A Birdseye View Of Rural HVACR Contracting
Now compare that to a more familiar county, such as New York County, which is 22.96 square miles. There are 66,940 people per square mile there.
What’s the point of this comparison? It takes a lot longer to sell and service customers in Hardin County than it does in New York County. Fewer people are available for sales and service calls, and they are farther apart. This also means there are fewer people to see newspaper ads and read direct mail pieces.
So how does a Hardin County HVACR contractor find enough work to keep busy and budget time to crisscross the county for sales and service calls? That’s just what The News wanted to find out during a recent visit to Aire Serv/JBS Heating & Cooling Inc.
AIRE SERV/JBS HEATING & A/CWhen owner John Gerlach began JBS along with partners Steve Deidrick and Byron Montgomery in 1981, he had very little knowledge of the HVACR trade. “I taught myself everything I needed to know,” he said.
JBS went along over the next 20 years, competing with the three or four other HVACR contractors in Hardin County. Gerlach opened a small branch office in Findlay, where Deidrick usually works, because “customers like to see your presence in the community,” Gerlach said. (Montgomery left the company in 1998.)
The bulk of their business is in residential service and replacement. In addition, the company sells and services light commercial accounts. Gerlach will also handle installations for six to eight custom spec homes each year, some carrying a $500,000 to $800,000 price tag.
The company’s primary equipment line is Trane, and it is part of the Trane Preferred Dealer network. He also sells Amana and Gibson equipment. He services all brands. Gerlach likes giving his customers equipment with differing price points, but not because he needs a lot of brand names. “We are selling ourselves, not the name-brand equipment,” he said.
Gerlach recently signed an agreement with Home Depot to become a preferred vendor in the Home Depot/Trane sales and service program.
Gerlach employs nine workers, including service techs, installers, sheet metal workers, and office assistants. He is the company’s only “full-time” salesperson.
“Everyone has the opportunity to sell and some have,” he said. “I eventually want to hire a full-time salesperson.”
That is just one of several reasons why Gerlach decided to join Aire Serv. He has big plans for the future.
SMALL TOWN, BIG PLANSGerlach wanted to go from running the business “by the seat of his pants” to a more organized and structured model. In short, he wanted to learn more about the business management side of the business. So earlier this year, he purchased the Aire Serv franchise for his area — and not just the immediate county.
“I have the exclusive Aire Serv ownership rights for five counties in this area,” he said. Gerlach would like to sell and service 8% to 10% of the population of each town in the five-county area, giving him enough work to increase business and expand the company. Those towns include nearby Findlay and Kenton. (The News spent one day with a service technician in Kenton. See story on page 1.)
Company revenues peaked at $875,000 in 2000, but revenue has slipped in the last two years, due to the weather and the slowdown in the economy. Gerlach said he expects to do $700,000 this year. “I’d like each of my service techs to generate a minimum of $100,000 in business,” he said.
Gerlach wants his company to become less dependent on the weather to dictate revenues, and that is why he is a big advocate of service contracts. If it is one thing he knows, it’s service contracts.
“We have about 2,000 contracts right now,” he said. “We began the Aire Serv Comfort Protection Plan (CPP) in July and have sold about 30-35 of them.”
Gerlach’s office assistant, Cheryl Sampson, automatically markets the CPPs to service customers when she sets up the service calls. Then it is up to the service techs to do a quality equipment check.
“We have to spend time with a customer in order to do a good job,” Gerlach stated. “Our average CPP visit is 1-1/2 hours.”
Gerlach, whose company charges $79.00 for a diagnostic and check, is also happy with Aire Serv’s standard pricing structure.
“I like the simplicity of flat-rate pricing,” he said. “The customers like it, too. But we do have the means to edit the pricing books if we have a special job. I will only do time-and-material pricing for a special projects.”
Gerlach also believes that his affiliation with Aire Serv enhances his ongoing philosophy of doing the job right the first time. “Other companies in our area don’t take the time to do the job right. We always go the extra step for 100% customer satisfaction,” he said.
Part of doing the job right is having a well-trained staff. Although Gerlach believes the best training happens in the field, he also knows that his people need to keep updated on the latest trends in HVACR and new equipment.
“Aire Serv is providing us with a lot of training materials,” he noted. “We also meet a couple of mornings each week to discuss some of our jobs to see what help we can offer to the people doing the work on the specific job. We cover required training updates, too.”
Gerlach cites another reason for joining Aire Serv. “I want to retire in eight years and I want to walk away with the business wrapped up in a nice, neat package.”
MILES AND MILESThe company’s service techs put on a lot of miles each year on the service vans. Gerlach said that crisscrossing Hardin County and surrounding counties puts a lot of mileage on the vehicles. “I believe that Jay Messenger puts on 35,000 miles a year,” Gerlach said of one of his service techs.
Messenger said he tries to make scheduled and unscheduled visits in certain areas.
“If I know I’m going to be in one community, I try to schedule my stops the same day and time,” he said. “I will even call a customer and see if I can do a [clean and inspect] while I’m in the area.”
Messenger doesn’t like having to make any extra trips back to the shop to retrieve a part he needs. Since there aren’t too many local suppliers, he keeps his truck well stocked with parts. “Driving all of the way back to the shop will take too much time,” he said.
Marketing and advertising are two areas which provide a challenge to doing business in a small community. But Gerlach said he usually depends on word of mouth. “Seventy-five percent of our new business comes from referrals,” he stated.
“We also do some newspaper and radio advertising using Trane and Amana co-op money. We advertise biweekly in the local newspapers while adjusting our radio information to cover seasonal promotions being offered.
“I am doing some television spots later this year and plan to track them. I don’t like Yellow Pages advertising, but we have to be in there, too.”
Consider Gerlach a small-town contractor with big-city ideas.
Publication date: 10/14/2002