Five HVAC Contractor Essentials for Success

January 26, 2009
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While working with HVAC contractor clients, I have found five areas of consistent concern. Some of these areas of concern are handled well by some contractors, but even the true essentials of successfully dealing with these concerns are often misunderstood or glossed over.

Why? Because contractors are used to working on tangibles with their hands. Typically they do not have the inclination to work with abstracts.

Most of my clients have reached some level of success, but also recognize that something is missing or that they do not fully grasp some of the issues that impact these five concerns. Therefore the intent here will be to expound upon these “Five HVAC Contractor Essentials.”

In Part One, I will discuss the first two: hiring/retaining employees and employee training. In Part Two, I will talk about the other three essentials: recouping overhead, proper product positioning, and consistent lead generation.

HIRING AND RETAINING EMPLOYEES

One of the greatest challenges facing the HVAC contractor today is that of hiring, retaining, and increasing productivity of employees. We exist in an industry of great potential, an industry that provides daily self-satisfaction of a job well done and with “potentially” comparable financial rewards for the employee and the employer. I say potentially because HVAC contractors need to be aware of what their prices should really be in today’s market (more on this in part two).

Hiring new employees is a daunting challenge. If someone had the magic bullet, they would be wealthy beyond compare. Yet there are some companies who have long waiting lists of potential employees because of their reputation in the industry. There are many reasons that this is true, but paying top dollar and having better benefits are usually not the only reasons. These companies also provide an environment that nurtures the employee with ongoing training, an environment that allows them to reach their full potential, and an avenue for advancement.

Would you accept a job that requires you to work 10-12 hours a day, three to five months out of the year, and then face potential cutbacks in hours or even layoffs? Or a job that requires you to crawl under houses in the dark, dirty, and critter-ridden crawl spaces that exist? How about a job that offered increased income based only on increased hours and little future potential other than tenure? That is the way potential employees see it. Unless we, as an industry, change that perception, we are doomed to a lifetime of continued employee shortages.

Keep in mind that your employees are no different than you. Yes, they want a dependable and reasonable income, they want benefits of a comparable nature, and they want to have time to enjoy their life. But they need recognition, they need to know the steps to advancement, and they need to know these before they accept the position. How and what training do they need to rise to the next level of a senior technician, service manager, or maybe installation manager? Are the time frames clearly spelled out? Are the projected incomes made known? What additional benefits might they expect?

Do you provide quarterly personnel reviews for new hires and bi-annual reviews or at least annual reviews for long-term employees that also demonstrate recognition of the employee? Do you allow them to rate themselves, indicate their areas of weakness, or indicate the areas of training they believe they need? Do you ask them where they would like to advance to within your company and guide them on how to do so?

We, as an industry, must overcome this persistent employee shortage and it starts with proper pricing to pay employees. It must also include recognition and a visible career path, which will require a paradigm shift on the contractors’ part. However, proper prices are justifiable to the consumer with better service, fewer callbacks, and a better caliber of service technician and quality installations.

Clearly, providing a viable career path (job description) for an employee’s future advancement is the No. 1 essential for HVAC contractors and it is essential to attracting valuable new employees and retaining existing employees. I have assisted contractors in identifying such issues and structured them so that they can be clearly presented to existing and potential employees.

Under ideal conditions, each salesperson works 54 hours.

TRAINED SALESPEOPLE

Many contractors put up with a salesperson simply because they do not have the time to make sales calls. Some larger contractors believe salespeople are born and do not require sales training. Almost all contractors recognize that salespeople do require product training and that suppliers or manufacturers should supply that training.

I agree that suppliers and manufacturers should and do provide product training. However, if you have positioned your product offering (discussed in part two), then your salespeople need to be trained in your philosophy. Additionally, they need to be trained in how to present the offers in the most concise manner possible to close the sale.

Many HVAC contractors say they cannot get or keep a good salesman. Maybe this is because they want a salesman who knows the refrigeration cycle and understands installation and start up procedures (this is a mechanic). Maybe they want a salesman who can run the installation (this is a project manager). Maybe this is because they expect the salesman to generate all his leads (this is a marketing and advertising manager).

Now do not get me wrong, a salesman does need to know the basics of these functions, but he should not be expected to perform them. Further, if you burden a salesperson with those other duties, as described above, he will simply not have enough time to earn the income he wants or bring the company the sales they want.

A good salesperson will close one out of three presentations weekly, monthly, and throughout the year. Do not fall prey to the salesperson who maintains he sells nine out of 10 or every presentation. Either he has the lowest price in town or he is costing his present employer money on every sale!

Many contractors believe a salesperson does not work that hard. After all, he only sells three or four jobs a week. Well, let us look at the actual time frames.

If a salesman is to complete a heat loss/heat gain calculation, overcome objections, present the value as being greater than the price, present the features and benefits of the products and your company, and write up the sale, he will need two to three hours in the home.

Assume that weekly he completes a total of 12 presentations. But let us look a little deeper. First, the salesperson must set the appointment (someone has to do it). If he has been given 12 leads and it takes him only 15 minutes each to call the customer and get the appointment set, he has expended three hours. He must drive to and from each appointment, say one hour each or 12 hours total. Even if he does not sell the job, he will spend three hours on each call or 36 hours.

Now even with the best of circumstances, he will spend at least another three hours turning in the paperwork for the sale. All total, the salesperson has worked 54 hours and that is under ideal conditions. So do you think, just maybe, he earned his keep?

Most contractors accept the need to pay salespeople on commission to drive more sales. But what about some incentive to hit company goals like cash flow? Why not provide a sales goal in line with the company cash flow requirements and pay a bonus if the salesperson attains them. Aside from achieving cash flow requirements, you will also make the salesperson believe he is a part of the company. What about a higher commission rate on self generated sales, after all, this reduces advertising costs.

Understanding these first two essentials is almost always at the top of the primary needs of my clients, even when they do not realize that to be the case. Once I have shared this information with my clients, they invariably see immediate results to their bottom line. The HVAC industry, as a whole, must provide employees a career path or continue to be doomed to the frustrations that exist in the present employee environment.

Training salespeople on products is essential to the sales effort. Training salespeople on your company product offerings and having them function as a part of the company, not just a commissioned salesperson is essential to the long-range success of the company.

So, as HVAC contractors, let us start with some self-examination as to how you view these essentials in your everyday efforts.

Publication date: 01/26/2009

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