PORTLAND, OR — Gordy and John Spezza have a mini-museum of sorts in their office at AAA Heating & Cooling, Inc., Portland. The focal point of the collection are mementos from the defunct Holland Furnace Co., for whom their father began working in 1937.
Both men started out by “sweeping the floors” and going door-to-door selling duct-cleaning services. Their roots have run deep in the local community.
In another part of town, contractor David Brent of The Heating Specialist is busy planning his next design-build project and his “Mr. Goodwrench” image, as he tells it. Brent represents the many hvacr contractors whose business practice includes maintaining a good image with clean trucks and uniforms.
Brent also is a believer in charging a fair price for his work and not letting dollar signs get in the way of doing business.
Both companies have been fixtures in the Portland market for several years and hope to continue a pace of steady growth as the Rose City continues its economic growth into 2000 and beyond. In this last installment of The News’ visit with Portland contractors, we’ll look at these two independent contractors and gain some insight into their business savvy.
AAA Heating & Cooling, Inc.Back in the early days of door-to-door selling, Gordy Spezza referred to his “sales crew” as the “eight guys in a station wagon” marketing campaign. The company still uses a similar program, only now imprinted door hangers replace tireless salespeople.
AAA spends a lot of time in Portland neighborhoods, and why not? The company has a residential base of 15,000 to 20,000 customers. That doesn’t leave a lot of room for commercial work, but surprisingly, it bills about 25% of its work to commercial customers.
“We do very little new construction,” said Spezza. “It keeps our competition busy. Most of our work is in service and replacement.”
AAA keeps approximately 20 trucks on the road with 18 service techs ready to go. Spezza would like to have more people to handle the service load, but he is a realist and knows the rigors of the business don’t appeal to all people. “This is a hard business to keep people fired up about. We need a motivated workforce and we need to get people excited.”
Spezza added that one key to keeping and retaining a motivated workforce is to ensure they all have proper training, including the office staff.
“I’m not sure our industry does a first-rate job of turning out well-trained people,” he said. “It isn’t always a matter of salary either, it is motivation. A lot of new faces often stimulate other people.”
As for other industry trends such as consolidation and utility competition, Spezza doesn’t see much impact. “Consolidators and utilities might be up here some day servicing our customers, but these movements really haven’t changed much up here. Besides, we try not to go out and butt heads with our competitors over price.”
Spezza prefers to establish long-term relationships and build on them, rather than fretting about how he will compete.
“The name of the game is to hang on to customers,” he explained. “When it is time to replace a furnace” after giving customers service work, “we will be there to do the work.”
AAA has its own website, which helps spread the name to a new generation of web users and homeowners who have little time to shop around town for the best prices. The company’s homepage is at http://aaaheatingandcooling.uswestdex.com.
The bottom line for Spezza still depends on word-of-mouth advertising and keeping up with the latest industry trends. He said that the commercial duct cleaning his company does often leads to more service work, especially since indoor air quality (IAQ) is still a hot topic.
“Environmental issues and IAQ work are relatively an untapped market,” he said. “And people are becoming more aware of it. You can’t separate the mechanical aspects to the air we breath. You can’t walk away after just installing the equipment.”
The Heating SpecialistDavid Brent likes to design things. He started working in the mechanical engineering-design field in 1975, and eventually formed his own business in 1981. But his love for designing projects still burns strong.
“I’d rather design a project and sell it rather than carry the burden of managing a company,” he said. “Besides, I’d rather work with employees as a coworker rather than as a superior.”
Brent added that his market has shifted dramatically from 100% residential work to a mix of 70% commercial and 30% residential. He cites a strong commercial market and a seasonal, weather-dependant residential market as part of the reason for the shift.
He also likes the fact that his employees can move about from one market to the other when needed. “You have to be broad-based and your employees should be trained to cross between residential and commercial work.”
Fortunately for Brent, his company (whose website is at http://heatingspecialist.uswestdex.com) has been able to stay busy all year, which puts an added demand on keeping up staff levels and adding new help.
Looking for new help often has its drawbacks.
“We learned a long time ago that you are not going to hire a lot of good people off the street,” he said. “We look for people with high character, not necessarily technical skills. Luckily we have workers who put the word out through their own channels when we are looking for new help.”
Brent said that training helps recruit people and leads to a trusting work environment. “We believe in a lot of training. It is important to constantly rework skills which enable us [managers] to comfortably turn our backs on employees and cut them loose.
“I’d rather find them young, without a big ego, and teach them the business.”
One of Brent’s keys to success is maintaining a high quality of workmanship, regardless of the project cost. He isn’t worried about competitors low-balling him as long as his people maintain high standards.
“We are not a price-based service,” he said. “We are quality driven. I have never run a price leader ad in the newspaper. We talk about price real early and don’t hit our customers with it in the end.
“We deliver a sophisticated product that low-priced guys can’t compete with.”
Brent added that he is motivated by the presence of consolidated businesses in the industry and is happy to be considered as a “target” for consolidators.
“We want to make sure we have a good business because we are a middle-sized company that is targeted by consolidators,” he said. “We have been contacted often by them.
“We have to be good enough to be reckoned with by anybody.”
Brent also has a long-range business plan in mind and he seems to be right on course.
“We believe in steady, 15% growth each year,” he said. “We are working on a $10 million plan and are about a third of the way there. I’d like to be there in seven or eight years.”
With a steady growth rate, an educated workforce, and clean image, The Heating Specialist is going places in Portland — and Brent is doing it “his way.”
“We are not brand loyal, we are customer loyal. If our customers trust us, they let us make the brand decisions which are in their best interests. That is why we generally don’t use manufacturers’ co-op advertising funds.”
Sidebar: One contractor’s keys to successDavid Brent has some advice for getting ahead in the hvacr business world. With an annual growth rate of 15% at The Heating Specialist, he certainly speaks from experience.
- “You have to have a strong stomach. You need to have a personality to withstand pressure. I have eight children and that alone is a huge motivation for me to succeed.”
- “A strong sales crew, with the talent to bid and close a sale, can make up for a lot of sins.”
- “Contractors need to become more technically astute. It used to be where all you had to do was know how to hang a thermostat. Maybe that’s why too many second-generation companies fail.”
— John R. Hall