very important.”
Barba used the comparison of an HVAC to system to a pig. “It eats fuel and poops heat or cool,” he said.
He said that contractors should ask themselves the question, “What is the benefit to customers – to get a better pig or a replacement pig?”
Barba noted that a new pig (more efficient) should eat less but still poop the same heat and cool. “Selling efficiency is a benefit,” he added. “Financial arguments are just not enough.”
Rohr spoke about renewable energy and how HVAC contractors can use their experience to cross over into markets like solar thermal, photovoltaics (PV), wood/bio fuel, geothermal, and wind power.
“Natural gas may be cheap now but when it is exported, prices will go up thanks to the highest bidder,” he added.
Aune is heavily into social networking as a way to market his business. “I keep my messages simple on Facebook and my customers know that I am a regular guy,” he said. “”They can relate to me.”
He likes to post pictures of his work and his business and to always keep it professional. “Don't get into social issues or personal opinions,” he said. “It's important to let people know who you are and that you are available to help. I've heard that potential clients are 71% more likely to make purchases based on social media referrals.”
IF – and that's a big IF HVAC contractors (and other businesses) choose to switch suppliers it would likely be because they wanted better service. At least that's the opinion of 123 people who responded to a recent online Linkedin.com poll which asked the question: “What would it take for you to switch your loyalty from a long-time vendor partner to a new vendor?”
The choices of answers included:
Some of the respondents who answered “other” left the door open for changing vendors but only under certain circumstances. Their comments included:
Other respondents who said they would not change at all included these comments:
Business as usual? It seems that way – as long as there is good service. If you like this poll, please stay tuned for more and come back to visit my blogs at www.semiacca.org.
Hey contractors (and all other business owners) – would you like to know why people call you for service, repairs, or replacements? Well, 188 people recently told me why they call and I'd like to share that information with you.
The people were responding to an online poll I conducted on Linked.com from early October 2012 to early November 2012 (30 days). I asked the question: “Why call a service contractor (i.e. heating & cooling, plumbing, electrical) for the first time when you needed service?”
Here were the choices for answers:
The responses were not even close. The most popular answer – overwhelmingly – was “word-of-mouth recommendation” with 139 replies or 74% of the total. The next closest was name recognition with 27 total votes or 14%. Advertisements had 8%, price 5%, and local news media story 2%.
It is obvious that people trust other people's opinions and recommendations when it comes to service and that pricing and advertising fall woefully short in reasons for choosing a service contractor. Respondents to the poll also left some interesting comments. Some of the better are listed below in condensed and edited versions.
Good stuff huh? In my humble opinion, I think a combination of word-of-mouth and Internet presence (high on Google searches) are a winning combination. How about you, what do you think?
As SEMIACCA Chapter Executive I am always looking for ways to help our members improve their business model. And that often means surveying their customers and peers. Keep checking back at www.semiacca.org for more useful information for YOUR business.
Over the years I have written about and given seminars on the topic of FREE advertising for your business. FREE is a good thing, wouldn't you think? The excerpt below is something I picked up on the PR Newswire the week of September 11th.
“Louise Gordon, vice president of operations at American Mechanical, Inc., a heating, ventilation and air conditioning (HVAC), plumbing and electrical contractor, will appear as a guest on a local morning TV talk show on Tuesday, Sept. 11, 2012. Gordon will offer tips and advice for local consumers on heating systems in the home for the upcoming autumn and winter months.
Since most heating systems have been turned off for several months, they need to have the air filters cleaned or replaced and tested to make sure that they have not incurred any damage over the spring and summer months.
"This is the time to start preparing for cool days and brisk nights," said Gordon. "Consumers need to have their furnaces and heat pump systems checked out to make sure that they are working properly before the cold temperatures arrive."
Gordon will also explain different ways to make the home more energy efficient and what options are available in home heating for Hampton Roads HVAC systems.
About American Mechanical, Inc.: American Mechanical ( http://www.americanmechanicalva.com) has been serving Southeastern Virginia and the Hampton Roads community for more than 20 years. As a heating and air conditioning, plumbing and electrical contractor, American Mechanical provides HVAC repairs, maintenance and installation for both residential and commercial customers. It is a member of the Hampton Roads Chamber of Commerce, Better Business Bureau, Air Conditioning Contractors of America (ACCA), Plumbing-Heating-Cooling Contractors Association (PHCC) and Qualified Gas Contractors of Virginia. American Mechanical has received the Angie's List Super Service Award for the past two years. It is a Fox 43 TV First Choice contractor, a Circle of Experts affiliate member of the Hampton Roads Realtors® Association.”
Now imagine the local news media going to your competitor and asking them to discuss heating and cooling issues. You could be the first contractor they call if you only had your name out there. Be proactive, e-mail, text, fax, write, or call your local news media and ask to be their “expert” on HVAC issues – especially the upcoming change in energy efficiency standards in 2013.
Need more ideas? Stay tuned.
John R. Hall - September 16, 2012