Follow The ‘Yellow Brick Road To Profits’

By John R. Hall

TAMPA, Fla. — At its March meeting for HVACR contractor members, AirTime 500 leaders introduced an array of new services designed to lead them to “OZ” (the “Opportunity Zone”). Terry Nicholson, the organization’s president, said he would like all members to follow the “Yellow Brick Road to Profits.” Playing off the “Wizard of Oz” theme, he noted that profitability is something members have always had with them, but have not been able to realize. He said there are two important factors that contractors should be aware of: management and education.

Management, Education

“For the first time in history, time is more important than money,” Nicholson said. “People will pay more for something if they can get it on time.”

But if a technician does not receive the proper training, or the job isn’t done right, any time saved is a moot point.

“We are here to talk about how we can serve our customers in the best way, by providing the highest level of training of our employees,” said Nicholson.

It is important that service technicians be trained in many disciplines, he asserted, including making sales presentations to existing customers. He said this type of training is necessitated by a contractor’s budget, which may not include much money for marketing to former or prospective customers.

“Focus on what you can do,” he stated. “If you don’t have a lot of money, focus on your existing clients.”

Nicholson explained how members could generate an average of $280,000 in replacement revenues per technician without using any advertising. He said there is a higher closing ratio among leads generated by technicians than among leads generated by marketing. “The technician can educate customers on all factors that help them make the right decision on comfort and safety,” said Nicholson. “The tech is only doing what is in the client’s best interest.

“The No. 1 reason why technicians don’t get leads is because there is no company focus. Many technicians don’t understand what is in the customer’s best interest because they have never been taught.”

Marketing Flaws

In keeping with the “Opportunity Zone” theme, Nicholson also talked to members about the importance of marketing their service and replacement business. He focused on marketing errors that members should avoid.

Here is Nicholson’s list of 10 “fatal marketing flaws”:

1. Ignoring current clients and the existing database. “As an owner of the company, you should send that first-time customer a thank you note,” Nicholson said.

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2. Not being prepared and not educating the staff of the drop-dead date of the company’s advertising campaign.

3. Continuing to advertise when you can’t handle the business. “Does it make sense, if you are backlogged, to continue to advertise and take more phone calls?” he asked. “Simply delay the mailing until you can handle the business.”

4. Wasting money and looking incompetent. If you’ve already installed a new system in a home, don’t mail marketing pieces about replacement to that customer, Nicholson advised.

5. Ignoring technology. Many companies don’t have a Web site, and some of those that do fail to update the information or promote specials on the Web site.

6. Failing to collect clients’ e-mail addresses.

7. Not using coupons, such as a coupon from a Web site, which can only be downloaded after a visitor has filled in the contact information.

8. Not tracking numbers and reviewing statistical data.

9. Not taking advantage of quantity discounts for direct mail campaigns.

10. Not communicating effectively within the company (e.g., not dispatching to pagers or cell phones via the Internet.)

Success Story

John McCarthy Sr., owner of McCarthy — Heating & Air Conditioning, Omaha, Neb., is an AirTime 500 member and one of the winners in The News’ 2002 “Best Contractor to Work For” contest. McCarthy and his son, John Jr., told members the story of their company’s success, beginning with a promise to meet the needs of customers, to encourage and reward associates, and to help the community.

John Sr. talked about what he does to keep his employees happy and motivated, including company-sponsored training and rotating installation crews to encourage idea exchanges. The company also installed electric lifts — what McCarthy calls “back savers” —on the back of cube vans.

Pictures of installations are posted on the company bulletin board, and employees vote for “job of the month” and “job of the year.” The winners receive cash prizes.

Publication date: 04/07/2003

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John Hall is the Business Editor. E-mail him at johnhall@achrnews.com.