ACHRNEWS

First Comfort Consultant Could Triple Profits

January 30, 2006
Profits are the lifeblood of every heating and air conditioning business. Profits come from sales. The greatest leap in sales and profitability happens when the business makes the transition from a service company selling equipment to a sales company selling comfort. This profitable journey can start the day the first comfort consultant is hired.

SALES ACCELERATE

The average HVAC contracting business does less than $1 million in annual sales. A properly trained comfort consultant can boost sales an additional $400,000 to $800,000 per year.

When an HVAC company first starts in business all sales are made by either the owner or service technicians. Most techs are in a hurry to get to the next job and the owner is usually anxious to put out the last fire. When a sale is made it's likely to be a lower-priced, easier-to-install solution. Minimum solution selling not only reduces sales and robs profits, but it also is responsible for most installation complaints and nonbillable warranty problems. When warranty problems go down, profits go up.

When a consultant starts doing the selling the focus usually shifts from rushing to the next problem to taking the time needed to best solve the problem. A smart consultant soon realizes the most important time of the day is spent discovering and addressing each buyer's individual wants, concerns, and desires. As the consultant's skills grow, the company's average replacement system selling price and profit margin could easily double.

PROFITS MULTIPLY

Net profit is the real goal of business. It increases, and business expands when sales increase faster than overhead. Overhead items like debt service, office equipment leases, and support team salaries must be paid whether sales are made or not. Most of the overhead the business already has in place is sufficient to support the new sales added by the new comfort consultant.

A reduction in overhead has a turbo-charging effect on net profits. If overhead goes down one dollar and other items remain constant, net profit skyrockets a dollar.

In companies where the owner tries to sell and manage simultaneously, overhead can be up to 10 percent higher than necessary. With a full-time comfort consultant on board, many owners finally have the time to properly manage all aspects of the business.

©ACT 2006 — FOR CONCEPT ONLY.

MANAGEMENT MAXIMIZES MONEY

Choosing the right sales process is the most important step in managing sales and maximizing profits. The sales process a business selects depends on the type of customers it prefers to do business with. A sales process based on good, better, best logic could work when selling to entry-level and mid-tier buyers.

An emotionally based selling process is required to consistently sell premium products to discerning buyers. Any process that uses manipulation or doesn't focus directly on HVAC should be avoided. The process must make sense to the consultant, be comfortable for the buyer, and be easily managed by the owner.

The training piece of the process should provide the new consultant with the skills, tools, and confidence to excel in today's highly competitive price-focused market. The greatest results usually come from a multiday program that incorporates role-playing, coaching, and evaluating to help the new consultant effectively deal with all types of real-world sales situations.

Every sale requires a lead. The lack of good leads is the No. 1 reason new consultants fail. Even an inexperienced consultant will convert 25 percent of sales conversations into some sort of sale by just showing up on time and talking with people about comfort.

Many of the best leads come from service technicians. Each tech knows their customers and the type of problems these customers have been experiencing. The weekly service meeting is an ideal time for the owner/manager to talk to technicians about discovering good sales leads, and then discussing the best way to immediately transfer hot leads to the new comfort consultant.

One of the owner/manager's most pressing jobs is to help the new consultant continuously improve his/her sales skills. This vital, yet often overlooked step is key to the new consultant's growth and effectiveness and the company's growth and profitability.

Improvement requires measurement. If there is no measurable change, there is no improvement. The consultant must document and the owner/manager must measure lead sources, selling prices, closing ratios, and profit margins.

These items, along with all notes taken the prior week at every sales call, provide the basic tools the owner/manager needs to be an effective sales coach. Time must be set aside at least once a week for the coach and consultant to celebrate wins, review goals, and discuss improvement opportunities.

If you're an HVAC business owner, where are you going to be five years from now? Will you be wearing many hats in order to make a living or managing a sales process that leads directly to financial independence?

The wonderful thing about being in business in America is that every firm, no matter how small, has the potential of producing unlimited profits. Hiring, training, and supporting your first comfort consultant can be the most important step you take to maximize profits and turn your dream of financial freedom into reality.

Steve Howard is the founder of The ACT Group. He can be reached at either 602-678-1055 or steve@nopressureselling.com.

Publication date: 01/30/2006