Design Makeover: A Work In Progress

October 26, 2005
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Terry Boone (left) makes his sales presentation to an attentive Brian Schmidt.
When The NEWS visited Virginia contractor Terry Boone in late 2004 and early 2005, the goal of the visits was to initiate and monitor a makeover process for the HVAC contractor. Boone was struggling to get a foothold in the market in his new location, while maintaining his customer base in an old location.

Boone, who began his business in the small town of St. Paul, Va., and then opened up a new shop in nearby Abingdon, named Perfect Air of Abingdon, has been plagued with the problems that many contractors struggle with: working "on" the business instead of "in" the business, having a solid business plan, and having key people in place to support the business plan.

Boone had to make some hard choices, make personnel changes, and introduce a new selling concept to the people in the community: indoor air quality (IAQ). He often takes one step forward and then two steps backward, knowing that he needs to maintain a positive cash flow to achieve his plan, but struggling to follow the plan because he is running service calls in the St. Paul community just to pay the bills.

The Abingdon market holds a lot of potential. It is a growing community that has several medical facilities and professionals living in the area. Large subdivisions with million dollar homes are sprouting up nearby, providing a lot of potential system installations with upgraded equipment and add-ons. New homeowners are taking another look at healthy indoor environments, and Boone figures to market his IAQ products and services to the health-conscious homeowners.

But everything goes back to the two basic needs for running any business: capital and people. He still needs help in both areas, and The NEWS will continue to monitor his progress.

In the meantime, Boone is continuing to move forward with his IAQ marketing. Part of the process involves showing homeowners the IAQ of their homes and then suggesting solutions to usher in cleaner environments.

As an integral piece of this marketing, Boone has selected the indoor air monitors from AirAdvice Inc. of Portland, Ore. (www.airadvice.com). The monitors are part of an overall analysis of indoor environments, showing occupants the levels of odors and chemicals, microscopic airborne particulates, carbon monoxide, carbon dioxide, relative humidity, and temperature.

AirAdvice’s Mike Youngs (left) talks strategy with HVAC contractor Terry Boone.

AirAdvice Coach Pays A Visit

The NEWS invited Michael Youngs, AirAdvice regional sales and training manager, to visit with Boone and provide some insights on how to make a better sales presentation and how to make the program more profitable for Perfect Air of Abingdon. Part of the visit included a sales presentation in the home of a prospective customer in the nearby town of Damascus.

Before making the presentation, Boone visited with Youngs to discuss some of his business concerns.

Since Boone is dependent on IAQ selling, he is concerned about mold issues. He does not want to set up an IAQ plan that may be impacted by the potential presence of mold in a home or the potential for mold growth in the home. He has an opportunity to purchase mold insurance through the Air Conditioning Contractors of America (ACCA), but he is worried that the upfront cost of $5,000 would stretch his budget a little too thin.

Youngs recommended that Boone partner with someone in the community who is into mold remediation. Boone could stick to the IAQ analysis side, while the mold remediator could recommend solutions if mold is present or there is potential for mold growth. The problem Boone has found is that there are no mold remediation businesses in the area. One remedy is for Boone to become a certified indoor environmentalist (CIE). Youngs said he'd help him get some information about it.

Youngs also suggested that Boone ask local doctors and allergists if they could refer patients to him. Boone could put informational sheets in the doctors' and allergists' offices as a way to market his IAQ business.

Other business concerns discussed between Boone and Youngs included:

  • Not leaving too much IAQ material behind on sales calls, i.e., information overload.

  • Purchase/lease options for AirAdvice monitor and payback period.

  • Building in cost of monitor with each proposal.

  • Pricing structure for straight IAQ call.

    Before going on the presentation to the homeowner, who had used the monitor and who would be seeing the results of the analysis during the presentation, Boone discussed the proposal with Youngs. Boone had a thorough presentation package, analyzing the customer's IAQ readings, and recommending ways to improve the IAQ with equipment packages, which varied according to 12-SEER, 14-SEER, and 16-SEER products.

    Boone did not share the proposed prices with Youngs as he wanted to arrive at a ballpark figure based on Boone's costs. When both men compared the prices their differences were substantial. Youngs showed Boone that he would barely break even on the job based on his proposals. Before heading out to the presentation, Boone raised his bid by over $2,000.

    Terry Boone (center) listens as homeowner Brian Schmidt discusses his IAQ concerns. AirAdvice’s Mike Youngs (left) listens in.

    The Presentation

    Brian Schmidt is an informed homeowner. The Damascus resident took a leave of absence from his job as an engineer to rebuild an old home into a dream home for himself, his wife, and daughter. He spent a lot of time studying the harmful effects of poor IAQ and relied on Boone's findings to support his need for a clean indoor environment controlled by the proper HVAC system.

    Schmidt had received proposals from six other contractors, including two that had recommended a geothermal system. Schmidt, whose background in soil testing and evaluation had him leaning toward geothermal, had all but ruled out the economic practicality of geothermal.

    Based on his findings, Boone recommended equipment packages to meet the IAQ requirements at the present time. He suggested that further monitoring would be necessary at another time of the year to measure the IAQ and determine if the installed system would require any tweaking.

    Schmidt liked that approach - he was into statistics and measurements. In fact, throughout the entire presentation Schmidt had his laptop connected to an IAQ informational Web site.

    Boone explained the errors and omissions policy during the presentation, which stated that if all conditions were correct as calculated and the system did not perform to the customer's satisfaction, the equipment would be replaced at no charge to the customer.

    Boone also discussed the monitor findings and noted that the high particulate count could be controlled by constant filtration and variable-speed motor operation. He showed Schmidt a detailed drawing of each room and the necessary cfms for each room, highlighted by the correct location of each air vent.

    Schmidt was very impressed, adding, "I have not seen such an impressive presentation from any other contractor. After seeing this, I'd even go to work for you."

    Schmidt acknowledged that the proposal was a little higher than the other bids, but he also noted that this system is something he needs for the next 20 years and would be very careful in making his decision.

    Although Boone did not close the sale that day, he made a very good impression. "I was looking for professionalism and look what I got," said Schmidt. The decision to buy would come later.

    For now, Youngs will continue to work with Boone on his IAQ presentations and pricing.

    Youngs noted, "I will be calling you to help you figure out proper pricing for continued growth and profitability. At that point, we can figure out an advertising budget as a percentage of sales. We can choose some direct mail to drive quality IAQ leads that will begin to enter you into the niche IAQ arena. The IAQ expert will take us 36 months to fully maximize.

    "Remember what is important - profitable sales! Not just sales, but sales that are profitable. Keep a close eye on labor as well as part overruns."

    Publication date: 10/31/2005

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