Buddy Smith has one word to describe taking over the family business in his mid-twenties: sobering. Since taking the leap in 2001 at Chesapeake, Virginia-based Russell’s Heating & Cooling, which opened in April 1977, the company has more than doubled its staff size, now employing 47 people. The company also recently relocated to a larger, more efficient space, which helped the company more than triple its revenue.
“It’s funny because when the responsibility was shared, I only took it half seriously.” Smith said. “Looking back, once it all fell on me, I realized this is serious business. It brought a whole different tone to my life; though, I’m still trying to learn — don’t put off tomorrow what you can do today.”
Smith’s business strategy is to beat out the competition by offering what they won’t or can’t. To do this, he utilizes a 365-day Buy Back Guarantee, which he believes is an immense trust builder for his crew and customers.
“Only a couple of my competitors are willing to say, ‘Hey, you have a system you just paid $15,000 for; if you’re not happy within the first year and we can’t make it right, we will pull it out and give you your money back,’” he said.
While he rarely has to honor such a warranty, it has occurred. And, when it does, Smith’s technicians “go out there with a smile and remove the faulty system as cleanly as possible.” In fact, Smith had the first case in probably three years the very morning he spoke with The NEWS.
“We want to make sure our customers are 100 percent happy with us while doing reverse business with them,” he said. “It shows character.”
Facing Your Fears
Russell’s made the move into a new 7,200-square-foot building less than a year ago. Previously, the company occupied about 5,500 square feet spanning three condo suites, which, according to Smith, was very poorly laid out.
“We went all out with the advertising-agency feel. We now have bean bags and bright colors — it’s just got a really cool layout. There are televisions everywhere. It’s functionally set up well for us.
“Interestingly, when we moved, I never had to have a speech with anyone about being organized or clean, it just happened. We’ve been here for eight or nine months now and everyone just took on a whole different perspective. It’s all the same people, doing mostly the same processes, but moving into a new environment was a game changer for us.”
The move has helped the company ramp up its service offerings.
“We’re doing the same things we’ve always done, but on a larger scale,” Smith said. “The only thing I would have done differently is I would have gotten out of our way-too-small, way-outdated facilities much sooner than I did — like a decade sooner. It was all based in fear. Fear that I couldn’t rent the old spaces, fear of the cost of doing it — you name it, I was fearful.”
Smith said the key to keeping his employees engaged and motivated is to use measurement and tracking tools. “At no point will we ever be 100 percent paperless, but we do everything from the sales process to service calls to installation to photos of jobs to the forms that go along with the job, all of it is paperless. I don’t know where the magic is there, but there’s something about the technology that people love — both our customers and employees. It allows us to get information so much faster. We can know where we are at very quickly and then give that feedback to our staff and customers.”
And the perks certainly help. In addition to the typical employee benefits such as vacation time or 401K plans, Smith is sending his accounting department to Busch Gardens for the day. Another department will get a half day at the spa, and will be paid to be there. Smith said he’ll often set a daily goal of some sort, and if his employees hit it, the entire office gets Starbucks.
“It’s the work environment, you know — the energetic, hip, cool, and modern kind of a workplace that you won’t find in nearly any kind of contracting business, much less an HVAC business. Some HVAC businesses still look like Sanford and Son — they’re dirty and messy. I don’t like that.”
Both Smith and his general manager, Marc Sawyer, walk around Russell’s wearing specialty orange and pink bracelets that read, “Book the Damn Call.”
“It was something our previous service manager said to a customer service representative (CSR) trying to book a call one day,” Sawyer said. “Every minute she was putting this person on hold. This happened five or six times, and while she kept asking what she had to do, he just said, ‘book the damn call.’”
Then, while out to dinner with a sales trainer one day, Smith and Sawyer told the story, one thing led to another, and the pair ended up ordering about 100 bracelets online that night before leaving the restaurant.
“The CSRs have them in work stations, and the service techs have them; they’ve been a big hit,” Sawyer said. “It’s been pretty positive. It’s something quirky and funny, but it also keeps us focused on our goal — booking the call. Even though it’s maybe not the most appropriate phrase, it’s a funny story that everyone can relate to. We’ve all been in those situations where we don’t know what to do.”
According to Andrew Tucker, customer service manager at Russell’s, the company stands alone when it comes to recognizing and rewarding hard work and commitment. “I’ve seen an owner who is willing to get right next to you and work and office staff who, on a regular basis, will go the extra mile for any person here,” he said.
“Being founded in 1977 gives us deep roots in the local community, and the young leadership of Buddy and Marc allows us to easily move forward into new ways of running a successful business,” Tucker said. “I am not sure how to describe the atmosphere, but I would say it is one that is always willing to change for the better while holding integrity to our customers.”
A Promising Future
Russell’s is on track to earn $7.5 million in revenue this year.
“I can’t say that I have this perfect vision, though our immediate goal is to be the largest service department-driven company in Hampton Roads, and I don’t think we’re more than a couple of years away from that right now,” Smith said. “Our revenue has grown 25-30 percent a year in each of the past three years. I don’t know if I want to continue growing that much in the next five years, but I want some continual growth to create opportunities for the people who work here. Each department has a lot of employees and typically just one manager, and that’s the one and only spot where people can move up. If we’re doing $14-$15 million a year of retail-oriented work, that opens a whole new level of (middle) management opportunities. We have great people and I always want there to be new opportunities for them.”
Sawyer said the real challenge will be to balance company growth, which, he acknowledged, is a good problem to have.
“I think the biggest struggle as we grow is to try to maintain the connection with the field and office,” Sawyer said. “It’s probably one of our biggest challenges, and it never ends. So, we will focus on that stuff — on bringing people into meetings to keep that connected mom and pop, small-company feel.”
Publication date: 9/8/2014