HVACR Business May 2018 by HVACR Business

Industry Joint Ventures are Win-Win-Win By Pete Grasso 5

Don’t Let This Scam Happen to You By Ruth King 8

Control Your Online Reputation By Terry Nicholson 22

Find Success in Working with Your Partner By Angie Snow 23

Identify and Recruit Winners By Bob McEwan 24

MAY 2018 / VOL.13 / NO.5

HELP YOUR SERVICE MANAGER GROW Build a World-Class Service Department to Increase Your Revenue Page 10

Inside Sales: The Secret Weapon Page 13 Make Strategy, Marketing and Sales Work Together Page 18

ALSO INSIDE » Featured Entrepreneur: Bob Haak, owner of Black-Haak Heating, Inc. in Greenville, Wisc. ..............6 20 Questions with Vicki LaPlant Owner of Vital Learning Experiences..............26

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CONTENTS

MAY 2018 / VOL.13 / NO.5

F E AT U R E S

Help Your Service Manager Grow

D E PA R T M E N T S

Build a world class service department to increase your revenue. By Mike Moore

Inside Sales: The Secret Weapon

Make Strategy, Marketing and Sales Work Together

Editor’s Notebook

Featured Entrepreneur

Inside sales can exist even if you don’t have a dedicated person for that job. By Jodie Deegan Join forces to create sustainable growth for your company. By Jennifer Peterson

The Ingersoll Rand-Mitsubishi joint venture is the latest example of how U.S. manufacturers are evolving. By Pete Grasso

Bob Haak, owner of Black-Haak Heating, Inc. in Greenville, Wisc.

C O LU M N S

Protect Yourself from Scams Most of us think that data breaches only happen to large companies, however, it happens to all of us. By Ruth King

Control Your Online Reputation

Build a Professional Partnership

Identifying, Recruiting and Growing Talent

Eighty-six percent of consumers will decide against buying from you if they read negative reviews about you online. By Terry Nicholson Acknowledge and compliment your partner’s strengths, their great qualities and the good they bring to your business. By Angie Snow

20 Questions with Vicki LaPlant Owner of Vital Learning Experiences

M A R K E T WAT C H Stock Index: The HVACR Business Stock index shed 48.27 points, or 3.05 percent, and closed at 1534.31. To read this month’s analysis, visit hvacrbusiness.com/stock-index.

Attracting top talent to join your company requires a strategic plan and commitment to excellence. By Bob McEwan

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EDITOR’S NOTEBOOK

BY PETE GRASSO THE HVACR MANAGEMENT MAGAZINE TERRY Tanker Publisher ttanker@hvacrbusiness.com PETE Grasso Editor pgrasso@hvacrbusiness.com JIM McDermott Editorial Advisor jmcdermott@hvacrbusiness.com MEGAN LaSalla Art Director mlasalla@hvacrbusiness.com BRUCE Sprague Circulation Manager bs200264@sbcglobal.net BARBARA Kerr Executive Assistant bkerr@hvacrbusiness.com

ADVERTISING STAFF EAST COAST/SOUTHEAST JIM Clifford Regional Sales Manager Tel 201-362-5561 Fax 201-334-9186 jclifford@hvacrbusiness.com MIDWEST ERIC Hagerman Regional Sales Manager Tel 216-409-3246 Fax 440-731-8750 ehagerman@hvacrbusiness.com WEST COAST TERRY Tanker Publisher Tel 440-731-8600 Fax 440-731-8750 ttanker@hvacrbusiness.com

HVACR Business, founded January 1981, is a monthly national trade magazine serving contractors, mechanical engineers, manufacturers, manufacturer representatives, wholesalers, distributors, trade associations, and others in the heating, ventilating, air conditioning and refrigeration (HVACR) industry primarily in the U.S. The editorial focus and mission of HVACR Business is to provide business owners and managers with the very best business management concepts available. Critical topics covered include leadership, management, strategy, finance, sales, marketing, training, education, staffing, operations, human resources, legal issues, customer service and more. We are dedicated to helping contractors master these key management skills and provide them with the resources necessary to build strong, profitable companies. Every effort is made to provide accurate information, however, the publisher assumes no responsibility for accuracy of submitted advertising and editorial information. Copyright©2018 by JFT Properties LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, or by recording, or by any information storage or retrieval system, without written permission from the publisher. Subscription Rates: Free and controlled circulation to qualified subscribers. Non-qualified persons may subscribe at the following rates: U.S. and possessions: 1 year $48; 2 years $75; 3 years $96; Canadian and foreign, 1-year $108 U.S. funds only. Single copies $8. Subscriptions are prepaid, and check or money orders only. Subscriber Services: To order a subscription or change your address, write to HVACR Business, 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039 or call (440) 731-8600; or visit our Web site at www.hvacrbusiness.com. For questions regarding your subscription, please contact bkerr@hvacrbusiness.com. HVACR Business (ISSN 2153-2877) Published monthly by JFT Properties LLC., 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039. POSTMASTER: Send address changes to HVACR Business, 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039. Periodicals postage paid at Cleveland, OH and additional mailing offices. (USPS 025-431)

Industry Joint Ventures are Win-Win-Win

arlier this year, Ingersoll Rand, parent company of the Trane and American Standard brands, and Mitsubishi Electric Corporation, a manufacturer of ductless and variable refrigerant flow (VRF) systems, entered into an agreement to establish an equal partnership joint venture to expand distribution and offer more contractors an expanded ductless portfolio As big of an announcement as this is for the industry, it’s also the latest in a line of similar joint ventures and partnerships between U.S. manufacturers and Asian ductless companies. Last fall, Carrier announced a joint venture with Chinese manufacturer Midea that combined Carrier’s U.S. distribution with Midea’s ductless expertise. A year prior to that, Rheem and Fujitsu General announced a strategic collaboration to expand product portfolios for both companies. And, while not a joint venture along the same lines as these, I’d be remiss if I didn’t mention Daikin’s 2012 purchase of Goodman Manufacturing.

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Regnery: The joint venture will distribute products with the Trane or American Standard brand and the Mitsubishi Electric corporate logo to Ingersoll Rand channels. Kuntz: We will also continue to furnish the Mitsubishi-only branded products to our current customers, so the folks that have been working with us in ductless and VRF since its inception. We expect to continue to grow and thrive. What does this mean for the contractor? Regnery: A contractor wants to make sure they don’t disappoint their end customer. They want to make sure they can do the job right the first time, so they don’t get a call back. With the combination of the Trane expertise that already exists today, and the compliment of Mitsubishi’s technical expertise, this is going to be very powerful for them.

U.S. manufacturers are evolving and doing everything they can to make sure contractors have the best products for their customers.

What’s immediately clear from all of these business dealings is that U.S. manufacturers are evolving and doing everything they can to make sure contractors have the best products for their customers.

It’s certainly a win for both manufacturer parties involved — but it’s also a big win for the industry and especially you, the contractor, and your customers. So, what does this latest announcement from Ingersoll Rand and Mitsubishi mean? I spoke with Dave Regnery, executive vice president of Ingersoll Rand, and Mark Kuntz, senior vice president for Mitsubishi Electric, to get the lowdown. How did this JV come about? Kuntz: We originally came up with the idea through one of our mutual customers. One of our distributors, who also sell the Trane and American Standard brands, brought it to our attention that there is a really good fit here in terms of philosophy, quality, approach and innovation. What is the main point of this JV?

31674 Center Ridge Road, Suite 104 North Ridgeville, OH 44039 Tel: (440) 731-8600 Fax: (440) 731-8750 Web site: www.hvacrbusiness.com (ISSN: 2153-2877)

So, these ductless products will be co-branded?

Regnery: The new joint venture will include marketing, sales and distribution of ductless and VRF heating and air conditioning systems through Ingersoll Rand’s Trane and American Standard commercial and residential channels, and existing Mitsubishi Electric distributors and representatives in the United States and select countries in Latin America.

Kuntz: All of that support, infrastructure and the knowledge Mitsubishi has gained over 30 years in the business are now spread across the entire IR channel, accessible to their customers.

Is this another giant step forward in the U.S. for ductless manufacturers? Kuntz: Yes, this is a stamp of approval from a major U.S. manufacturer that ductless and VRF is going to be part of the mainstream in the U.S. market. Our sense is that, despite our 30-plus years of growth in the U.S., our products are still largely seen as niche or for specialized applications. This partnership signals ductless and VRF are going mainstream. Regnery: It’s got a growth rate right now that — while certainly not as high as people predicted three or four years ago — is still attractive. This JV ensures Trane and American Standard dealers have the right product for the customer. Are there any plans for future product collaboration? Kuntz: Co-development of new technology has certainly been a big part of the discussion. We’ve built in the U.S. what we call our engineering center, which is populated by Japanese engineers and U.S. engineers and is co-located with us in Atlanta. That will continue to be co-located, but it will be carved out and remain with Mitsubishi. That entity is fully expected to cooperate and coordinate with IR to develop things like hybrid VRF systems and/or hybrid multisplit systems, not directly as a part of this joint venture but as a follow-on activity that will provide products that the joint venture can sell. u HVACR BUSINESS MAY 2018

Featured

ENTREPRENEUR

Overcoming Adversity BY PETE GRASSO

ob Haak has been a part of the HVACR industry since 1963 when he started working for his uncle in the family business his grandfather founded. He learned the trade during high school. “When I started with my uncle, I’d work in the shop after school until he went home and then catch a ride with him since he lived in my parents’ neighborhood,” he remembers. “The pay those first few years was a glass of chocolate milk and a donut. I’d carry his tool box and whatever he needed when we weren’t working in the shop.”

BOB HAAK Title: Owner Company: Black-Haak Heating, Inc. Website: black-haak.com Year Founded: 1956 Headquarters: Greenville, Wisc. Work Performed: Residential and Light Commercial HVAC and Electrical No. of Employees: 49 Annual Revenue: $6.5 million

As Bob grew older, he helped carry furnace pieces into the home, back when the units were much larger than they are now. His uncle taught him many life lessons and treated him like a son. “Working with him taught me that I needed to get up every day ready to work,” Bob says. “After high school, I enlisted in the Marine Corps where I learned a lot about serving others and structuring my life.” As an airframe structure mechanic, Bob also picked up a lot of knowledge about working with metal — he learned how to fabricate the metal needed to repair damaged aircrafts. After his discharge, Bob went back to working for his uncle, capitalizing on the skills he picked up in the military.

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“I may have not been fixing airplanes, but I was using my metal-working skills to lay out our duct work,” he says. “We were doing a combination of new construction and replacements and I started going to school for A/C installation.”

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Bob and his uncle started laying the framework for Bob to purchase the business. But then, in 1988, Bob’s youngest cousin decided he wanted to take over the business. So, in 1989 Bob and his wife purchased a company called Blackies.

Certifications: EPA, Wisconsin HVAC Qualifier, WGA Loop Field and System Installers

“Blackies was a company that had been around since the mid 50s and the couple that owned it wanted to retire,” he says. “They did mostly service work and a few equipment replacements. We believed my knowledge of sheet metal for replacements and their service background made it a perfect fit.” One thing Bob credits for still being in business today is a Frank Blau seminar he attended early on as a business owner. “Frank had a question that struck a chord with me,” Bob remembers. “He asked, ‘Do you ever see a doctor in his scrubs at the grocery store? When he bends over do you see any exposed skin? Why are you worth so

HVACR BUSINESS

MAY 2018

much less than a doctor? We are both responsible for the health of the people we serve and we work with a very explosive element, natural gas.’” He also remembers learning about setting proper pricing. Prior to that, Bob had been taught by the company’s previous owner to call around to find out our competitors’ labor rates and go with a price right in the middle. Like many entrepreneurs, those first few years were difficult for Bob and his wife. In addition to running as many service calls as possible, he took all the night school classes on business he could find. Holidays were always spent in the shop. “We faced many other obstacles as we tried to survive, from petty employee theft to the previous manager of Blackies stealing our entire client list and taking it to a competitor,” he remembers. To cut expenses, they would forward the phones to their home at night, rather than a service, something he recalls as worse than having a baby in the home. One of the teachers Bob met from night school came in to help with the books. There were many weeks he didn’t take a paycheck so he could pay suppliers and employees. He learned to be frugal. In the early 1990s, Bob changed the name from Blackies to Black-Haak, because he’d built a notable reputation locally in the industry and I wanted that to be indelibly tied to the company. During the next few years he built the team he wanted — a team with members that understood customer service. “One of the things that makes us unique is the vast age differences among our crew and their ability to work exceedingly well together and relate to each other,” Bob says. “We have been able to build this team by hiring and retaining the best employees based on their attitude, not their aptitude.” Black-Haak’s average growth over the last 20 years has been more than 13 percent annually, and in the last four years they’ve have seen the average yearly increase to be above 26 percent. “Last year, we applied for and were awarded the Inc. 5000 award for being one of the 5,000 fastest growing privately-held companies,” Bob says. “With that in mind, we’re proud to continue to operate out of our original facility, even with all this growth. u Pete Grasso is the editor of HVACR Business magazine. Email him at pgrasso@hvacrbusiness.com.

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FINANCE

BY RUTH KING

Protect Yourself from Scams

ou receive a legitimate looking email from a manufacturer, a supplier, your insurance company, software provider or other company with which you do business.

Most of us think that data breaches only happen to large companies, however, it happens to all of us — except it isn’t large enough or sensational enough for the national news.

It says that you need to update your user name and password and gives you a link to do that. When you click on the link, it takes you to a legitimate looking website so you change your password.

A few months later you get an email from a vendor asking you to change the remittance address for your payments.

The scammers are in! They watch what you do. They watch who your customers are — and they watch whom you send checks or ACH payments to.

You don’t recognize the name on the email. But why would you? There are hundreds or thousands of employees at that company.

There is a phone number and email address if you have questions. You have a feeling this might not be real so you call the number on the email. The person answering sounds legitimate, so you send the payments to the new address — the scammer’s address. Or, you require a form to be filled out in order to change the remittance address. The scammer knows enough about your company and you that he can easily complete the form and send it to your customer.

THE TRUTH COMES OUT A few months later you get a call from the accounts receivable department (the real accounts receivable department) saying that payments have not been received.

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You disagree, saying you have been sending the payments, on time, to the new remittance address their company asked you to send them to. You send them copies

of the checks to prove you had paid. Suppose the payments are to Carrier, Lennox, Trane, Rheem, Ruud, American Standard, York, Johnstone Supply or another company who is a major vendor to you? You sent the checks in good faith. Can they make you pay the payments again? The jury is still out on the answer to this question. There has not been enough case law to say who is at fault and whether customers are required to pay their bills twice. There is case law with respect to payments to the IRS for payroll taxes. Even if you paid a payroll company and they didn’t pay the payroll taxes on your behalf, you are responsible for making sure the payroll taxes were paid. The IRS will make you pay the payroll taxes again — directly to them. This happened to a contractor I worked with several years ago. He ended up paying 18 months of payroll taxes twice, plus interest. The IRS was gracious and didn’t charge penalties. As you can probably imagine, these payments caused a severe cash flow crunch. Most of us think that data breaches

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only happen to large companies, however, it happens to all of us — except it isn’t large enough or sensational enough for the national news. And, it can hurt us worse than large companies.

They asked me to send the email to their fraud division, which I did. Be careful — it’s your hard earned money and other assets you are protecting! u

Ruth King is president of HVAC Channel TV and holds a Class II (unrestricted) contractors license in Georgia. She has more than 25 years of experience in the HVACR industry, working with contractors, distributors and manufacturers to help grow their companies. Contact her at ruthking@hvacchannel.tv.

Here are four ways to protect yourself and your company.

CALL SOMEONE YOU KNOW If you get a seemingly legitimate email asking to change remittance address, call the company phone number you have and talk with someone you know, rather than a phone number on that email.

MONITOR YOUR ACCOUNTS Monitor your accounts receivable every month. If payments are due net 30, on that 31st day you must make a phone call. If the payment was made, the customer should have a copy of the cancelled check. Ask the customer to send it to you.

If you get an email asking you to change your password, call the company’s fraud line and make sure it is legitimate.

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HVACR BUSINESS MAY 2018

HELP YOUR SERVICE MANAGER GROW Build a World-Class Service Department to Increase Your Revenue

BY MIKE MOORE

service manager may or may not have prior management experience — in many cases, they were formerly a highly productive technician — and it’s almost certain they’ll need new skills to succeed in the new position. Taking the time to coach your service manager may seem challenging, but it will pay dividends in the smooth operation of your business, and the increased revenue that a well-run service department brings. The service department is the heart of your company, and should be run as a business. To do that, your service manager needs to have a global view of the organization as a whole, the company’s mission and strategy and how the service department fits into and supports that vision. The service manager also needs to cultivate a tactical understanding of how each

HVACR BUSINESS MAY 2018

The service manager needs to cultivate a tactical understanding of how each team member contributes to the company goals. team member contributes to the company goals.

a coach to the technicians and installers, rather than doing the job for them.

For many people, either the overall strategy or the more tactical approach, comes more naturally. To run the service department well, it’s important for the service manager to balance both ways of looking at the company.

A highly competent and knowledgeable technician, upon reaching a management position, may struggle to delegate. It may seem easier to just do the job. As the service manager, it’s more important to coach and advise, and also to be available for consultation and to help diagnose technical issues for multiple technicians who are on service calls, versus getting too wrapped up in any one job.

COLLABORATIVE MANAGEMENT A service manager needs to practice collaborative management. Encourage your service manager to hold regular meetings with the team, and to be more of

This is where technology can be a great ally. Your service manager and technicians

can use video apps via smartphone to discuss and diagnose issues remotely, rather than your service manager having to be onsite. In the current technician shortage, it’s not always easy to be fully staffed. Make technology your friend, to help extend the service work that your team can handle. Leaders need to know how to delegate. Successful delegation is neither dumping, nor micro-managing. Employees know when their superiors dump their own work on the team, and they will also resent being micro-managed. Delegating the right tasks to the right people allows those people to grow in their own skills and careers, and helps to ensure that the work is done efficiently and well. One vital purpose for regular team meetings is to let the team know exactly what is expected of them. No one can

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perform according to expectations, if they don’t know what those are. The service team should meet daily for training, updates and to maintain team cohesion. Once per month, bring the whole organization together for a bigger huddle. Share the organization’s goals, “wins” from the previous month and core priorities for the coming month or season. Successful managers have to be great planners. Work with your service manager to put together a plan for the coming year, including the key performance indicators (KPIs) you’ll use to measure success. One of your goals should always be to improve the customer experience.

MAKE MONEY Your service department needs to make money. Often, technicians are dubious about the rates your company charges, because they compare what you charge the customer against their hourly wage. Odds are, there’s quite a gap between the two figures, and your technicians may assume you’re just raking in the profits. A service manager can redirect this thinking by making sure the technicians know what they’re worth. The more your technicians understand about the service department’s overhead, the easier it will be for them to see why you charge what you charge, and how important their efforts are to the company’s financial wellness.

CUSTOMER SERVICE Another key aspect of a service manager’s job is training the team on how they’re going to treat customers. They have to

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A key aspect of a service manager’s job is training the team on how they’re going to treat customers. They have to take care of the customer, as much as the equipment. take care of the customer, as much as the equipment. Often, homeowners are not happy when they have a reason to see your technicians. They’re likely uncomfortable; either too hot or cold, and possibly worried about the cost of maintenance. Your service manager should insist that technicians role-play each morning to practice customer interactions before they go out on calls. When they get both the customer care and the equipment maintenance right the first time, it reduces callbacks, saving you those high costs. It’s also important to use service to tie customers to the company. HVACR can be a feast-or-famine type of industry, but pre-sold maintenance agreements can help to fill the slowest months, and keep your technicians in front of customers all year. Every time you sell new equipment, your people should be asking for a maintenance agreement, too.

TURN OVER LEADS Technicians want to fix things. That’s what they do. For your company to work together as a cohesive organization, your service manager has to get the service team to turn over leads to the sales team, when

it’s in the best interest of the customer. Say a customer has a 20-year-old unit. Your technician can repair it, but is that necessarily in the homeowner’s best interest? They might be much better off with a newer, more efficient system. Your technicians need to be trained in discussing the “repair or replace” question with homeowners, so you can offer the best service overall. This can be challenging, and might be an area where an outside training partner can help to build your technicians’ customer communication skills. Customer experience can’t just be a top-down priority. Rather than focusing on changing employees’ behavior, your service manager should work to influence the way the team thinks. Along those lines, a service manager needs to get buy-in from the crew. Understanding why it’s important to offer after-hours and emergency service will go a long way toward helping technicians to take ownership of that, rather than resenting the long hours. They can create their own rotation, too. Rather than dictating who will work longer hours and when, your service manager should give the team an opportunity to collaborate on that rotation.

COMMUNITY INVOLVEMENT Community involvement is part of being successful. As you are no doubt painfully aware, recruitment is vital if the industry is to keep up with demand. That’s why your service manager needs to be out in the community, getting to know high school and community college students, meeting and talking with their parents, participating in career fairs and career-related events. Making time doesn’t have to be a massive undertaking. If your service manager works 40-50 hours per week, spending 10 percent of that time on recruitmentrelated activities in the community would roughly equal an hour or so per workday. Coaching your service manager in these areas is part of your success as a leader, too. Lead your people to make better choices, and pull their best out of them, by influencing their thinking, not just their actions. HVACR is a people business. When great people follow great processes to create great experiences, the business thrives. When everyone on the team understands the big picture, the plan, and their part in it, you’ve got a great thing going. u

Mike Moore isn’t just an HVACR expert; he also knows a thing or two about HVACR employee training. As one of HVAC Learning Solutions founders and director of training, his biggest goal is to help HVACR leaders and technicians grow their business and build lasting skills. Visit hvacls.com for additional information.

HVACR BUSINESS MAY 2018

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INSIDE SALES: THE SECRET WEAPON Proper Training Can Boost the Effectiveness of this Overlooked Element of Your Business

BY JODIE DEEGAN

hat if I were to tell you that the key to generating calls for your company is a simple and easy process that won’t cost a lot of money? You may have most of the key ingredients already, and with a few simple adjustments you can be up and running in no time. I’m talking about the process known as inside sales. The inside sales position is often dismissed as something only large companies do. Don’t believe it, because inside sales can exist even if you don’t have a dedicated person for the job. If your company is like many, you have at least one person wearing multiple hats. For example, if your business doesn’t have a full-time customer service manager, that’s fine. Someone is doing that job at least part of the time; and you make it work. You can do the same with inside

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It’s important that your outbound calls are made by someone who sounds like a friend. Your caller shouldn’t sound like a telemarketer. sales. You may not need an additional person; one person wearing multiple hats might suffice. Now that I have your attention, let’s focus on the benefits and roles of inside sales. Anything that involves generating revenue activity by calling customers falls into the inside sales title. There are also some sub specialties of inside sales that we will talk about in a moment. We’ll also talk about who might wear this hat if there isn’t a dedicated person.

INSIDE SALES Typically, this involves outbound calling. It may involve calling potential

customers or your existing customer base. This is the most basic and effective way to generate work right now, aside from knocking on doors. Just to stress how basic and essential this role is, if you were a one truck owner and didn’t have work today, you would get on the phone and start making calls. This is inside sales in its purest form. Great inside sales people generate a lot of revenue by calling customers with compelling offers. Calling your existing customers usually yields the best response. The offer could be a water heater flush special for plumbing customers or a heating or cooling check for HVAC. This is

especially helpful when you’re launching a new service line and don’t have the awareness or marketing to keep everyone busy yet. Inside sales can also make follow-up calls to support marketing campaigns. This can often give campaigns the one-two punch that makes them more effective. Telemarketing has gotten a bad rap and has lost a lot of ground due to technology and customer distaste. Therefore, it’s important that your outbound calls are made by someone who sounds like a friend. Your caller shouldn’t sound like a telemarketer.

PROFU Short for “professional follow up,” it’s a sub-process of inside sales. This sales professional follows up on work that was quoted but not sold. There may not always be a need for this continued on page 14

HVACR BUSINESS MAY 2018

continued from page 13

notes why there should be an exception.

role. It isn’t the most efficient approach, because success lessens as time passes. Initial follow up should be within 24 hours unless there are specific reasons or

Absence doesn’t make the heart grow fonder when it comes to professional follow up! There may be a need for this position if your sales team has a high

volume of leads that aren’t being closed or followed up on. Again, this isn’t the most efficient approach; on the other hand, it only takes a few sales to make this position viable. The quality of the initial visit and

how well information is given to customers will have a direct effect on results. I’ve seen great long-range success when technicians are setting up off-peak season work, like duct replacement leads, for installation crews to do in the cooler months. This is a logical strategy given the attic temperatures in some markets. If opportunities like that are set up properly, a PROFU can really deliver some much needed off-season revenue. Customers are getting their work done when it’s more comfortable for them, crews are working, and revenue is coming in when you need it the most. Everybody wins.

Sometimes strong inside closers make mediocre sales teams shine. This person must be willing to drive the team to achieve desired results. INSIDE CLOSER This is another sub-process of the inside sales umbrella. This is another high return activity and one that I think is pretty efficient. This sales professional interacts with technicians, sales people, and customers when you’re in the home.

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The goal is to help customers find the right solutions so that work can be taken care of the same day. This eliminates return visits, which are inefficient. In many situations, your chances of getting back in customers’ doors are pretty small. By having conversations when you’re in customers’ homes, it’s much more likely you’ll secure the work and get customers taken care of right away. Inside closer is often the role of the person wearing the sales manager hat, but unfortunately, it often falls to the wrong person or nobody at all. I’ve seen strong inside closers make mediocre sales teams shine. This person has to be familiar with your products, pricing, and margins, so this is usually best executed by someone with a high level of experience. continued on page 16

HVACR BUSINESS MAY 2018

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When you find the right person who enjoys inside sales, you’ve truly found the secret weapon to stabilize your business and keep your team moving!

Make sure you have accurate tracking in place to measure results so you can coach, reward, and recognize success. A good way to track results for many organizations is to make the inside sales person the lead source on the calls they book.

customer confusion. Make no mistake about it — this position requires a certain amount of sales ability.

If you’re able to generate reports in your software for calls and revenue by lead source, paying for results becomes easy.

continued from page 14

This person must be willing to drive the team to achieve desired results.

SCHEDULER This sub-process of inside sales is typically a more entry level position; or possibly a CSR or dispatcher. This involves calling to schedule customers who are in your club or hold maintenance plans. This person needs to be proficient at scheduling and understanding the payment and renewal structures, to avoid

Who makes a great inside sales person? The number one asset is likeability over the phone. The common ingredient I have seen with the best inside sales

professionals is that they enjoy carrying on conversations with complete strangers. They are typically solution oriented and empathetic. They have to be OK with hearing “no” because there’s a pretty high level of rejection. There’s definitely a mental game taking place here, and the inner communication to stay positive is a skill not everyone has. One of the most common mistakes I see in companies who don’t have dedicated inside sales people is “making” all the CSRs do outbound calling. That’s sometimes the only option, but I would encourage you to identify or hire at least one person who excels at outbound calling. Keep the person who is best at this focused on generating calls. Training and scripting are the tools for success in this role. Identify the obstacles and create scripts that address the most common scenarios. Most of the time the objections will be consistent. With proper training you can boost the effectiveness of this process dramatically. The best results are typically achieved by having compensation plans that deliver bonuses or spiffs based on results. Finding the right person who is motivated by results is important.

HVACR BUSINESS MAY 2018

Make the tracking fun and have goals to celebrate. This can be a tough game, so it’s important to make it fun to keep your inside sales person’s head right. This person will hear a lot of “no’s”, so hire a person who can absorb these and keep dialing. I’ve found that people who are successful in this role typically take to it pretty quick. If someone is struggling in this role, then they probably aren’t the right fit for this job. When you find the right person who enjoys inside sales, you’ve truly found the secret weapon to stabilize your business and keep your team moving! u

Jodie Deegan is a training accountability coach with Nexstar Network. His focus is helping Nexstar members implement processes to get the highest levels of success from their training. Jodie has worked in the trades for over 30 years. He began as an HVAC technician and grew to president of several large HVAC, plumbing and electrical service companies. Visit nexstarnetwork.com for additional information.

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MAKE STRATEGY, MARKETING SALES WORK TOGETHER

Join forces to create sustainable growth for your company

BY JENNIFER PETERSON

t’s a common complaint among HVACR companies: Every year the marketing budget increases. Every year the leads stay the same.

Why is that?

The simple answer is if you always do what you always did, you’ll always get what you always got. In other words, if you’re not changing your strategy or revamping your tactics year to year, you shouldn’t reasonably expect your results to change either.

Like everything else, you can depend on the cost of marketing to naturally continue to rise, but without refreshing your strategy, your results will likely remain the same. you’re putting out other fires. Additional factors may also be at play, such as:

Like everything else, you can depend on the cost of marketing to naturally continue to rise, but without refreshing your strategy, your results will likely remain the same.

The marketing isn’t actually strategic. It follows the same pattern in spring and fall, pushing the same products and the same specials and promoting only what’s important to the company, not what’s important to the customers. And the push is sporadic, not continuous, year after year.

How do you get into this rut? Part of the answer lies in the relentless, everyday demands of your business, because it’s easy to set your marketing on auto pilot while

The growth initiatives and goals identified by the top leadership are not clearly communicated or aligned to the marketing and sales teams.

HVACR BUSINESS MAY 2018

Marketing that worked 20 years ago is assumed to still work just as well today. Brands may be adding PPC, SEO, and mobile, but they are failing to dive into the psyches of their consumers and develop and deploy messaging and creative that connects through the right communication channels.

For instance, leadership wants to focus on growth through system enhancements, marketing is pushing preventive maintenance, and sales is experiencing an increased demand for fuel delivery.

If any of these conditions describe your company, don’t worry. A few simple adjustments can get your marketing efforts fully aligned and on track for more satisfying results.

There’s a disconnect among the key players.

GATHER THE RIGHT PLAYERS

Salespeople, estimators or other staff who are on the front lines with customers aren’t included in the marketing strategy or messaging process. This is a big misstep but surprisingly common.

To balance both your long-term marketing objectives and your short-term business demands, it’s important to strategize with the right players. Companies of all sizes struggle to ensure that top-level strategic planning, marketing initiatives continued on page 20

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and sales efforts are fully aligned for efficiency and effectiveness. Even brands that start out with the best of intentions to bring the three areas together sometimes lose momentum, as they must focus on critical day-to-day business needs. But, when these elements work together in concert, maintaining focus in both areas becomes much easier, even when daily demands take precedent. Many companies get into a bad habit of having top level leadership set growth goals without the full collaboration of marketing and sales. The sales force in particular is woefully underutilized when it comes to identifying customer preferences and pain points and selecting tactics to reach target audiences. Instead, marketing plans are often prescribed to the sales force without being evaluated to determine their effectiveness from year-to-year. It’s easy to succumb to the routine. Routines are comfortable and

When these elements work together in concert, maintaining focus in both areas becomes much easier, even when daily demands take precedent. easy. It’s spring, so it’s time to send out the summer cooling mailer. But, how effective is that air conditioning mailer going to be at generating leads when it’s snowing in April? It’s not uncommon for the sales staff to become frustrated with marketing efforts that don’t effectively support their goals, especially in larger companies that have multiple departments. Marketing may not deliver the right leads to sales, or residential or commercial sales managers might feel as though marketing doesn’t capture the customer pain points and needs that they encounter. Each of these disconnects results in planning and execution that is not as effective as they could be.

You can avoid this disconnect by including your sales staff in your seasonal or annual strategy sessions. Your sales team is an incredibly valuable source of information about your customers and market conditions, and they need to have a seat at the table. After all, this group will be responsible for delivering on the messages you choose to communicate, and they have the most intimate knowledge of your audiences. They can also help your marketing efforts be much more responsive and, thereby, much more effective.

LESS ABOUT WHAT, MORE ABOUT WHY Regardless of whether your business is residential, commercial or both, the HVACR world is full of small daily demands that can easily distract you from your big picture marketing goals. Case in point, it’s April in Central Pennsylvania, and it’s snowing with more snow predicted to arrive later in the week. This unusual weather pattern means local HVACR businesses are still getting heating service and fuel oil calls during a time of year when they typically would be launching spring campaigns to gear up for the cooling season. Before you and your team decide what you’re doing, you need to decide why you’re doing it. As mentioned earlier, routines are easy and comfortable, but they’re not inherently effective. You may always send out a spring mailer about air conditioning maintenance or a fall mailer about new furnaces or fuel delivery, but you need to be responsive when those messages aren’t appropriate and need adjustment. You also need to take a fresh look at your tactics from time to time. Direct mail is great, but would PPC be more effective in your market for your demographic? What about SEO? Your company may always attend a regional home show, but if the attendance at that show no longer represents your target market, perhaps it’s time to roll up your banner. There are a lot more marketing tools at

HVACR BUSINESS MAY 2018

your disposal today, but just because you can use a new tactic doesn’t mean you should. That’s why it’s important to define your goals first and let everything else flow from there. Defining your goals up front creates alignment at the outset. Your team can quickly evaluate both old and new tactics throughout the season and throughout the year based on established criteria, and you won’t have to repeatedly justify why certain tactics are no longer supported. If they don’t align with the company goals, they don’t happen. Everyone is on the same page. Everyone follows the same rules.

ALL TOGETHER NOW Strategic planning takes time, so stack the cards in your favor and choose a time of year when your business is at its least demanding, so you can give it the most attention. If you’re in a management position, come with goals in mind, but be prepared to shift, adapt, or add to those goals based on input from other departments and positions throughout your organization. What you’ve always done may not be working anymore, and you may need to break out of some old cycles to generate new results. The best strategies marry high-level business objectives with the real, everyday needs of your customers. Those who routinely interact with your customers can help inform your key messages by identifying and removing objections and speaking to specific pain points. They can also help you determine which communication channels will be most effective at reaching your target audiences in the decision-making moment. The more you involve your sales team in defining your goals and creating your marketing strategy, the more likely you are to increase your leads and enjoy sustainable growth. u

Jennifer Peterson is president and co-founder of Wavelength Marketing LLC, a full-service branding and public relations firm using relevant messaging, audience targeting and program integration to increase marketing effectiveness. For additional information, visit wavelengthresults.com.

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MARKETING

BY TERRY NICHOLSON

Control Your Online Review Population

rare individual with a rare zest for reptiles decided they wanted a pet. After importing a Burmese Python from Southeast Asia, the snake grew so large it was no longer appropriate as a house pet, so they released it into the Florida Everglades. This single python is like the one bad review lurking and looming on your Yelp or other online review sites. The truth remains that in this digital age of our lives, 92 percent of consumers are reading online reviews for help

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Eighty-six percent of consumers will decide against buying from you if they read negative reviews about you online. throughout the decision-making process on where to spend their money. But, back to the Burmese Python saga, which continues to slither onward. Naturally, the lonely python laid eggs, so what was once a single python has multiplied over time into a population of 100,000.

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These sly creatures exist at the top of the food chain. Their sizeable physical nature and generous appetite lends them to a diet of deer, birds, turtles and even alligators! This reptile-saturated population threatens to eliminate all native animals in the Everglades should they continue to overpopulate. Here’s one more thing you should know about these goliath serpents: They bite occasionally but the fear they instill upon their victims is not in their venom, it’s in their strength. They wrap around the victim to encapsulate them and their grip tightens to create constriction. Now multiply that strength by 100,000. Choke. This vicious cycle can occur in your business if you don’t handle that one negative review. According to B2C, “Eighty-six percent of consumers will decide against buying from you if they read negative reviews about you online.” Negative reviews can stem from a number of different issues, but the most common complaints are: 1. Client had a negative customer service experience. $10 off your registration with this code! 2. There was a problematic issue with equipment. 3. Multiple service visits from your company with no solution. Here’s what you can do when you get a negative review.

care about the customer, it establishes a rapport with that individual. Clients will be less likely to leave a negative review with a company they feel they have a relationship with.

TAKE IT OFFLINE Publicly address the concern and encourage them to call you directly or email you. Public debates can go on and on, so if you can calmly take the conversation to a more private location, you could increase your success.

COMPASSION AND EMPATHY Show compassion and empathy. By fully hearing their concern, you will allow your client to share how they have been let down by your company. This opens the door for you to fix it. Instill confidence that you can make improvements and explain the impact of the review to the client.

ASK FOR RETRACTION Sometimes simply by asking for a retraction or an additional review that shows your responsiveness is all it takes. Online review sites can be great for business, as they can encourage consumers in the decision-making process to hire you. One negative review, however, can take over the Everglades of your company and bring you one step toward extinction. u

Terry Nicholson is chief success officer and leading HVACR expert at PRAXIS S-10, the fastest growing success college for contractors. Visit praxiss10.com for additional information.

HVACR BUSINESS MAY 2018

Call the reviewer and listen to their side of the story. This not only shows that you www.hvacrbusiness.com

STRATEGY

BY ANGIE SNOW

Build a Professional Partnership

hen selecting a partner for your HVACR business, it’s important to find someone who is not only business savvy, but someone you can trust and has your complete confidence. Many potential business owners turn to the people they are closest to — friends, family or even their spouse. Eleven years ago, my husband popped the magic question that changed our lives forever, “Will you buy an HVACR business with me?” I love my husband and I love a good challenge, so of course I said yes! As new business partners, we made a commitment to put everything we had into our new business to make it successful. Yet, we knew our commitment to each other and to our marriage would always come first. The ultimate goal was that by being business partners, it would bring us closer together, not tear us apart. We started with a strategy that included setting some guidelines and rules to keep our partnership as professional as any other business partnership. These guidelines have strengthened our business partnership as well as our marriage.

PROFESSIONAL CONDUCT Regardless of our relationship, we run a business together and we’re devoted to a high level of professionalism at work. We dress professional, we speak professional and we act professional — just like we would if we were working for someone else or if we were partners with someone else. Of course, we have personal issues and items that need to be addressed in our marriage and family, but the office is not the time or place to discuss family matters. When we’re at work, we stay focused on work and save our personal discussions for later.

SAME TEAM My husband and I have four children, and when mom says no, sometimes they go www.hvacrbusiness.com

ask dad. What my children have learned is that mom and dad are on the same team. So the answer is still no. Likewise, when our employees come to us with a question or issue, it’s important for us to be on the same page. Even if I don’t completely agree with my husband’s decision, I back him up until we can further discuss the issue. When we do discuss it, it’s done in private — not in front of the team. We cannot show any cracks in our partnership.

Angie Snow is the co-owner and vice president of Western Heating & Air Conditioning in Orem, Utah. She and her husband, Ryan, purchased Western in 2007. Visit timeforcomfort.com for additional information.

SEAL MORE,

SAVE MORE WITH

BUILD EACH OTHER UP When you work with (and in some cases, live with) someone every day, you become familiar with his/her strengths and weaknesses. Your partner has a lot of great abilities and attributes. You know this because YOU chose him/her to be your partner!

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It’s easy to find fault, but it doesn’t do anyone any good. Acknowledge and compliment their strengths, their great qualities and the good they bring to your business. Even more important, compliment them in front of your team. It feels great when my husband tells the team that a marketing campaign I did was a slam-dunk. Likewise, I love my husband’s vision for our company and I make sure to share that with my team. I look for opportunities in meetings, emails and in conversation with my team to acknowledge him, his great ideas and strong leadership skills. It’s not easy owning and growing an HVACR business, but it sure is a lot more fun and rewarding when you have someone you love and trust to do it with. Our business is stronger and better because of the different strengths and talents we each bring to the company. The professional guidelines we put in place to run our business has helped us have a solid business partnership — and an even better marriage. u

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LEADERSHIP

BY BOB MCEWAN

Identifying, Recruiting and Growing Talent

ow do you identify a winner? What traits does a successful employee have? How do you attract and grow talent? There are many ways to recruit and attract. Here are just a few.

When assessing new employees you should set up a process where you measure soft skills traits.

Have a great company website. Employees today pick you rather then you pick them. Websites need to go beyond the goods and services you provide but talk about careers, how you operate and as a new employee you are valued.

You must explain your culture and mission in all these external communications. People need to get a feel for your company. Is it a match for them and you? Have a competitive total benefits package. Wages, benefits and address things like work-life balance, diversity, and volunteerism Use your employees and their networks. Often times the new employee maybe someone who is not necessarily looking for a new position. During the entire hiring process you should have current employees be part of the process.

IDENTIFY The first key is to know what you want in an employee. I recently listened to a documentary on Jimmy Johnson’s career. He was a successful college and professional football coach with several teams but most notably the Miami Hurricanes and the Dallas Cowboys. He was asked a question about how to

HVACR BUSINESS MAY 2018

Jack Welch, my boss for many years, knew that people made the difference he had a corporate process across our entire company called Session C. Jack always measured people on two things: their ability to make things happen, and did they have personal energy and drive to energize people. Twice a year Jack would come to each individual business within GE and spend an entire day to discuss people. By April of every year he would have assessed all the top talent across the entire company, thousands of people.

Use the social mediums — sites like LinkedIn and Monster — to advertise your position. Advertise your position in the right journals, association flyers and blogs. Spend the time to make sure your job description matches what you are looking for. Have HR, functional folks review and approve the final posting.

GROW EMPLOYEES

identify the best talent. How do you know which high school recruit will make a great college player? Likewise, what collegiate player will be a successful professional? He listed the traits in ranked order one to 10. His first traits were: Can he play? Does he have passion? Does he have game awareness? He went on to say that many athletes were blessed with size, speed and quickness but it was this intangible that made the difference. Many people have the hard tools, great education, academic excellence and the right experiences but do they have the soft skills. Can they work in a team environment, inspire co-workers and engage others. When assessing new employees you should set up a process where you measure these soft skills traits. Emotional Intelligence (EQ) is so important for leaders, employees and the workplace. People that possess these traits seem to do better inside organizations; they become your top talent. EQ is about you and the team that surrounds you. It can be described as the following:

• Self- awareness: emotional self-awareness, self-confidence and accurate self-assessment. • Self-management: transparency, adaptability, initiative, and self-control. • Social awareness: empathy, compassion and a sense of servitude. • Social skills: trust, honest, communications, collaboration and influencing others in a positive way. These elements are not easy to assess and measure. As a company trying to attract great talent, promote and grow your folks, it is essential to take the time to establish a plan. This plan should include how and what questions you should ask during the interviewing process. During the on-boarding time you need to start the training and teaching of these skills. As you grow the individual you must track, measure and provide feedback so that they can personally improve, gain the confidence to work with others, show compassion and develop a trust with the team.

He and the corporate Human Resource team established criteria around operational excellence and soft skills. Everyone was measured the same way. He demanded that career growth plans be established for each high potential person at all levels. He spent a great deal of time talking, counseling and advising early to mid career folks. He was constantly challenging us to give folks meaningful roles, stretch people and allow them to grow through diverse and tough assignments. This drove our behavior thus GE became known as a company that grew leaders. He made growing our talent a priority. Set up some good performance management tools. Continue to assess your talent, provide mentoring and training. Most importantly tell them you believe in them. And finally, engage your workforce constantly in all areas; they must be part of the team. u Bob McEwan, who retired as the general manager of GE Aviation’s global supply chain, continues to consult with GE Aviation, its partners and other aerospace companies in engineering and supply chain management. He also conducts leadership seminars for executives and corporate staffs. For additional information, visit mcewanleadership.com.

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20QUESTIONS

>> with VICKI LAPLANT

We sat down with Vicki LaPlant, president of Vital Learning Experiences and longtime industry consultant. LaPlant discussed education, opportunities for women and the most rewarding thing about helping contractors. 1. Could you tell us about your background in education? I was a high school English teacher when I graduated from college. The nice thing was, I had a minor in Math, because they told me I’d never teach English, but I did. After four years of teaching high school kids, I said, “Okay. I’ve paid back my debt to society. I need to do something else, and make a living.” 2. Is that when you joined the HVACR industry? Yes, I was looking for work and Lennox hired me as a curriculum writer/developer. They knew I could develop curriculum and said they’d teach me the technical side of the business. I started off in their training department and was with Lennox for 16 years. 3. What did you enjoy most about that role? The wonderful thing about the experience Lennox gave me is, because they sell direct to the contractor, that’s how I spent the majority of those 16 years. I loved that opportunity to learn, and work directly with contractors. I learned from some of the best contractors in this industry. 4. That’s a hiring model contractors could follow, don’t you think? Yes, I think contractors are realizing, if they start hiring people with good attitudes, good communication skills, they can teach them the technical side of how to be a maintenance technician. If they’re good with their hands and want to learn more technical stuff, then you can invest in them from a standpoint of getting them additional technical training. 5. What was attractive about the opportunity at Lennox? It was an opportunity to take the skill set I had, which was the ability to teach and relate to students. I knew I wanted to work with adults. With adults, when you’re explaining a concept, something particularly like the financial side or the marketing side, you see a light bulb go on. 6. Did you move directly from Lennox to your own consulting business? In 1995, Lennox was going to go public and that’s when I decided it was okay to leave, because I’d gotten so far away from working with the contractor and helping them be successful. I was ready. 7. How did you get started? My husband John and I had already made so many contacts throughout the industry. At first we primarily worked through manufacturers and distributors, setting up training classes and creating curriculum. The manufacturers would put us in touch with their distributors and we’d set up local classes.

HVACR BUSINESS MAY 2018

8. What is your management philosophy? The most important thing any manager, regardless of whether you own the company or you’re a manager within the company, is to focus on your employees. The focus has to be on making them feel good as people, letting them know how they contribute to the overall good of the company.

14. How have women’s roles changed? Not only are there more women technicians and sales people, but also there are so many more businesses that are owned by women today and they’re successful! There are tremendous opportunities for women, not only from a standpoint of “working in,” but owning contracting businesses as well.

9. What’s the biggest misconception about the current workforce? Millennials are lazy (laughs). That’s the biggest misconception, because I don’t think Millennials are lazy, they just have a different set of values than the typical Baby Boomer.

15. What areas of training do contractors seem to need the most help? There’s still a lack of understanding of their numbers. If they understood the financial side of their business, they could make better pricing decisions. It could make them more successful in knowing how to compete.

10. Could you explain? Boomers always define everything as, work first. As a result, they’ve grown wonderful businesses, but then they turn around and go, “Hey! My kids are all grown and I didn’t get to go to the birthday parties, the Little League games, and all of that. I’m glad I’m successful, but I sure did miss out a lot.” Millennials have seen that, and want more balance in their lives. 11. So Millennials want more flexibility? It’s recognition that, as boomers we need to have a little bit more insight into what’s important to them and what they value. Millennials aren’t lazy. They’re willing to work, but you’ve got to work with them. Work is not the be-all, end-all for them. 12. What opportunities do you see for women in this industry? It’s huge. You can’t negate the science. Women are better at listening and women can relate better to the homeowner. I tell contractors all the time to hire more women as technicians and as sales people, and they always ask where to find them. 13. So, where do you find great women to hire? Go to any retail outlet. Go to your local restaurant. Watch a waitress, who gives you really good customer service. Talk to her and say, “You do a great job. How much are you making?” And, they’ll tell you, $3 an hour, plus tips. Ask if they’re interested in a job that makes $10 or $13 an hour, guaranteed. It involves their customer service skills and you’ll get them the technical training.

16. What’s the biggest opportunity for contractors today? Technology. There are so many exciting things contractors can do with a maintenance agreement customer. You get them wired in to you, you get it so that their thermostat tells you when there’s a problem. Their outdoor unit says, “Hey! I’m low on refrigerant.” That comes to you and you call the customer. They’re not inconvenienced. 17. What should contractors know about hiring a consultant? Make sure you get a list of references. And, make sure they’re going to follow up. The one thing that John and I hear all the time is, “We hired these people, we paid them a lot of money, and you know, they gave us certain things to do, but then they didn’t follow up. They gave us a three-page written report, but it really doesn’t tell us how to do some of the things that we needed to do.” 18. So, it should be more of a partnership? I’m not saying a consultant should ever hold somebody’s hand, but they should be your conscience. They should check in with you at least once a month and follow through. If they’re going to say, “Let’s create a process for the service department,” they should have examples of how other companies have set up processes for their service department. 19. What is most rewarding about your job? It’s still working with contractors. When we see contractors and they say “ I love running my business again. I’d gotten burned out. I’m so excited about being in business again. I’m making money. I really have fallen in love with my business again.” That’s what it’s all about. 20. What’s the best advice you’ve ever gotten? It’s probably from my Dad. He was just an amazing man and it was more than what he ever said to me, it was the way he lived. He always looked for the best in people and, as a result, they gave him the best. Look for that good and see if you can’t build on that.

www.hvacrbusiness.com

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