Restoration Rewind Delta Development Group Monthly Newsletter
July 2017
A Grand California Opening Delta Disaster Services has officially landed in California. Our first office in the state celebrated their grand opening last week, June 28th with a great party. Delta Disaster Services of Northern Los Angeles is now opened in Altadena California. Owner Anthony Tatikian was joined by his staff; General Manager Eddy Khalil, Office Assistant Carol Parducho, Business Development Representative, Edwin Ghil and family and friends to celebrate the grand opening. Just when we thought we wouldn’t see anything new at a grand opening, we were surprised yet again. The group in Northern Los Angeles was fortunate and had two ribbon cutting ceremonies. The office in Altadena also sits on the border of the city of Pasadena, and both Chamber of Commerce groups were at the party to welcome Anthony and Delta Disaster Services to the community. We are very excited to watch this group move right in on the other restoration firms and take over this very competitive market. Anthony and Eddy have great connections in their area and they are already building a great team to help make Delta Disaster Services of Northern Los Angeles a success.
Company culture and what it means when running a service company By: Michael Mastous
We often hire people for our organization that have the necessary hard skill set. If they are in construction, do they truly understand construction? Can they build, can they estimate; that is often what we judge people by. For finance, do they understand QuickBooks? Do they understand accounting practices, GAAP practices? Can they effectively manage people? Can they manage cash flow, can they be trusted? For the most part, these are the hard skills that we look for when we try to bring on a new employee into our companies. For those of you that were at the Crawford Contractor Connection conference in St Louis, one of the keynote speakers touched on the type of people that you need to have in a service company. Surprisingly, he didn't talk about the hard or soft skills, he touched on the type of character that person should have. Are they a “good person�? Do they like people and work well with others? Are they generally a happy person? Are they the same person at work that they are outside of work? The truth is, you and your company can't perform at a high level of customer service satisfaction and not genuinely care about people. This hit a chord with me as well as a number of people that I was with. I brought the message back to my office in Denver and shared it with some of our staff. Recently, in our Denver office, a decision was made to let a key employee go for just this reason. Much of her skill-set hard and soft, was adequate for her position. But her demeanor, the way that she treated people and the way that she interacted with her staff, created a very negative and threatening environment. This was not acceptable in any situation but certainly not in a high-level customer service company like Delta Disaster Services of Denver. When this person was asked to leave the mood within her team changed overnight. People started to smile, people started to joke and laugh again and people are being more productive because of this. Lesson learned.
Welcome to DDG As you know, at DDG we are always looking for ways to improve and make ourselves better so that we can continue to support our network at a high level. This improvement is typically in the form of a new piece of equipment or software, but this time we have added a new team member to help us improve. We are pleased to have Alyssa Horta join the DDG team as the new Executive Administrative Assistant. Alyssa comes to us from Starbucks where she was a barista trainer. We are very excited to have her onboard and begin to introduce to all of you and Delta Disaster Services. We look forward to her becoming an integral member of our team. Welcome Alyssa!
Marketing Corner Embrace change and you will always be better for it! Really? If you’re like me, you like to stick with what works, right?...Wrong! As a marketer, our world is constantly changing; from the way our referral sources respond to our efforts, to how the internet influences everyone’s perception of what a restoration company does. Change is always happening and if you’re not changing with it you will be left behind. Below is a quick article on how to embrace the benefits of change. Love it or it will leave you in the dust. Enjoy! Jason.
5 Reasons Change Is Good for You By Amber Rose Monaco
We all know that change is hard. Change is hard because you brain is wired to do the same thing over and over, regardless if that activity is good or bad for you. We also know how challenging it can be to go through change, but the positive consequence is really awesome. I fully believe change is good for you. Even when it seems tough, you are learning and growing as a person. Change happens slowly, but it happens. Here are five reasons why change is good for you: You are pushed out of your comfort zone. Life in the comfort zone is easy. You simply follow a routine and you can predict the consequences. Outside of the comfort zone, your assumptions are challenged. Your opinions, mindset, and belief system are tested. You must find new ways to articulate who you are and what you believe. The idea of doing the same thing over and over without question is discouraged. Getting out into the world and doing something new and different is a fostered approach to life. You get to experience more. Change is good because you have the opportunity to embrace new experiences. New
perspectives are waiting for you at the doorstep. Opportunities are plentiful. When you look back on your life, all of the really amazing things are because of a new experience you had. All of those vacations you took and all of the people you have met have taught you more than you ever learned in school. These experiences now make up who you are today. You get to find out who you really are. When you are going through a transition, your mind expands in way that is hadn’t in the past. You find out about what you can handle and what you can’t. You learn about your limitations. You figure out what you are really made of. Learning about yourself, including what you cannot handle, helps you to figure out a better path to take in life. You are open to the possibility of learning that what you have been doing in the past isn’t suiting the future. Makes you more flexibility and adaptable. Without a doubt, change makes your more flexible and adaptable. You learn to embrace chaos in a way that seems foreign but acceptable and achievable. Then, you are armed with more confidence as you walk into the next uncomfortable situation. You begin to thrive in new situations because you have proven to yourself that you can, not only handle change, but FLOURISH. You have more fun. When you are open to change, you are open to saying YES to more. You are open to more experiences and opportunities. You have the opportunity to meet more people too. When you add all of these things together, you are going to have a more robust life and you’ll have a ton of fun figuring it all out along the way — there’s no doubt about it. HOW HAS CHANGE PROVED TO BE A GOOD THING IN YOUR LIFE?
Cash in the Door Based on April royalties, Delta Disaster Services of Southern Colorado yet again takes the lead for Cash in the Door with just shy of $500,000 for the month.
Contents Adjustment is Tedious, Hard Work Enservio’s director of training, Scott Petlewski, wrote an article Establishing Value on Contents Claims: 3 Bad Habits to Break, which demonstrates that proper contents adjustment is hard work. It can be time consuming, expensive from a labor standpoint, and fraught with error. Just to prove my point, without looking, what is the brand, place of purchase, time of purchase, cost of purchase, and degree of wear & tear of: •
The shoes on your feet
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The socks covering your feet.
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Your pants, skirt, or dress.
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Your shirt on your back.
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Your jewelry on you.
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The soap, shampoo and brush you used earlier this morning to groom yourself?
For me, I know my shoes are brown and they are nice. I have no idea if they are five or ten years old. I forget the last time, if ever, I had them resoled. Dark socks—nothing more. No clue of the price and which store. My pants are blue jeans and very nice. I think I bought them in the last couple of years and for more than $100, but how much, I do not remember. I think I had to have them altered, but not certain if I was charged for that or not. My shirt is purple and has a croc on it. Who knows when I purchased it but it looked good enough for travel today. I have a Rolex watch given as a gift maybe 14-20 years ago. It still looks great to me. I would have to ask my former wife how much it cost and where she bought it. No clue about soap, shampoo or even which brush I used except that they all have been used and the soap has been used more than the newer bottle of shampoo. How do you describe the wear and tear of a brush?
Some people may have better memories and can recall all this stuff. Think how difficult it would be if you had to repeat all this for a major fire loss with little remaining, much less going through rubble to decipher what is left. Still, insurance company adjusters have an obligation to promptly and fully investigate all the contents loss and in good faith come up with a dollar figure of the estimated loss which will fully pay the policyholder.
The article by Scott Petlewski makes several good points that claims managers should consider when making processes that ensure the insurance company’s customers are receiving good faith claims adjustments of the contents loss. He notes three mistakes that insurers make when investigating and evaluating the value of a contents loss: 1. Assuming that the “guesstimates” of value by policyholders is accurate. 2. Expecting policyholders to make the evaluation themselves 3. Accepting appraisals at face value
By far, it has been my experience that “expecting policyholders to make the evaluation themselves” is the most commonplace failure of property insurance adjusters and is a breach of the good faith obligation to investigate facts and evaluate value. Many insurance companies adjust the real property damage and then ignore the contents loss except for handing dozens of blank pages to policyholders. When insurance companies do this, they turn the insurance policy into a selfservice product rather than fulfill their promise to adjust an important coverage. To be fair, I have also noticed that some public adjusters do the same thing. They simply hand over blank pages and ask their client to do all the work—and then bill 10% to the client after the client has done most of the work. Noting this issue, the National Association of Public Insurance Adjusters (NAPIA) has highlighted at its conferences over the past few years a number of content adjustment processes which various public adjusters use to quickly and accurately determine contents loss valuations. The best public adjusters have dedicated teams of contents adjusters with true expertise and motivation at documenting and presenting contents losses. Being an insurance adjuster is a very high calling because policyholders and the public rely upon the adjuster to determine value and get the policy payments to the customer quickly. Insurance adjusters have to be a “jack of all trades” with knowledge about all kinds of property losses. Contents losses are tedious, time consuming, and difficult for many reasons. While contents losses may be an afterthought to many, it is just as important as other types of loss.
AUTHENTIC BRAND BUILDING: Leveraging High Value Advocates (HVAs) Who Passionately Promote Your Mission By Suzanne Tulien, Brand Elevation Expert
“Insincere, misrepresented, dishonest, so fake”! You’ve said them, you’ve heard them! Words that run through our minds as consumers when we come across a brand that is really good at touting what they say they are, what they stand for and what they believe in; only to find they’re as unauthentic as someone who lip-synchs pretending to be a singer. You can’t fake authenticity! Because to see it and experience it is to believe it; and when you don’t see it or experience it you don’t believe it. The pressure is on for every business to put a stake in the ground and BE what they SAY they are. CUSTOMERS NOT ONLY DESIRE AUTHENTICITY—THEY DEMAND IT Customers want to trust the brands they do business with. In today’s business landscape no organization can hide behind its marketing message. The message has to be backed by sincerity, trust and consistency in actions that prove they walk their talk, or you’ll get nailed to the wall faster than you can say “jack rabbit” because of the power of ‘word of mouth’ in both online and offline networks. For example:
In a Keller Fay study, the average American consumer discusses brands 56 times per week; 62% of these discussions are positive. You know what that means!? 38% are neutral to negative. In another report by Forrester, ‘Tapping the Entire Online Peer Influence Pyramid,’ 16% of people in social media are responsible for 80% of influential posts—impressions about products and services. In a study on the ‘Value of Corporate Values’ by Booz Allen Hamilton and The Aspen Institute, what you stand for (i.e., your values or guiding principles) are most critical in two strategic areas of your business—reputation and relationships. We’ve seen how ‘word of mouth’ can rapidly elevate or deteriorate a brand’s reputation and relationships. That’s why so many brands are hopping on the social media wagon to monitor the chatter about what’s said about them and hopefully, recover fast when negative press spreads like wildfire. I commend these companies; however, finesse in the social media realm
does not make a company authentic; being consistently steadfast in and delivering on your conviction to what you stand for however, does! And leveraging your authenticity to inspire others can deliver exceptional business results. AUTHENTIC COMPANIES NOT ONLY INSPIRE BUT THEY PROSPER Based on the ‘2010 Most Inspiring Companies’ research by Inspiration Blvd, LLC, there are 7 Key Principles of Inspiration and 4 Categories of Inspirational Brands. The study involved extensive consumer research on what made a company inspiring and which companies today are ‘Most Inspiring’. A very interesting finding in the Most Inspiring research is that the overriding principle driving inspiration is not a company’s product or profitability; it’s the extent to which others perceive the company is authentic and uses its products and services to serve the greater good of others. Oh….and, one more interesting finding, every brand that made the list shares one common Principle of Inspiration. Yep, you got it—Authenticity! Companies like Southwest Airlines, Apple, Newman’s Own, Google and others on the list consistently remain true to what they stand for and they demonstrate this consistently based on what has meaning and heart to accomplish their mission. THE ROAD TO AUTHENTICITY Tapping in and being true to what you stand for as a company is as essential as is the oxygen every human being needs to breathe. Authenticity is what gives meaning to how we show up in business and in all walks of life. It must be the guiding light that drives our behaviors, actions and decisions as a business. Our ability to remain authentic reflects the deepest part of our nature and true character as a company. When we compromise or don’t stand behind what we believe, we lose significant credibility and can suffer severely tarnished images (BP, AIG, Goldman Sachs) that take years to recover from; or the complete annihilation of the company (Enron, Arthur Anderson). At the heart of authenticity is what a business is founded on and what it aspires to be. It’s pretty simple. If you want to be authentic, do the following: 1. Dig deep to define your unique Brand DNA: a. What does your brand believe in? b. What has meaning and heart? c. What core values guide your behaviors? d. What standards of performance will you adhere to? e. What sets you apart from your competitors?
f. g. h. i. j. k. l.
What’s your personality as a brand? Does your brand have a strong point of view? If so, what is it? How can your products and services improve or enhance the lives of others? What makes your brand different or special? What emotions do you want your brand to evoke in others? What is the overall ‘lingering feeling’ for those who experience your brand? What is the ‘Inspirational Promise’ you commit to deliver to every stakeholder?
2. Based on the answers to the questions in item #1, review the Four Categories of Most Inspiring Companies to determine which category best fits your company.
Do-Gooders—companies that are inspired to make the world a better place for others. Newman’s Own is a perfect example where a portion of their sales are donated to a variety of worthy causes. Lovers—companies that are inspired by their commitment and dedication to their employees’ well-being and who in turn demonstrate passion, care and devotion to customers. SAS, the only B2B Company that made the list because of their commitment to their employees, encourages them to donate 40 hours annually of their time (company paid) to support needs in their local communities. Dreamers—companies that are inspired by, tap into and empower others to achieve their aspirations. Apple leverages their innovation to help people feel smart, creative and empowered. Heroes—companies that are inspired by their ethics and values, put a stake in ground to do the right thing and are not afraid to break the status quo. Ford lost $14 billion in the 4th quarter of 2009, yet chose not to take any bail-out money. Consumers responded favorably and Ford rebounded because of their courage and strength to stand behind what they believed was the right thing to do.
3. Align internal and external cultures—leadership, employees and customers to live and embrace your Brand DNA. Culture is the set of shared attitudes, values, practices and behaviors that characterizes an organization or group. Culture is impressionable and evolutionary. Every company has the opportunity to directly shape and influence the three cultures that comprise the core of its organization by turning them into HVAs.
Remember, everyone is a customer, and as customers we’ve become ever so discerning, demanding to be associated with brands that are real and relevant. Keep in mind too that organizations don’t have to donate millions of dollars for a social cause or be a large multinational brand to be a Most Inspiring Company. Just start with being authentic to what you stand for. Then create relevant and consistent experiences that inspire your customers to continue to come back and spread the word to others about your brand. You’ll be glad you did because of the enormous good-will to be gained and the positive impact to your bottom-line.
Your Financial Toolbox The year is half over and it is time to review all of your benchmarks! ARE YOU WHERE YOU WANT TO BE AND WHY OR WHY NOT? Sales and Production. Will you meet your annualized goal? Do you need to increase the goal? Do you need to reduce the goal? Are you working closely with marketing to make sure it happens? Now is also a great time to re-asses your Mitigation sales vs your Construction sales. Gross Profit Margins. Remember your job GPM Targets for Construction 35-45% and Mitigation 60-70%. Take the time to review each job individually. Make sure you are properly job costing the labor, subcontractor costs, etc. If you are consistently not meeting your margins, you need to know why. If this is the case some quick things to review: The estimate, (is it correct or did you miss something), labor, subcontractor billing, is there a supplement that needs to be turned in? You should never have a job below the target margin without knowing why it is below and how to prevent it in the future. How is your Mix of Business? Too much construction? Too much mitigation? Averages are 33% mitigation and 66% construction. If you are falling outside those averages, try to determine why and step up your marketing efforts to take you back in that direction. Remember – “What you ask for is what you will get!” Where is your Overhead? As your business grows and sales increase your overhead should decline, keep a goal of having it fall below 25%. Yours may be higher than 25% right now, but at least look at it and know why and if there is anything that can be done to reduce it. Also, keep an eye to the future and at what point it will be at or below 25%. What is your Breakeven? What do your sales need to be to cover your overhead? The formula: Total Costs year to date divided by your Average Gross Profit. This will tell you what your sales need to be to meet your overhead. Remember, there is NO profit in this formula, you are just covering costs. You should be tracking this quarterly, if not monthly. People! Is it time to make any changes? Do you need to advertise for any new positions or new people to fill positions? Having the right people in the right seats of your bus makes all of the difference.
And we will leave you with this…