Those Dreaded Callbacks

Editor’s Note: This is the first installment of a two-part series on callbacks. This article explores the reasons behind return service calls. Next week, industry experts will share their solutions for reducing callback rates.

The message comes in from the receptionist: “Mrs. Jones wants someone to come back out and check on the new furnace we installed yesterday. She says the house is still too cold and there is a funny noise coning from the furnace.”

No HVACR contractor wants callbacks. They lose money on return trips to customers, and if the customer is not satisfied — or just plain ornery — contractors may lose out on word-of-mouth referrals. That’s why it is important to keep the callback percentages to a minimum.

The News asked its Web site visitors about callbacks in a recent informal survey. Participants reported their callback percentages, listed the typical reasons behind callbacks, and detailed the measures they have taken to reduce service errors.

Survey Results

Respondents to The News’ online poll listed callback rates of between one and 50 percent. Most participants listed callback rates of between four and six percent.

When it came to the reasons for callbacks, one survey respondent said it wasn’t defective equipment or poor installations that caused problems — it was gremlins.

Others were more forthcoming. Several people identified the root of the problem as a lack of “thoroughness.” One respondent to the survey said, “In a rush to keep billing hours down and in order to make other calls, we don’t spend enough time on a complete diagnosis.” Several other participants in the survey agreed that “misdiagnosis” is the main reason for callbacks.

Patrick T. Clark of Anchorage, Alaska, put it simply: “Techs do not follow proper procedures and make mistakes.”

Bruce Kintz from Sarasota, Fla., reported a callback percentage of 1.5 percent, but he lamented that it was still not good enough. He noted that problems occur when employees “don’t take the time to look at the whole system.”

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“Most of our callbacks are from technicians who do not perform all the necessary tests and checks associated with the service,” said Jeff Krawic of East Hartford, Conn., a distributor who subcontracts startups and service agreements to local contractors. “Simple things like not checking the fuel oil pressures or manifold gas pressures, not adjusting the linkages as accurate as they are capable, etc. Also, some of the techs are just plain not educated enough.”

A full 50 percent of respondents pointed to defective products as the main reason for callbacks. The other responses included poor installations and problems with customers.

Drew Cameron, founder of Kennett Square, Pa.-based Supernova Selling Systems, listed several typical causes for callbacks. “Callbacks happen for a variety of reasons and could be avoided or minimized if the following items were addressed,” he said. He asserts that callbacks are most often the result of these factors:

Poor initial training and inadequate ongoing training;

Lack of quality control systems, procedures, checklists, spot inspections, and customer follow-up;

Poor allocation of resources (i.e., not sending the most qualified person to a job based on equipment and nature of the call);

Inadequate or nonexistent job descriptions, standard operating procedures, installation procedures, service procedures, etc.;

Poor communication, documentation, and follow-up on callbacks; and

Lack of leadership.

Accounting For Callbacks

Ruth King, CEO and Channel Manager for HVACChannel.tv, Norcross, Ga., said that an average of five percent is “way too high!” She asserts that callback rates should be under two percent. “If the service department has five percent callbacks by itself, I’d fire the techs! They should have one callback for every 100 calls they go on.”

She added that the service department generally handles the callbacks and warranty calls. “So, when a contractor bids a new construction job, he puts in two percent of job cost for warranty or $X per ton if residential. Then this goes into a warranty reserve. When the service department does the warranty call or callback, it charges the warranty reserve for it. That’s normally how it’s done.”

The cost of a callback can vary. “It depends on the amount of time, and what parts, etc., are used,” King said. “And many times what first appears to be a callback, isn’t.”

Denny Mann, service manager for Marina Mechanical, San Leandro, Calif., noted that it is essential to determine the reasons behind return calls. “We do track callbacks, lost time, policy adjustments, and warranty. Each category is itemized on our profit and loss statement by dollars and percentage of sales.

“The service manager reviews any service tags with nonbillable labor. The service manager talks with the technician as to why the callback happened and what can be done to prevent it from happening in the future.”

Next week: Contractors explore ways to reduce callback rates.

Publication date: 04/14/2003

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