GEMAIREELITE FREE
Spring/Summer 2013
www.Gemaire.com
A business magazine for Gemaire partners
Make more money in 2013 with technology Track your trucks to increase profits
OUTDOOR GRILLS
- Find the right one
Flat-Rate Pricing Why you should consider it, now
NASCAR
Why Rheem uses NASCAR to build your brand
What’s inside...
9 Gemaire Elite 6
Offering products and services to grow your business.
Payments 8
Grab, swipe and go! Taking payments in the field is easier than ever!
Fleet management 9
It’s 3 PM, do you know where your employees are? Well, now you can.
HVAC Tech 10
Letter from the CEO 2
Gemaire CEO Ken Connell shares his thoughts about 2013 and beyond.
G.A.M.E. 3
Gemaire’s revamped extranet will be your gateway to important information.
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New Products 4
Exciting product offerings from Rheem, APCO and Marvair
12
The latest, most modern ways to manage and maintain your HVAC systems.
NASCAR 12
How NASCAR builds the Rheem brand and drives sales.
Flat-rate pricing 16
If you haven’t moved to flat-rate pricing, you might want to reconsider.
Marketing Made EZ 15
20
Rheem Right At Home magazine connects contractors with customers and prospects.
BBQ 20
Spring is here and it’s time for a little fun. Here’s some ways to enjoy the outdoors.
Gemaire Elite PUBLISHER - William Sabo • DESIGNER - Richard Johnson • STAFF WRITERS - Hollie Deese, David V. King, Beth Burcham ADVISORS - Gemaire, Kristina Poakeart, Wendy Cox, Rafael Castillo, Cindy Metzler All rights reserved. No part of this magazine may be reprinted without the express permission of the publisher. Gemaire 2151 W Hillsboro Blvd. • Deerfield Beach, FL 33442 • (954) 246-2665 Published by: Private Label Media Partners, 709 State Street, New Orleans, LA 70118, 877-618-6626 Copyright © 2013
President’s Message
There’s nothing more important than our relationship with our contractors. Much of my time is spent trying to learn how we can better serve you because your success is our success; it’s just that simple. One of the biggest challenges we face is communicating our outstanding programs and products to all of you. We are constantly updating our product offerings, adding more marketing programs and expanding our other services, but no matter how much we improve, it really doesn’t mean anything if YOU don’t know about it. I hope you’ll enjoy this first issue of Gemaire Elite magazine. Our goal is to create an informative publication that will help better communicate our programs and give you tools that you can use everyday to increase your business. For example, Gemaire G.A.M.E is a newly revamped extranet with all of your co-op and Top Contractor accruals updated in real-time. It is packed full information from all our manufacturers and vendors. G.A.M.E. will be a site that our Elite contractors can use to take more control of their business, without waiting for visits and phone calls from our territory managers. We’ve also provided some stories that will help save money and drive more business. As technology increases, the many services that
were once only affordable to largest contractors are now available for nearly all companies... and at costs they can afford. We’ve leveraged the buying power of Gemaire to give even our smallest vendors discounts on services they need everyday. Whether it’s SEO, Website design, online leads or fleet management, we’ve found some of the best vendors in the industry and negotiated great discounts! But we’re not all work and no play. Check out the interview with Rheem Racing NASCAR driver Kevin Harvick. And now that spring is here, we’ve also included some great outdoor cooking equipment along with great recipes. As the busy season begins to start up, please remember we are here for you.
Ken Connell President, Gemaire Distributing
A G.A.M.E. changer for Gemaire Contractors Rather than relying on territory managers or phone calls to the distributor or manufacturer, Gemaire dealers will have real-time information on everything from marketing programs to co-op accruals and expenditures for each manufacturer. “The extranet is designed for our dealers to access all their information at their fingertips,” said Rafael Castillo, senior divisional marketing manager at Gemaire who heads the project. “We didn’t want to make anything very complicated. We want everyone to take advantage of this tool.” Although G.A.M.E (Gemaire Advanced Marketing Extranet) was originally launched in 2012, the site has been overhauled and improved for 2013. G.A.M.E will be the primary communication tool with dealers and is part of the Gemaire Elite contractors program that is being rolled out in 2013. Communicating with contractors has always been a challenge. Individual territory managers were responsible for distributing information on programs, co-op, enrollment forms and training to each individual dealer. “It was really too much,” Castillo said. “This is a personal support tool that’s updated two times per week. The whole idea is to make it easier to find information, enroll in programs and monitor their purchases and advertising funds.” The territory manager will still be the primary point person, but the flow of information will change. Rather than waiting for a TM to show up and explain the programs and each brand, contractors will be able to access all that information and more from the new site. The driving force behind G.A.M.E. is to have a one-stop site for ALL contractor information. The site will
track co-op accruals, Top Contractor funds, purchases and each specific program offered by each manufacturer. In the past, contractors might have called individual companies to find out specifics on sales and marketing programs. The result was often contractors who did not know all the products and services that Gemaire and the manufacturers had to offer. “All they’ll have to do is click on a box and they’ll get all the information for the program: dates, co-op, guidelines and how to use it,” said Castillo. By near-real-time tracking of co-op, contractors can not only see how much money they’ve accrued, but can predict how much they are likely to accrue in the upcoming months. Castillo said this will allow contractors to create seasonal or annual marketing plans, as opposed to waiting until all their money has accrued and they need to spend it quickly before it expires. “Besides the monitoring tool, G.A.M.E. also will track seasonal promotions and goals. They can tell if they hit their quota, how much they sold, how much is available and how much they’ve accrued. If they have advertising money available, we want them to promote the Rheem brand,” said Castillo. The G.A.M.E. site also can be accessed through tablets. In upcoming months, more content will be added to the site. Castillo said he plans to add a learning center with videos on products, processes and equipment to help contractors sell. The site will be continually updated so contractors can find new information and helpful tools on a regular basis.
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Online
Program participation tab contains list of all available brands and their marketing programs. You can view or enroll in any available program. Email confirmation is sent out after every selection.
View your statements and make payments to your account balances (coming soon) via GAME.
Consumer promotions information is available by each manufacturer . There are also many other tools available to help contractors provide a better service for the homeowners.
For more information contact Gemaire Marketing at 954-246-2665
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Products
Did you know...
Gemaire is stocking: ModPac II (Straight Cool), Classic Heat Pump and ComPac I (Telecom unit with all controls). We support your Marvair Parts needs as well. • More Models – Options – Industry’s Highest Quality • Superior Technical Features • Industry’s Highest Efficiencies • Various Protective Coating Options • Telecom & Heavy Duty Applications • Manufactured In USA For design and specification assistance, contact Frank Suranyi at (352) 266-8050. Email – fsuranyi@gemaire.com or Michael Rogers at (352) 266-3347. Email – mrogers@gemaire.com or call (800) 226-2665.
Rheem SOLUTIONS Rheem has been aggressively pursuing various paths to offer solutions that build confidence in Rheem products. Some of these measures include: 1) Improvements in our manufacturing process since 2011. Production coils since 2011 do not exhibit the susceptibility to formicary corrosion evidenced before. 2) Beginning in early 2013, we will offer tin-plated indoor replacement coils. 3) Rheem is also in the process of designing a new all-aluminum coil. This new design will have several benefits, which include: being physically identical to current production coils in size and efficiency, frontfacing drain connections, mechanical compression fittings on the TXV for ease of service, and reduction in weight for ease of handling and installation. And a big benefit of this all-aluminum design is that it will have excellent protection against formicary corrosion. These coils will be phased in starting fall 2013.
Tin plating provides further protection against formicary erosion
The APCO system (Advanced Photocatalytic Oxidation) represents an entirely new type of air purifier. The combination of germicidal UV light and activated carbon cells inside APCO make it uniquely effective at reducing volatile organic compounds in the air without producing any harmful ozone. VOCs cause odors and include toxic chemical vapors like formaldehyde and toluene. APCO recently won the 2011 AHR Innovation Award in the category of Indoor Air Quality. This is the first time a germicidal UV light product has won this prestigious award.
Rheem announces new Spring promotion From now to June 15, 2013, qualifying systems and individual unit components are eligible for an Instant Rebate up to $1,200, to be received by the homeowner from the Contractor at the time of purchase. Contractors will file for rebate reimbursement at RheemRebate.com. Spring 2013 Consumer CashBack Promotion Materials Include:
• • • • • • • • •
Qualifying Product Matrix Promotion Summary & Highlights Distributor Agreement Form Contractor Enrollment Form Terms & Conditions for Contractors Color Consumer Brochure Color Contractor Flyer Web Banners on Contractor Websites Ad Maker Options via Cool Zone
Your Path to Retail HVAC Profitability
Rheem DesignStar is a proven lead generator
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Rheem
Supporting promotional materials will be available for download on MyRheem.com under “Links” at “CashBack Promotion”. Contractors can use earned accrued co-op dollars to promote and advertise the promotion in their market using ads in which prior approval was obtained. Start enrolling NOW via the G.A.M.E website so you are ready to go! Remember to allow 3-5 days for contractor enrollment to be active on RheemRebate.com. Contractors can take advantage of promoting additional saving opportunities to the consumer by reminding them of available Federal Tax Credits!
Today’s consumers (both residential and commercial) use the Internet to gather information - especially on high-ticket items. Contractors now have an online tool to create a link with those customers looking for a comfort solution. Rheem has about 3,000 contractors using the online tool, said Phil Jeffers, who created and oversees DesignStar. Florida has the heaviest usage with more than 100,000 load calculations logged during 2012, Jeffers said.
latest AHRI data – no knowledge of equipment model numbers required. · A link to dsireusa.org has been provided to determine any utility rebates, tax credits, or programs available in a specific area. · Contractors can sell higher efficiency systems more easily, differentiate their company from competitors in the marketplace. Customized! Easily changed on the fly! Sprocket features offer customers a quick, easy-to-understand tool.
DesignStar: · Produces a professional proposal complete with a customized cover, AHRI certificate and consumer literature in 15 minutes. · Provides an easy method of demonstrating the benefits and savings of purchasing highefficiency systems. System selection is made from the very
Course Instruction: DesignStar’s step-by-step how to manual, will cover the following: · Step-by-step user instructions · DesignStar Sprocket Feature · Search Engine Market (SEM) Each participant will have the ability to print a Certificate of Recognition upon successfully completing each online course.
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Perks
Gemaire Elite A powerful dealer program that can save you money on just about everything Gemaire Elite is separated into several categories:
• Online Resources – G.A.M.E., Gemaire’s communication Website. • The Gemaire Experience – One Stop Shop, Territory manager support, POS rebates, online ordering and more… • Business Support – Training, fleet management, credit card services, telephone on-hold program and more… • Marketing Support – Consumer brand literature, consumer rebates, Right At Home magazine, online lead generation, direct mail and more… • Technical Resources – Tech support, warranty claims, mobile apps and more… • Personal Perks – Cell phone discounts, VIP sporting events, car rental and more...
Want to feel like you own a multi-million dollar company with all the discounts and special programs? With the Gemaire Elite program you can. Marketing support, e-billing, technical resources and even discounts on rental cars, computers and office supplies are just a few of the perks offered under the exclusive program. Gemaire Elite offers products and services from more than 60 approved vendors. “Our contractors get rewards through the Elite program through purchases,” said Kristina Poakeart, marketing manager at Gemaire. “The great thing is that this program gives them the tools that will help them get to the next level.” Looking for more online leads? Gemaire can help. Need a Web package or SEO marketing expertise? They have that. Need event tickets for a client or want to use a VIP lounge in an airport? They can help with that too. “By leveraging the power of Gemaire, we can give small businesses the perks of a big business,” Poakeart said. One important aspect of the Elite program is that all
purchases through Gemaire count toward qualifying. Most Elite perks kick in at $50,000 in purchases. Higher volume contractors can get even more perks as spending increases. The levels, based on TOTAL purchases made through Gemaire from its manufacturers, are: • Silver – $50,000 • Gold - $100,000+ • Platinum - $200,000+ Gemaire Elite dealers also will have access G.A.M.E, Gemaire’s online site that will be the primary communications tool for everything from products to promotion, co-op to load calculations. 2013 enrollment is based on 2012 spending. However, you can still qualify in 2013 with your current year’s purchases. If you haven’t yet qualified and are interested in taking advantage of the Elite program, talk to your TM to learn how Gemaire can help you to reach your business goals.
Need more information? Contact your territory sales manager for more information
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Business
Payment in the field
Why risk credit approval after the job is done? Get paid in real time on the job. e rs lik e m o t d cus e field n a s ha Tech ng” in th th Alo i i w p h i tec “sw Fort n A/C
like a in fong, ditioning customers the l i W n n ck Derri nd Air Co tech and rds while o h a t a g c o n t b Heati dale said sing credi o’s r s e e d c g, wh y u o n r o p La f l f i r ea o said W ars. “It’s ve ” , the id y a 1 ye ng w job. come a lo loha for 1 A ’s “It en to h with es a tec ve tak ith no issu n a e h e s ” b . h w c e s e r t e to u aid the entire d ord easy it car e that the eaves ng s d o e f r l i c W the so lik the tech l ssing ers al proce t custom te before le ha card. and t s is comp n the a c s s d. n and proce me. vice i ay,” he sai o e h d r r i u w o the take ght a “We pproval ri et a We g You’ve seen them, those little card readers attached to a smart phone. Street vendors, flea market booths and even food trucks routinely use the readers to accept credit cards anytime and from any where. future marketing,”Garboski said. So why aren’t more HVAC dealers adopting this simple, In today's world of email scams, identity theft safe and cost effective technology? and fraudulent credit card purchases, Graboski said more “It’s an education process about what can be done to consumers are becoming uneasy giving out their credit streamline the whole sales process,” said Dave Garboski, card number, knowing it will be written down and likely president of CellCharge Inc. a California-based company. passed to several people in the office. CellCharge give This particular program only works on smart phones, tabs contractors the advantage of telling customers that they and iPads. They do have a computer based program as are making a secure transactions with virtually no risk of the well as traditional terminals and basic touch-tone service. credit card number being stolen. CellCharge also can record Most contractors either write down the credit card cash and check transactions. information and input it at the office or read the information 1. There are two programs based on monthly volume. over the phone to someone in the office and waits for This, and other information, can be accessed at the them to manually input the information. CellCharge.com/gemaire. With a credit card reader, the tech uses a simple menu2. Setting up the service is pretty simple. driven screen and swipes the card. Instantly, the tech 3. A contractor logs onto CellCharge.com/Gemaire and knows if the payment is accepted and an email receipt is inputs their basic information. sent to the customer. 4. 2-3 hours later the contractor is approved. “The advantage of getting payment in the field is 5. An email is sent with the secure log in information. two-fold: the payment is instantly processed and the 6. Download the App onto your device A swipe terminal contractor captures the customer’s email address for will be delivered in a few days.
For more information Contact CellCharge at 866-735-5292
GPS Fleet Management
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Tech
More calls, less gas, better maintenance ...and more profits
GPS tracking at the office allows companies to increase fleet customer efficiency, save on fuel costs and reduce downtime Fleet management isn’t about Big Brother watching to see if employees are goofing off. The new wave of GPS tracking is about being smart, efficient and saving money with the help of technology. Today’s GPS fleet tracking technology combines the powerful features and cost efficiencies of Global Positioning Systems (GPS) and web-based technology. “A few years ago, the perception was that only large HVAC companies could afford GPS fleet tracking. But, as with many things, technology has driven the price down to where a smaller company with only a few trucks will benefit from GPS fleet tracking,” said Andrew Chermark, VP of sales for Smart Fleet. “In the sun belt, during the summer, these guys’ phones are ringing off the hook,” said Chermark. “The challenge is during the busier times of the year, when they’re overwhelmed, to have the tools that will help them respond quicker and more efficiently meet the demands of their customers.” GPS fleet tracking allows small business owners and managers to track their trucks in real time, increase employee productivity, detect and eliminate waste and fraud, while providing better customer service. GPS Fleet Tracking allows businesses to improve worker performance and productivity by tracking start/stop times, view driver routes and receive time stamps for entering or exiting a job site.
•Identify and correct driver behaviors that can cost your business, such as speeding, excessive idling, routing and scheduling conflicts, travel outside of authorized areas, unauthorized use of your vehicles and escalating labor costs. • Ensure accurate time reporting for billing, payroll and ongoing service contract analysis. • Notify you when your trucks need maintenance, such as oil changes. • Receive “real-time” email or text message alerts for a number of exceptions usually established by the owner…such as speeding, odd hours and idle time. • Improve safety, reduce risk and lower insurance costs. Although business efficiency is the major goal of GPS tracking, Chermark said it is often used for monitoring employees, especially after work and on weekends. “Let’s say you hire a new person,” Chermark said. “They’ve got a $20,000 truck with $10,000 in equipment, you can see where he’s taking it and if he’s moonlighting with your vehicle or doing something else he shouldn’t.” The device is so simple that in most cases, contractors can install the GPS box themselves, but on-site installation is available. Once the device is installed, companies can be up and running in fewer 10 minutes.
Call 888-263-4047 or email sales@smartfleetus.com for more information.
10 Tech
What’s an app? A web application is accessed via a web browser over a network such as the Internet or an intranet. Common web applications include web mail, online retail sales, online auctions, wikis and many other functions. Basically, it means that apps work with a browser and are not really “downloaded” to your computer. They link to powerful servers and software, so they are constantly updated and changed without the need for the user
changing software. There are literally apps for everything! Games, business, books, killing time, tracking your health. As an indication, Apple has more than 1,000,000 apps available for the iPhone and iPads. Android are also rapidly growing. In many cases you don’t need to buy apps to see if you like them. Developers often launch a “lite” version that is free, but has most of the app’s capabilities. Other
developers offer 30-day trials. Apps for HVAC can do just about anything you need and most are a one-time charge of $5 to $10. To find apps for your business, just log into the App Store on your phone or ipad. Search for HVAC and a ton of apps will pop up.
5 apps you shouldn’t be without According to Arzel Zoning’s blog “Zoning In” there are five apps that HVAC contractors should not be without:
values. It is available in both Apple and Android platforms.
instructions. Available for both Apple and Android platforms.
HVAC Buddy Load Calc With apps for both Apple and Android, HVAC Buddy Load Calc helps sales people and technicians in the field ensure more accurate sizing of equipment and generates project reports.
Genteq Energy Savings Calculator Available for both Apple and Android, you can use the comparison tool to show annual energy use and cost of a wide range of heating and cooling systems. It shows you how quickly a new system will pay for itself in lower energy costs.
HVAC Duct Sizer This app was voted favorite mobile app by readers of Contracting Business and performs simple duct sizing along with a range of duct sizes by specifying minimum and maximum friction loss and airflow
WRMobile This app from White-Rodgers provided field access to product replacement information along with access to product wiring diagrams, sell sheets and installation and operating
SlideShark Available only for the iPad, this app displays PowerPoint presentations with animations, fonts, colors and high-definition graphics. This award-winning app is easy to use as it can open files from cloud storage sites like Dropbox and allows you to download presentations without needing access to the internet. A great presentation tool for in-home sales calls. For more information go to www.arzelzoning.com look for the blog tab on top.
Download the Gemaire Mobile App! Scan the QR code (below) with your smart phone for your device to download.
GEMAIRE strives to make life as an HVAC professional easier and faster. The HVAC Contractor Assist provides access to product information and easy to use tools while on the go. Apple/iPhone
Android
12 Rheem &
Marketing
Branding at 200 mph
T
his year marks the seventh consecutive year of NASCAR sponsorship for Rheem Manufacturing Company. The company’s sponsorship started with a bang on February 18, 2007, when driver Kevin Harvick scored the Daytona 500’s closest finish ever by inching out Mark Martin by 0.020 seconds. Since then, Rheem has been an increasingly visible brand within NASCAR and has become the most recognized heating, cooling and water heating name among NASCAR’s 90 million fans in the US, Canada and Mexico. In 2013, Rheem is again the proud sponsor of Richard Childress Racing’s No. 29 Sprint Cup car and driver, Kevin Harvick and RCR’s No. 33 Nationwide Series car driven by Paul Menard. New to the 2013 Rheem line up is Turner Scott Motorsports No. 31 which will compete in the NASCAR Camping World Truck Series with 2012 series champion, James Buescher at the wheel.
as its reputation for high quality, dependable products and service would be the bedrock on which future success in the dynamic new marketplace would be based. One goal was to increase twoway communications with Rheem distribution partners to ensure productive information exchange, continuity of purpose and coordination of actions. Another goal was to increase recognizing and rewarding partner growth and performance as well as stepping up new business development activities. And, a renewed importance on brand building was launched to ensure that when contractors recommended Rheem brands to home and business owners, the market would recognize them as innovative, reliable, top performers that provide long-term
So, how did this all happen and why is it important to you? Some time ago, Rheem recognized that home and business owners and those who serve them were changing. The company understood that these changes required new thinking, innovative technologies, unique ways of serving customers and new approaches to selling and marketing its products and services. Rheem decided that its track record of financial strength, close partnering with distributors and contractors as well
22-year-old James Buescher drives the #31 for car Rheem in the NASCAR Camping World Truck Series. He is from Plano, TX.
Since its inception, the Rheem Racing program has hosted over 10,000 Rheem contractors and new business prospects at more than 150 NASCAR events nationwide. Relationships have been strengthened and new ones created at these events. value. The Rheem NASCAR sponsorship program plays an important part in achieving these goals. For instance, since its inception, the Rheem Racing program has hosted more than 10,000 Rheem contractors and new business prospects at more than 150 NASCAR events nationwide. Relationships have been strengthened and new ones created at these events. At the same time, Rheem hospitality events have set a new standard of excellence among NASCAR sponsors. Rheem Racing VIP guests experience a unique excitementfilled day of memory-making glitz, glamour and bone-jarring competition. Experiences like meeting team owners, drivers, celebrities, pre-race garage tours, walking on the race track, getting autographs and photos with drivers and watching the crew on pit lane are only a part of the Rheem Racing VIP Experience. Nothing says, “Thanks for the Business” quite like a day at the races with Rheem. NASCAR by the numbers 75% of NASCAR fans own homes 56% earn above $50,000 annually 20% earn $100,000 or more 40% of NASCAR fans are women Those Rheem branded race cars and trucks, drivers, crew, owners and at-track signage all play a role in developing the Rheem brand to a very target rich audience. NASCAR is the number two regular season sport on television. Excluding the NFL, NASCAR has more weekends as the number one or two sport than any other on TV. And, it outperforms 80% of prime time television and all late night comedy
shows. Every week for ten months each year, Rheem brands are highly visible to millions watching nationwide television race broadcasts along with millions more listening on satellite radio and streaming on the internet. For instance, six million people access NASCAR. com each month and hundreds of thousands of racing-related social media posts occur weekly. Broadcast, print, and social media publish millions of NASCAR-related news stories, many accompanied by photos, audio and video clips and recorded interviews resulting in hundreds of millions of Rheem brand impressions reaching consumers each year that are equal to tens of millions of dollars in brand advertising to Rheem and Rheem contractors. The multimillion NASCAR fan base everywhere now knows who Rheem is and respects Rheem’s leadership position in the sport. Every week Rheem receives thanks from fans for sponsoring their favorite sport and they show their support by favoring Rheem products when it’s time to buy. 60% of racing fans prefer to buy products of NASCAR sponsors. The prominent Rheem presence in racing keeps the brand in
consumers’ minds so that when it comes time to buy, they think of and ask for Rheem. And, the NASCAR season is a nearly perfect overlay with heating, cooling and water heating seasonal buying cycles, so Rheem is top of mind just at the right time all the time. This is important since nearly 75% of NASCAR fans own homes while 56% earn above $50,000 annually and another 20% earn $100,000 or more. Equally important to Rheem contractors and plumbers is that 40% of NASCAR fans are women who are among the most loyal to NASCAR sponsors’ brands and who are the primary buying influence when selecting HVAC and water heater brands in most US households. Rheem has many effective marketing programs to support contractors and grow brand familiarity and the NASCAR racing program continues to be one of the strongest, most welltargeted components in the marketing program basket.
NASCAR is the number two regular season sport on television, behind the NFL
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Marketing Jump start your sales! How would you like your company featured on the front and back covers of a magazine like Better Homes & Gardens or Martha Stewart Living? Well, now you can. Rheem Right At Home targets the same readers: women in the home. Why? Because women are responsible for 83% of all household decisions, including HVAC appointments, repair and replacement. How are you reaching them? Your 16-page, full-color and customized magazine is available in print, online and e-newsletter format. You can mail and hand out the print edition while embedding your custom e-magazine directly into your website, emails and e-newsletters. Hundreds of Rheem contractors have used this powerful marketing tool since 2007. Make your business stand out. Nothing is read more or stays in the home longer than Rheem Right At Home. It also qualifies for Top Contractor and co-op funds.
We createGemaire Elite magazine. Gemaire knows a custom magazine is one of the most powerful ways to deliver information to customers.
A new issue of Rheem Right At Home is available each spring and fall to help with your local marketing. Sign up now for the spring/summer issue: www.RheemMagazine.com Email - bsabo@RheemMagazine.com Or call Bill at 877-618-6626
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Business
Still billing by the hour? Expert says you’re probably losing money if you’re not doing flatrate billing for service By Bill Ligon HVAC Consultant From my experience, both as a contractor and as a consultant, it is my opinion that 90% of us are losing money in our service departments. This conclusion is shared by every other consultant I have ever spoken with. The good news is this. It doesn’t have to be that way! HVAC contractors are smart, intelligent, dedicated and give great service to their customers. The question arises, if we are all of the above, why would we be losing money? The answer is, we are simply uninformed about the financial side of our businesses. And because of our lack of understanding about the financial side of our business, we lack the training to departmentalize our companies. Most of us have heard that the overhead in the service department is very high (it could be as low as 40% or as high as 60%). Because we don’t know the numbers in our company, we find it hard to believe that we are losing money in service. In fact, most contractors don’t believe they are! They may say, “How can I be losing money, when I pay my tech $15.00 per hour and sell his labor for $50 an hour?” or “I paid $40 for the part and I sold it for $140, how can I be losing money? There is no way that I’m losing money!” The only way to find out your numbers or overhead is to departmentalize your profit and loss statement. When you do, you most likely will come to the realization that you must raise your labor rates. If you must raise your price in your service department and if you are a time and material service contractor, you have a serious problem! Your customer will most likely fire you! No way that Mrs. Jones is going to pay you the $X per hour you just found out you need to charge her. Bottom line is this: Flat rate pricing is the only way to raise your price and not be fired! Here are a couple of other things to think about: 1. I can’t think of a single contractor who was or is presently
making serious money, who does not use flat rate pricing in their service departments. Not even one! 2. From my experience in this industry, 100% of all those contractors who are making serious money, 10% to 20% of gross sales, all use flat rate pricing in their service department. 3. All of the contractor service groups such as ISL, Airtime 500, and Air Serve, EAI and many others, without exception, recommend their members use flat rate pricing. Folks, there may be a message here. 4. Can you think of any industry except HVAC, plumbing and electrical, that uses time and material pricing? No, I can’t either. 5. I always ask flat rate contractors in my workshops if they would go back to time and material pricing? Not one has said they would. There is probably a message there somewhere. Am I overcharging my customer? It really doesn’t matter what the selling price is, what matters is what the selling price must be to cover your overhead and render you a decent profit. After all we are not like attorneys and doctors: we are not practicing service. We must charge, what we must charge! Period. One thing for sure, flat rate pricing is not an excuse to overcharge! OK, let’s admit that some contractors, when they realize how well it works and how easy it is to implement, have been guilty of overcharging. In some instances, flat rate has gotten a bum rap because of excessive pricing. My advice to you is: find out your cost of overhead and decide what you feel is a fair profit to compensate you for the risk and to provide capital to grow your company. That is a decision only you can make. Will my customers like flat rate? Here is an example of some numbers you should know about your service department: Total Annual Sales In Service Total Gross Margin Overhead in Service Dept. (est.) Profit/Loss in Department
$260,000 100% $130,000 50% $150,000 57% ($20,000) (7.7%)
If you take your car to the dealer to be repaired, don’t you like to know the repair price before the work begins? Absolutely. If you take your spouse out to your favorite eating place, don’t you like to know the price before you order? Sure you do. Would you hire a painter to paint your house and not know the price? Probably not. Do you want a price from the dentist before he puts in those crowns? I imagine you do. How many hotels do you check into without knowing the price per night?
What if my technicians resist the concept? We worry as contractors about what our technicians will think about this new way of pricing. After all they don’t like to change either. Keep this in mind: For the typical technician, a perfect day is one where no one is home, key is under the mat, he works all day and doesn’t have to talk with anyone. Our technician is worried that he may be forced to actually talk with the customer, explain things and talk about prices, etc. On top of that, he already thinks you are stinking rich! He thinks “this is just another way for the boss to get even richer. Sounds to me like a fancy way to take advantage of our customers.” They are good at what they do, but uninformed about the problems you face. Sounds like some of us owners. You may think that you can educate the technician about how high the overhead is in service. I remember trying to do that, it is a message you will never get across. What are the odds the technician will understand the high overhead in service when we the owners, don’t know about overhead either! To get your technicians on board, just announce to them that this is way you are going to do it. No discussion. Tell them you are going to train them in the use of the new pricing books. Tell them that the dispatcher will explain to the customer about the diagnostic or show up charge. No customer must have the repair made. The customer will always be in control. Tell them that their job is not to sell repairs but to give the customer options and let the customer make the decision to do the repair or not do the repair. It is a rare customer that shops around for a lower fan motor replacement price. Point out to them they will no longer be under the pressure of how fast they work, no longer will they have to take the heat from a customer who is unpleasantly surprised at the big repair price. No longer will they have an owner with a stopwatch observing their every action. No pressure, no pressure, no pressure. Since I first started using flat rate pricing (1991), I cannot think of a single technician who has used flat rate pricing books, that would prefer to go back to the time and material method. No math, no taxes and almost no writing. No pressure!
Not many I bet. Time and material contractors do this to their customers day after day. Your customers don’t like it and when the shoe is on the other foot, neither do we! Give your customer the price for the repair before the work is done. The customer wants to know exactly what it costs. Give the customer their options and let them be in control of the entire repair process. Customer complaints about how fast your technician worked, when he got there or when he left will virtually go away. The customer doesn’t care. The price is agreed to before the work is done. When was the last time you got a complaint about a condensing unit price after the work was done?
Using the flat rate books The proper use of the book itself is very important. Train your technicians to use the book. I recommend a weekly meeting and role playing. The service manager or owner comes up with some sample repairs and have the technicians find them in the book. One owner created a competition between the techs as to who could find the correct task in the shortest time. Sounds like a good idea. Probably the biggest mistake that technicians make is leaving the book in the truck. Why is that such a big deal.?There is something powerful about the printed price. It says to that customer, “I’m getting the same price as everyone else. It’s the same price no matter if I drive a Mercedes or an old pickup truck.” Does the customer always like the price? Of course not, but your prices are the same to everyone. And oh yes, you can blame the book for that price! Email: ligonair@suddenlink.net or check out www.ligonconsulting.com
Marketing Integration
19 Tech
Reaching customers wherever they are
John McMillan, owner of Hearth & Home Heating and Cooling in Melbourne, Fla. didn’t have time to integrate all of his marketing programs, especially his online efforts. “So many people today shop online for their air conditioning,” McMillan said. “Especially young people who are under 40.” A year ago, McMillan decided to hire Red Spot Interactive to coordinate all of his marketing. Red Spot revamped his website, creating an ongoing SEO search engine optimization) program, launched a retention program and even takes phone calls from customers during business hours and schedules sales and service calls. “I think it’s inevitable that
everyone’s going to go to this type of marketing program at some time,” McMillan said. Red Spot Interactive, based in Jupiter, Fla. is part of the Gemaire Elite vendor program. In a way, Red Spot works like an ad agency, designing electronic marketing, evaluating print buys and continually updating SEO key words that drive search engine’s to the client’s site, said president and cofounder Jason Tuschman. “They (HVAC companies) need help with the technology and the tracking,” Tuschman said. The company breaks its services into three main areas: • Targeted marketing – By using geographic,demographic,clienthistory and SEO, Red Spots says it can drive
leadsbycreatingintegratedmarketing programsthattargetthebestprospects in several ways. • Customer acquisition – The company manages sales leads through email, telephone, email and contact management. • Performance reporting – Red Spot tracks ROI of each advertising program. Tuschman said there is a questionnaire that clients complete that help create a strategy for the overall program. The cost depends on the size and services or the individual dealer, but Tuschman said a “light” version of the program is in the works that will reduce the costs by limiting some of the highpriced services.
20 Family
Outdoor cooking takes on many flavors by Hollie Deese Outdoor cooking connoisseurs know that the taste of the food depends on the tool, and there are more ways than ever to cook a piece of meat. And because it all boils down to personal preference, John Smith with Nashville Fireplace and Grills suggests people do their research a bit before investing in a grill. Charcoal Charcoal grills start out for as little as $20 and go as high as $500 or more for deluxe models, which makes them very accessible for any price point. And if you ask any charcoal fan, you just can’t beat the flavor, especially when you toss in some flavored wood chips. “People will cook with gas on a weeknight when they get home from work and want to cook something in 15 minutes, then on the weekend they tend to use the charcoal because the flavor is better,” Smith says. “They have more time to devote to it.” Gas According to the Hearth, Patio and Barbecue Association grills are generally priced from just over $100 to $299; and in fact, 80 percent of all grills sold are priced under $300. Top-of-the-line stainless steel models with lots of features can go as high as $5,000 to $10,000 but may be worth it if you cook year round and are
ready for an upgrade. “Everything is going stainless steel, and everyone is going for higher quality so they don’t have to do as much service work,” Smith says. “And the quality is just getting a little bit better each time.” He warns consumers that while incredibly convenient, the chemicals released with gas grills will affect the flavor of the food. Electric The HPBA prices these grills at around $50 for small units up to $2,000 or more for larger, highend stainless steel models. Newer models even incorporate infrared cooking to lock in juices. “These grills are insulated better now than they used to be,” Smith says. “They maintain temperature a little better now and they don’t have hot spots and cold spots as much as the old ones do. They tend to be more consistent.” Smokers One accessory gaining in popularity big time, especially in warmer states, are backyard
smokers. The HPBA recommends water smokers for beginners because they’re affordable and easy to use. Charcoal is the favorite, but electric and gas are very convenient because they maintain a consistent temperature. “People choose smokers for low temperature cooking, for cooking barbecue pork or brisket or something like that,” Smith says. Water smokers start at about $40 and can go as high as $200 or more for a stainless steel version, but can be $1,000 or more for a built in along with a grill. Pellet The grills that accommodate wood pellets are also seeing higher sales as people look for alternatives to using chemicals in their cooking. Prices generally range from $600$2,500. “I think if most people had they choice they would tend to go with a wood grill,” Smith says. “If you cook with chemicals you can taste the chemicals, so we recommend you try and cook as natural as you can, whether it be wood or chemical-free charcoal.”
Get Your Grill On No grilled salads or quiche here. Real meat and potatoes! Beef Rack of Ribs
Serves: 4 to 6
Salt (to taste) 1 tablespoon black pepper (to taste) 1 tablespoon seasoned garlic salt (to taste) Cayenne pepper (optional) 1 to 2 racks of beef ribs (number of racks based on number of people) 1 tablespoon yellow mustard 1/3 cup brown sugar One bottle of favorite barbecue sauce
is slightly browned and caramelized. Remove ribs from grill and slice with sharp knife. Place individual ribs in a crock pot on low. Add one bottle of your favorite barbecue sauce. Let simmer 6 to 8 hours.
The night before serving, prepare rub for beef ribs (salt, pepper, seasoned garlic salt and optional cayenne pepper). Sprinkle both sides of ribs and then rub vigorously. Wrap in plastic wrap and refrigerate overnight. In the morning, place on medium temperature grill and spread yellow mustard and brown sugar on each side of the ribs. Grill for 5 to 8 minutes until each side
Country Barbecue Potatoes Serves: 4 to 6
2 pounds small red potatoes 2 tablespoons butter, melted 1 teaspoon honey 3 teaspoons seasoned salt 1/2 teaspoon salt 1/4 teaspoon garlic powder 1/4 teaspoon pepper
Preheat oven to 4500F. Coat 9 x 13 baking pan with nonstick spray. Cut potatoes into small to medium-sized pieces and put in pan. Melt butter and honey, and then drizzle over potatoes. Sprinkle with seasoned salt, salt, garlic powder and pepper. Toss well to coat.
Bake, uncovered, for 25 to 30 minutes, or until potatoes are tender and golden brown. Stir potatoes at least once.
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