[Editor's note: Mondul is a business coach for International Service Leadership (ISL). ISL and Mondul are dedicated to sharing information to help HVACR contractors develop "a great life for themselves and their employees, while generating double-digit net profits." He shares his insights inThe Newsevery month.]

In my last article ("A Business Model For Contractors," Sept. 27), I alluded to a situation that occurs occasionally by setting up a hypothetical case. For illustration's sake, let's say that Frank is the lead technician with your company. He has been with the company for nine years. He is dependable, honorable, technically sound, and has the highest average ticket among the staff of five technicians.

In the course of the day, you are confident that Frank can diagnose and fix anything, and in doing so he almost never generates a lead for the sales staff. In fact, there is bitterness between Frank and the two salespeople, Jim and Barbara.

Frank thinks that the salespeople are "stealing from the customers" because he knows that he could probably fix most of the equipment that they are replacing.

The fact that both people on the sales staff make more money than Frank adds to the tension. In fact, things have degenerated so badly that Jim and Barbara don't even come into the office unless they know that Frank has been dispatched.

Obviously, Frank will never be adept at selling anything. In separate questions, though, are there ways Frank can serve the customer more fairly - and in the process earn more income?

Let's discuss the issue of proper disclosure to the customer on four issues during the service call:

1. Signs of wear and tear.

2. Pricing choices for the repair.

3. The role of a maintenance agreement.

4. The utility overpayment.

Please note the following: Everything we do must leave the customer, employees, and the company better off. If one of these three players isn't better off because a transaction is done, it is a bad transaction. Researchers have a special way of describing transactions in which all three participants benefit. At the end of the article, you can find out what they call it.

Signs Of Wear And Tear

It needs to be established that this is not a doom and gloom discussion for the customer. In fact, we can establish that the older system has served the customer well.

Showing the customer signs of wear on equipment that is more than 10 years old is not something that our industry has typically done in the past. We can get something to blow cold or hot air, but to lead a customer to think that an old system should be as good as new could be considered bordering on unethical.

The honorable technician should be very comfortable with the idea of this kind of disclosure. After all, how many times have your techs had to deal with a customer who felt cheated and said something like, "I just paid $400 for a repair last spring, and now you say I owe you what?" Companies that implement full disclosure tend not to hear that kind of thing anymore.

Therefore, service managers, when it comes to the area of communication, practice is more important than training. One option is to utilize role-playing while looking at old equipment near the dumpster. Practice communicating what is seen and what it means to the customer.

Providing Pricing Choices

Remember, we are in the business of building a large maintenance agreement base of customers. On every service call, our technicians need to be offering retail pricing, as well as discount pricing, and opportunities for the repair. We may choose to offer the agreement holder a discount if the customer chooses to invest in the agreement at the time of the repair.

Some have been amazed at how often the customer chooses to have a special relationship with our company, often just because the technician took a genuine interest in the customer's situation and executed his duties with excellence.

Maintenance Agreement

Your technician can stay in character as a technician (not morph into a plaid-coated salesperson) and still describe the value to a customer. Stick to the three or four most important issues that are delivered to an agreement holder. These benefits may include:

  • A 15-percent discount on all service calls while the agreement is in place.

  • No overtime charges.

  • Placement on a priority list for service calls.

  • Two tuneups per year, during which a tech invests an hour cleaning, lubricating, doing a series of diagnostics, and making necessary adjustments.

    Determine Utility Costs

    With the formulas provided by the utilities and the heating and cooling hours that the typical customer will use to heat and cool, the operating costs are remarkably predictable. And you may choose another method of illustrating future costs of older, inefficient equipment.

    Regardless of the method of disclosure, the customer will surprise us. When we provide information about the cost of operating older systems and compare it to the operating costs for systems that are typically installed today (and not necessarily the most efficient systems), customers appreciate the information.

    As long as our technician doesn't attempt to influence the customer's decision and remains neutral, the customer will choose to talk to a comfort advisor, as opposed to repairing the equipment, 25 percent to 40 percent of the time.

    With proper management methods, we have the opportunity to increase the technicians' income in a meaningful way with a healthy spiff program. And, in the process, we can make the tech role more fun and less stressful.

    With these methods, hundreds of companies have:

  • Made the customer better off.

  • Increased the income of the technician team.

  • Operated the company more profitably (often 10-percent net profit or better).

  • Actually build their business (build the maintenance agreement base).

    Researchers have a name for this phenomenon - when all three participants benefit from a transaction. They call it "good business." In the end, some things just aren't that difficult.

    Next month: We examine another hypothetical case. It involves comfort advisor Bob, who thinks of himself as being honest, caring, and having a low-pressure sales style. Meanwhile, Hank, the owner/service manager, has a good relationship with Bob, but is somewhat frustrated with Bob's sporadic sales results.

    Mondul is a business coach for ISL. He can be reached at dennis.mondul@islinc.tv.

    Publication date: 10/25/2004