Remember the middle of March? The lockdowns had just been announced. Fear was everywhere. In the days and weeks that followed, multiple manufacturers made plans for a 20% reduction in sales as the best case and a 40% decline as the worst case. There was one lone voice countering the industry malaise, and that was mine. Nine months later, it seems I was right. Industry shipments are now beating 2019.
On Friday the 13th of March (great day, huh?), we returned from our Spring International Roundtable in San Diego to be greeted by nationwide lockdowns. I was aghast at what I was reading from contractors on social media. Many were all but giving up, buying into the pessimism. Manufacturers were taking a matter-of-fact approach to managing an inevitable decline. At best, most were practicing crisis management.
At Service Roundtable, we were practicing crisis leadership. This is a critical difference. We were not trying to manage a decline. We were leading through the fear. We were trying to give people hope. That night, I began advising members of the Service Roundtable and Service Nation Alliance. I wrote, “While the entire world seems to be panicking, I would like to urge you to be calm. It is okay to feel a little frightened, but it is not okay to reveal it. You are leaders of your teams, and your teams look to you for reassurance. So, take a deep breath and think through the situation.”
I further advised that the current situation made marketing more incumbent — but that this marketing must be done with the right tone.
“People are scared, emotions are running high, and some may lash out if they perceive you are being opportunistic,” I said. “Be service-oriented. Approach your marketing with a servant's heart. Be informative.”
Informative meant telling people you were still open for business, informing customers about the steps you were taking to protect them, preparing your team to enter people's homes safely, offering IAQ products at pre-breakout pricing, and so on. I said contractors needed to think about how to handle emergency repairs in quarantined homes.
I also urged contractors to share their ideas and experiences.
“The best minds in the industry are in the Service Roundtable,” I said. “If we work together, we will emerge from the present insanity in far better shape than if we all attempt to go it alone."
At the same time, I pushed our team and our strategic partners to step up. Everyone did. Our members rallied. They got creative, innovated, and shared their ideas and results.
Birmingham contractor Tyler Kines thought through the communication requirements he would need for his team and his customers. When Monday rolled around, he had a reasoned strategy that he has already shared with Service Roundtable members around the world. It was replicated globally.
Joe Strittmatter from Denton, Texas, pioneered ways to protect his team and reassure customers with PPE and UV lights. He went over the top and succeeded.
Corey Hickman in Minneapolis shifted his marketing budget to match gift cards bought from local restaurants and hair salons, generating enormous goodwill and word-of-mouth. Kevin Frump from northern Indiana developed no-contact service and maintenance. Lou Hobaica in Phoenix did the same with sales calls.
Within a week, we organized the first virtual summit with Kines, Hickman, and others. Our message was unrelenting and positive, without being Pollyanna. Meanwhile, I went on every industry platform I could find to counter the negative narrative. I recorded the infamous video where I showed how historical AHRI shipment data suggested that this would be a great year and, even with the pandemic, we would beat 2019. I noted how individual contractors could grow, even if the industry as a whole did not, citing our experience through the 2008 recession.
It was a lonely position. The trade press covered me because what I was saying was so counter-intuitive. At the manufacturing level, few believed me — they were consuming too much panic porn. Fortunately, many contractors listened. By the end of August, AHRI reported that shipments of heat pumps and air conditioners were pacing ahead of 2019. It appeared we made the right call. Here is what some of the contractors who listened now have to say about this past year.
In Phoenix, Dalen Blumentritt from Reliance Heating and Air Conditioning kept his team positive and was able to keep things moving forward. “We are up over last year by 27%,” he said. Net profit, meanwhile, had tripled.
In Gelph, a Toronto suburb, Asif Bakhsh of AIDO Climate Solutions said, “Your advice was on point. We immediately implemented our COVID response and publicized it. We started focusing on IAQ in our marketing. We started offering financing offers with deferred payments and, most importantly, we started aggressively increasing stock of equipment and supplies, to help mitigate rolling shortages.” The result? “We're up 51% in revenue over last year so far, and over 160% more profitable.”
Sunny Service’s Ben Stark said his company has experienced a “great year, way up over 2019,” with installations over a 40% increase. “I feel our closing ratio skyrocketed because we got our sales staff in front of all decision-makers at same time,” he said. “It proved a point I’d been trying to make with my lead-setters for years.”
From Baxter, Iowa, Bryan DeJong of Baxter Comfort Solutions reported, “I am stocking equipment in our warehouse because I am taking seriously shortages in the supply line we are seeing. I may not have done this if you hadn’t warned us of this impending problem. Our sales to date are up 32% over last year.”
Even though we’re at the threshold of a vaccine, it seems the media is pumping out the panic porn again, noting an uptick in cases that corresponds with an uptick in testing — but not an uptick in mortality. Fail to mention the latter two statistics and it sounds bad, very bad.
Be wary who you choose to follow for advice. Do not buy into the “dark winter” narrative of doom. Trust your gut and trust your peers. Things are rarely as dire as the media portrays. Avoid the social media message boards of malaise. Join a positive-minded, forward-thinking contractor group instead of reading Facebook.
Your business’ success is always, always more controllable by you than by external events. You make a bigger difference in your business’ success than the President, the Senate, the economy, and even the weather. Believe that you will succeed, and you inevitably will. It is a decision. It is your decision.
Why trust me? Look, I called 2020 right and stood fast against the tide of despair. Yes, I looked at the data, but beyond that, I know the heart of contractors. You are entrepreneurs. You are risk takers. You are optimists. All you need is a little faith in yourselves and you will blow out 2021. Trust me. I know what I’m talking about. Seize that faith. Next year will be a great year. Next year is your year. Make it everything it can be.