Pointing The Way To A Healthier Bottom Line

December 12, 2001
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SAN DIEGO, CA — It was subtitled “From Ordinary to Extraordinary,” and the 227 attendees saw first-hand what the organization they belonged to has planned for 2002 at the recent 2001 Excellence Alliance Inc. (EAI) Leaders Meeting at the Hotel Del Coronado in San Diego.

Attendees listened to an inspirational speech by former Canadian Olympic athlete Vince Poscente and heard from EAI management on a variety of business topics. The meeting wrapped up with some “non-business” activities including deep-sea fishing and a trip to the world-famous San Diego Zoo.

OLYMPIC DREAMS

Former Olympic skier Poscente was very upfront in his first statement to a packed audience. “My story isn’t important — what is your story?” he asked. “What is your vision for four years from now?” he asked, referring to the Winter Olympics, held every four years.

Poscente shared his ideas for success, forged from his underdog quest for Olympic glory. His success formula is based on “the five Cs” — clarity, commitment, consistency, confidence, and control.

Poscente addressed clarity. “There are turning points in life,” said Poscente. “Something happens that points us in a direction.” In his case, his direction was clarified — he wanted to speed ski in the Olympics.

“Who in their right mind would want to speed ski in the Olympics,” he joked. “But you never know what you like to do until you have tried.”

When talking of commitment, Poscente said that a person must be committed to each step of the process.

He added that in business, as well as sports, it is important to “do what the competition is not willing to do, then facilitate what the competition hasn’t thought of.”

Poscente said that confidence, the fourth “C,” comes from managing stress, and the fifth “C” — control — includes conquering fear.

“How we become the solution is critical,” he added. “But remember not to focus on the end result. Focus on the journey instead.”

Among the many different discussions during EAI’s three-day business conference were the following topics: “Why Good Employees Leave and How to Prevent It,” “Sales and Marketing Management,” and brand name discussions from strategic partners Nordyne and Trane/American Standard.

Here are the highlights of these discussions.

WHY GOOD EMPLOYEES LEAVE

Al Roach of Callahan/Roach & Associates focused on employee retention. Roach’s message was simple: Focus on the “internal customer,” the employee. “We have to ask: What do we need to do to attract and keep employees?” Roach said.

He added that the current economic climate should not affect the way business owners recruit, hire, and retain workers — as long as the techniques are successful.

“Sure, we are in a recession right now,” Roach said. “But many of us have been in a recession before and survived it.

“At the time I started out in business, in 1991, the war in Kuwait started and the economy slumped. We didn’t have instructions on how to deal with a recession, so we learned by doing.”

Roach suggested that the labor market has changed from 10-15 years ago. “Young people seem to be less loyal today, so we need to sell them on the fact that our workplace is an attractive and challenging place,” he said.

“Our industry has suffered from low self-esteem. If we think of ourselves as professionals, we will be professional.”

Professionalism equates to high self-esteem, which Roach said is a level where people are most efficient. “Their attitude becomes one where they want to fix the customers, not just the equipment,” he said.

“Many of us don’t set goals with our people. They don’t have a clue of what to expect,” stated Roach. “That kills self-esteem and confidence.

“We have to do a better job of communicating with employees, to close the gap of misinformation and prevent rumors from non-information. Tell employees what they have to do.”

Roach believes that communication should be stressed at all levels. “People leave because they don’t feel they are involved in the job,” he said. “Employees tend to feel inadequate about what they do. That’s why they need immediate feedback and they need training, training, and more training.

“At some point in time, you need to tell your employees they are appreciated. Show them you care, or they might leave for a job that pays $0.25 an hour more.”

SALES AND MANAGEMENT

Drew Cameron of Supernova Selling Systems told EAI members that as business owners, they “are the catalyst for the business. You set the tone for the day, so check your excess baggage at the door and get to work.”

Cameron believes that management should develop a strong marketing program with one goal in mind — customer retention. According to Cameron, follow-up is key. “It is usually indifference [lack of follow-up] that drives customers away,” he said.

Cameron said that contractors don’t necessarily need more sales leads; they need better tracking. “You need to close 50-75% of your leads — anything over that and your prices are too low,” he said. “You have to recognize the most important question in the process: what happens next? What happens after a salesperson runs the lead and gives a quote?

“You need to know the final resolution.”

Cameron, who teaches marketing and sales courses, stressed two highlights of his marketing course.

“Eliminate your competition with competitive analysis and develop a plan where they are not, cannot, will not, and are unwilling to go. Then exploit weaknesses in the armor and ‘take’ — in order to capture market share and mind share,” he said.

“Without a marketing plan, you are doomed to experience peaks and valleys in your business. You are flying blind and leaving your company, your coworkers, and your family’s income at risk. You are susceptible to weather conditions driving your business. You expose your company to competitive attack and capturing of your customer base, and you are doing a disservice to your customers.”

Cameron said there is no problem with depending on weather for business, but that type of business should be the gravy. Contractors need to be active rather than reactive.

“You can’t wait for customers to show up at a competitor and then steal them,” he said. “And you can’t wait for the Yellow Pages ad to show up, either.”

NORDYNE

Jim Burnes and Dennis Kloster talked with EAI members about the Nordyne brand and how they can expect the best products and service in the hvacr business.

Burnes said his company has a basic philosophy. “Build a high-quality product at the lowest average cost, in the shortest possible production time, and to the customer’s specified demand.

“Our vision is to be the preferred heating and cooling manufacturer. And we plan to double our sales volume over the next four years.”

“We have the best warranty in the business,” added Burnes. “If a compressor or heat exchanger failure results in a complete changeout, we will pay for the new system and $250 toward labor costs.”

Burnes told contractors that by offering different warranty options such as eight-, six-, or five-year plans, they are selling themselves and their service. He quickly reminded his audience that Nordyne is interested in selling them, not the Nordyne name. “We want contractors to sell themselves first and the brand name second,” he said.

Kloster described the various product lines. He classified Gibson as lower-end or “price driven”; Philco and Kelvinator as medium or “new construction” lines; and Frigidaire and Tappan as higer-end or “premium” lines.

One EAI contractor, Bob Pomeroy of Beaudry Heating & Cooling, Flint, MI, said that Nordyne acts quickly to his concerns and added, “They have helped me blow up my balloon instead of asking me to help them blow up their own balloon.”

TRANE/AMERICAN STANDARD

Randy Scott had big news to share with EAI members about Trane. “We will transition our entire product line in the next 14 months and replace every one,” he said. The first new model, the XL_i, has just been introduced. The new model is easier to service, with 50% fewer screws than the one it replaced.

“We need products that we can install faster and service easier,” Scott said. “We’ve added interlocking panels and reduced the number of screws.”

In addition, the XL_i has a 10-year warranty on all internal functioning parts, and if the unit is included with a furnace or air handler, the entire system would be warranted for 10 years.

According to Scott, the new initiatives are part of Trane’s overall plan to “achieve premier customer service, drive operational excellence, and deliver business plan results. Our unitary strategy continues to focus on premium products, not lower prices.” Scott said a good example of Trane’s success is that despite a 7% drop in a/c equipment shipments industry-wide, his company is bucking the trend by gaining market share.

Trane is also rolling out its new “Comfortsite,” an e-business website where contractors can place equipment orders and complete the transaction in an average of nine minutes, compared to a conventional order taking 56 minutes.

Scott also talked about Trane’s Home Depot program. Under this program, Home Depot provides leads on Trane equipment to qualified contractors, who then follow up on the leads and sell, install, and service the equipment. The leads are only given to one qualified contractor in the service area.

“The potential for lead generation is enormous,” said Scott. “One Atlanta-area contractor did $2 million off of these leads.

“In-store displays are provided; dealers can use their own people in the store; customers can call into a call center on the spot to set up a sales call. Home Depot has a good advertising program, and can offer financing.”

Scott said that contractors who make the sale are paid within five business days by Home Depot. Any future service is between the homeowner and contractor, said Scott. Home Depot makes no money after the original sale. For its part, Home Depot makes 5 1/2% off of each sale.

“It’s a bolt-on profit center,” Scott added. “It doesn’t conflict with a contractor’s current business.”

Scott said that 143 Home Depot stores were participating in the program at the end of June 2001. Trane plans to increase the total to 333 stores by the end of 2001. A national rollout is planned for 2002.

Sidebar: EAI Honors Its Allies, Members

Excellence Alliance, Inc. (EAI) presented the EAI Founders Awards at its 2001 Annual Excellence Leaders Meeting in San Diego, CA. Awards were presented to:
  • Strategic Ally Award, Manufacturer — The Trane Company; Strategic Ally Award, Distributor — Watsco, Inc.;
  • Strategic Ally Award, Supplier — Equiguard;
  • Strategic Ally Award, Automotive — General Motors;
  • Donald C. Schmitt Mentor Award — Mike Callahan, Callahan/Roach;
  • Neil J. Quinn Partner Award — Nordyne, Dennis Kloster and Jim Burnes (O’Fallon, MO);
  • James P. Norris Visionary Award — Mitchell Cropp, Cropp-Metcalfe (Fairfax, VA);
  • Shining Star Award — Tim Gerhardt, All Points (Itasca, IL);
  • Industry Advancement Award — Bob Helbing, Air-Tro, Inc. (Monrovia, CA); and
  • EAI Member of the Year Award — Andy Rodenhiser, Rodenhiser Plumbing & Heating (Holliston, MA).


Sidebar: EAF Fundraiser Brings In $25,000 For Foundation

The Excellence Alliance Foundation (EAF) held its annual fundraiser, sponsored by Trane, aboard the Spirit of San Diego. The three-hour cruise around the harbor included dinner, gambling and prizes. The mock casino included craps, roulette, and blackjack tables.

Participants pledged donations and received chips to play with at the tables. At the end of the night they cashed in their chips for raffle tickets. These raffle tickets were then used to participate in a raffle.

The event raised $25,000. The money will go to EAF for scholarship distribution. The intent of EAF is to award as many scholarships as possible for the education of the future workforce in the contracting industry.

Publication date: 12/17/2001

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