HVAC Residential Market

Contractor Rebrands for Success

October 24, 2011
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When the economy crashed in 2008, many business owners nearing the end of their careers were probably relieved to retire and escape before it got worse. But Ray Grimm, 67, decided not to ride off into the sunset — instead, he chose to retain his leadership role and rebrand his Illinois business.

“I planned on cutting back at 65, but I didn’t do it because I saw what could happen to the company,” he said. “I had very fine, high-quality people who’d been with me for over 20 years and were depending on me and the company for their livelihood. I didn’t want the business to deteriorate. I want to leave a legacy here and have the company carry on being one of the leaders in the HVAC industry.”

Grimm originally incorporated THE Air Conditioning and Heating Co. (Carol Stream, Ill.) in 1985; in 2011 he rebranded it as Air.Water.Energy. (A.W.E.) and set out to pursue success in a changing residential market. “Our mission with this new business model and rebranding was to be known as the singular solution provider for all your air, water, and energy needs,” he explained. “We’re redefining the way we take care of our clients and redefining the way our clients take care of their homes.”

Changing the Brand

Grimm started out in HVAC as a salesman in 1980, but his company’s history includes roots that go back much further. After starting THE Air Conditioning and Heating Co. in 1985, four years later he purchased Keppner Heating and Piping, which was established in 1911. According to Grimm, his company had been successful for many years, but beginning in 2007 he noticed a change in the economy.

“Our clients were getting scared about spending money. They weren’t certain about whether they should buy a new piece of equipment,” he said. “We saw the turn in the market and the turn in the economy, and it’s made a big difference to a company like ours that is dependent on the homeowner.”

To face this shifting market, Grimm decided to refocus the business and diversify its service offering. He held many closed-door, no cell phones allowed meetings with his management team to develop the company’s new brand and mission.

One person who was instrumental in this effort was Alan Misale, general manager. Before Misale started working for Grimm in 2008, he had spent 14 years consulting for small businesses. Misale said he asked Grimm, “What business are we really in?” Ultimately, he said Grimm responded that the company is in the energy business. So now, Misale said, “What we are really looking to do is help people manage their interior environment through natural resources.”

Misale gives Grimm a lot of credit for being willing to venture beyond his comfort zone and develop a new company mission. In small businesses, Misale said, everything revolves around the owner. “If the owner can’t define what they want, then how does anybody accomplish it?” Fortunately for A.W.E., Misale said that Grimm has learned to manage and develop people instead of telling them what to do. “Very few business owners are able to make that transition,” he added.

Grimm has also focused on marketing efforts to let customers know that THE Air Conditioning and Heating Co. has not disappeared but has transformed into A.W.E. “We have sent out regular mailings to our clients and trained technicians on what to say to clients,” he said, adding that they kept the “bright school bus-yellow” paint job on their trucks while adding the new logo. The company currently employs around 50 people and has a fleet of 35 vehicles.

Focusing on Customers

At A.W.E., everyone is trained to give the customer world-class, front-line service. “It’s something that our service technicians, as well as our CSRs and every employee here, understand and work toward,” Grimm said. “There are thousands and thousands of clients that depend on us, and I depend on them, too. I never want to leave them with poor service.”

Jeff Kranicki has been working for Grimm for almost 20 years, so he can vouch for this. “Customer first has always been the philosophy at the company. It’s the No. 1 priority that’s been ingrained in us since day one,” he said. Kranicki is Grimm’s stepson, and he currently works as a comfort advisor. He added that he has seen the customer base become very price-conscious, so “on the phone or out on the street, you’ve got to bring your A-game and really bring value to the customer.”

Grimm enables his employees to get to that A-game level with training. He requires technicians to get at least one hour of training a week. “We want to be the best in what we do and want to know the technology that’s available to us,” he said. “We capitalize on our suppliers to keep us informed on what’s going to be new in our industry.”

Misale added that A.W.E. has had to retrain people in how to interact with customers. “There’s certainly a recognition that no one wants to be sold anything,” he said. “Our goal is to leave the consumer with enough information to make an informed decision. We knew we’d get our fair share if we did that [education aspect of the] job perfectly.”

Measuring Results

Last year, A.W.E. had a record year for sales, which management credits in part to the federal tax credits. While 2010 was extraordinarily successful, 2011 has presented new challenges. “We’re about a $7 million company presently, with a focus on being a $15 million company in the next three to five years. The goal is set, and the goal for profit is 6 percent,” Grimm said. “We haven’t set it too high — I think it’s certainly realistic. And the other goal is 100 percent client satisfaction, which I don’t think is unrealistic — I think it’s imperative.”

According to Misale, the new plumbing division, which falls under the “W” for water of A.W.E., “represents 15 percent of our revenue and didn’t exist a year ago.” He also noted that A.W.E. has entered a working relationship with wholesale retailer Costco and has kiosks in five of its stores. “It’s created more opportunity for us than we had last year, and is also around 15 percent of revenue,” he said.

Making It Personal

Grimm is still glad to be working in the HVAC industry and happy to continue to take care of customers. “The giant steps that have been taken to improve energy efficiency are what really excite me,” he said. “I just love that fact that we’ve got a 98 percent variable-speed furnace. I wish we could give them away free because I’m so excited we’re using 98 percent of the natural gas. That’s the fun part — seeing what’s happening and using our natural resources to the best of our ability, then giving that information to clients so they can make informed decisions.”

For him, A.W.E. is a personal business. He’s grateful that his wife is being patient and letting him cut back very slowly instead of jumping into retirement. “Something I’ve said in numerous of our closed-door meetings to my managers is ‘I care. It’s personal.’” Now he’s taken that message to his whole team and expanded it to: “We Care. It’s Personal.”

“I’ve been in the service industry my entire life and I know that the only way to be successful in any business is to give your clients better service than they’ve ever received before,” Grimm summed it up.

Publication date: 10/24/2011
 

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