June 2009 by Ron Smith

How to Provide Leadership and Direct Your Company in a Challenging Economy
Part 2 of 3

This is an excerpt of the curriculum that Ron teaches
in the recently-announced one-day workshop,
How to Thrive in a Challenging Economy, co-taught with Tom Piscitelli.

Your objective should be to create a “lean machine” that is totally customer-focused and marketing-driven.

Your company can come out of an economic downturn better positioned and stronger that when it came into it.

April 2009 by Ron Smith

How to Provide Leadership and Direct Your Company in a Challenging Economy
Part 1 of 3

This is an excerpt of the curriculum that Ron teaches in the recently-announced one-day workshop, How to Thrive in a Challenging Economy, co-taught with Tom Piscitelli.

Your objective should be to create a “lean machine” that is totally customer-focused and marketing-driven.

Your company can come out of an economic downturn better positioned and stronger that when it came into it.

March 2009 by Ron Smith

Sound Business Principles: Is It DK or DE?

(These notes are taken from How to Thrive in a Challenging Economy, a NEW
one-day seminar delivered by Ron Smith and Tom Piscitelli)

There are only two reasons companies are not highly successful:

1. It is a Deficiency in Knowledge

1. Create and share your company vision, mission, goals, strategies and plans.

2. Give everyone feedback on their performance and coach them so they can be successful.

2. A Deficiency in Execution.

1. Create written job descriptions and train everyone to do their job the right way.

2. Provide performance feedback in a supportive way. Treat everyone as a potential “winner”.

A coworker leadership principle:
Thinking leads to involvement. Involvement leads to commitment.

A coworker leadership principle:
The things owners and leaders talk about, how they think, how they look and how they present themselves reflect in how other coworkers are influenced. Consequently the owners’ and leaders’ behaviors indirectly but significantly influence the coworkers’ actions.

How to motivate and inspire coworkers:

1. Recognition

2. Spiffs/commissions

3. Self esteem

4. Career growth

5. Working for a good company

An organization is a group of people who have come together with a common belief, goal or mission.

HVAC Spells Wealth: You Deserve a 25% Net Profit

by Ron Smith

 How to Build and Manage a Highly Successful HVAC Residential Retail Business and Dominate Your Market  

(Note from Tom: If you don’t know who Ron is then let me just say that he’s the guru’s guru in our industry. He’s tried it all and done it all, sometimes with great success, and sometimes not. He candidly shares his lessons-learned with all of us so we can save time, save money, save effort, save stress…and prosper! Here are just a few excerpts from his book. Buy this book, read it, and apply it NOW at www.ronsmithhvac.com. Send him as much money as he wants…it’s worth 1000 times any purchase price.

Chapter 1: Business Is Not Complicated

Your HVAC residential retail company is entitled to a 25% net profit. An owner can become wealthy. Company leaders and all of the coworkers can share in the success and in the rewards. Furthermore, you can all have fun doing it.

Ron’s business, Modern Air in Ft. Myers, Fl, became the dominant HVAC contractor in that market…and had the highest prices. They accomplished this by “earning it”; they had clean and attractive trucks, they did a lot of advertising, they were open until 7:00 PM M-F and 7:00 AM – 1:00 PM on Saturday. Their technicians and installers were all trained in customer service and had to meet personal dress and grooming standards. And they were good community citizens…giving back to the community that supported them.

Keep It Simple

Here are some of Ron’s guiding principles:

• Stay focused on business fundamentals
   

• If you hire mediocre people you’ll have a mediocre company
   

• Training is management’s greatest responsibility
   

• You are not limited by time; you are only limited by what you want to do
   

• Owning and managing a business is a game
   

• Your coworkers are your “inside” customers
   

• Extraordinary people are often ordinary people with extraordinary determination
   

• Market your company, not your products
   

• When the rate of change outside your company exceeds the rate of change inside your company, the end is in sight
   

• Set goals for yourself and your business
   

• Work on doing all things in your business 1% better (Watch for more 1%’ers in future articles)

Ron has a message for all readers: You had better be committed if you want to be successful.

Next month: Chapter 2: The Three C’s: The Three Important Entities That Make Up a Company


Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.

   July 2007 issue

Chapter 2: The Three C's: The Three Important Entities That Make Up a Company

Growing your company means the owner(s) have to be willing to let go of some of the day-to-day tasks they have been doing, and may even like to do, so that they can focus on other important matters. There are three important groups:

1. Customers

2. Coworkers

3. Company

It’s the owners/manager’s primary job to facilitate the relationship among these groups.

Customers come first because without customers there is no business. Everyone knows this but it’s surprising to see so many companies where customers are treated shabbily. When this happens, either the owner doesn’t care, or the coworkers don’t understand the value of every single customer, or the coworkers aren’t properly trained.

Training is management’s most important responsibility. Some owners don’t want to invest in training out of fear that the employee might leave. The bigger truth is that the best potential coworkers will come to your company once they learn that you provide consistent, quality training programs.

Research suggests that less than 35% of Coworkers enjoy their jobs. There is a very high turnover rate in our industry. The reasons for this include:

• Hiring too quickly without proper research
  
  
• Generally only hiring white males
  
  
• Not paying properly
  
  
• Not providing proper training
  
  
• Not keeping coworkers informed
  
  
• Not providing adequate rewards

The Company will be successful when the owner properly addresses all of the needs of the Customer and Coworker. The success will continue when important decisions are made with due consideration given to what’s best for the Customer and Coworker first.

The next three chapters will go into more detail on each of these groups.

Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.

   July 2007 issue

Chapter 2: Customers: Your Most Important Asset Is Not the Balance Sheet

Customers are so valuable they should be identified as assets on your company’s balance sheet.

Most companies don’t know how many customers they have. As a rule of thumb, if you company hasn’t done business with the homeowner in the past three years, they are probably someone else’s customer by now. With proper marketing and customer service every customer is worth $750 per year. How would you feel if one of your coworkers threw away $750 in materials? Not working to keep customers is the same thing as throwing them away.

You have 4 basic customer types:

1. Customers who own one of your Precision Tune-Up agreements and you provided maintenance for them in the past year.
    

2. Customers who don’t own a PTU agreement but you did some kind of work for them in the past two years.
    

3. Customers who don’t own a PTU agreement but you did some kind of work for them in the past three-five years.
    

4. Customers who don’t own a PTU agreement and you have done no work for them in the past 5 years.

Everyone else is a non-customer.

Your targeted marketing plan will address each of the 4 groups separately and appropriately. This strategy is discussed in Chapters 6 Marketing and 7 Sales in Ron’s book.

There are 4 customer expectations that have to be met in order to keep their business. They are:

1. On Time Delivery: Show up when you said.
    

2. Quality Work: Doing what is promised.
    

3. Ethical Corporate Behavior: Communicating clearly verbally and in writing, respectful of customers and their home, having competent company employees and clear and fair pricing.
    

4. Convenient To Do Business With: Hours of operation, financing, communications must be equal to the best “retailers”.

Customer care is critical. Company coworkers must be hired and trained to recognize and deliver this. When a customer is disappointed or angry the problem can be quickly and appropriately addressed, turning an angry customer into one who will boast about you to their friends and acquaintances.

It’s important to create “More Than Satisfied” customers. They will continue to buy from you, and tell others of their happy experience. Delivering on this isn’t hard or expensive; it comes from the simple things like a service technician offering to replace a light bulb or smoke detector battery, or help getting Christmas decorations out of storage. Involve coworkers in brainstorming sessions on how to exceed customers’ expectations…and have fun doing it.

Next Month, Chapter 4: Coworkers: "Your Internal Customers”

Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.

   September 2007 issue

Chapter 4: Coworkers: Your Internal Customers

Ron was very successful hiring highly-qualified people from outside of the HVAC industry. Part of the reason for this success was that everyone received extensive training in customer relations and they understood their role in providing this as well as the day-to-day duties of their jobs.

He made it a practice to hire from outside the industry. By doing this, you get these important advantages:

• You increase your candidates
  
  
• Those you hire have no “bad habits” from prior HVAC experiences
  
  
• They bring ideas from other industries with them

There are six areas that must be addressed to properly staff a company:

1. Recruiting

Hire the best individual you can. Newspaper ads can work (see examples in Ron’s book). Encourage and reward your coworkers to recruit for new job openings. Support your local vocational school and pick from the best graduates. Retired military personnel are highly trained and qualified. Look for candidates in other trades. Advertise in out of town publications, the internet, trade journals, supply houses, attend job fairs and put signs on your company trucks.

2. Hiring

Look at hiring as if you were selling to your customers. That means being prepared and following a three-meeting guideline: First, have a get-acquainted meeting in a neutral place, such as a restaurant, where you can chat. No interview, no application yet. Next have an interview meeting where you sell your company and have the candidate complete the employment application. Consider using a tool such as DiSC® Behavior Profiling or similar. Later, do a background screening and vehicle driving report (must have permission to do these).

3. Mutual Hiring Decision

If everything is on track, the third meeting is where you make your offer. Your evaluations will create some questions to ask and you will want to probe deeper around how they might respond to certain business situations they are likely to encounter. Be prepared to discuss compensation, new-hire orientation, future training and the “orientation period”.

4. Training

Your business plan should include 80 hours minimum annual training per coworker. Someone must be put in charge of a company-wide training program. The training director is responsible or creating appropriate curriculums, acquiring the best trainers, directing the trainers to accomplish company goals, managing a training budget and a lot more. Training is done on company time and is mandatory. General topics include technical, customer relations and systems and processes.

5. Motivation

Inspiring people to take appropriate action comes naturally so some leaders/managers but most of us are not naturally blessed with this talent. Look for this capability in the managers you hire. The motivated individual will respond to many rewards for excellent behavior and performance such as recognition, compensation, career growth, being part of a good company and self esteem.

6. Retention

The hiring process and the total compensation you pay your coworkers add up to a lot of money. It’s critical that you have a low turnover rate and this rate should be monitored and managed quarterly.


Next Month, Chapter 5: Company: Is yours really an organization.


(Note from Tom: If you don’t know who Ron is then let me just say that he’s the guru’s guru in our industry. He’s tried it all and done it all, sometimes with great success, and sometimes not. He has candidly shares his lessons-learned with all of us so we can save time, save money, save effort, save stress…and prosper! Here are just a few excerpts from his book. Buy this book, read it, and apply it NOW at www.ronsmithhvac.com. Send him as much money as he wants…it’s worth 1000 times any purchase price.


Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.

   November 2007 issue

Chapter 4: The Company: Is Yours an Organization?

An organization is a group of people who have a common purpose, goal and/or belief. The company needs to determine and develop that common purpose. At Modern Air, the company purpose was, “Get and keep customers.” Here’s why this is so important.

HVAC retail companies provide two fundamental services to the homeowners, keeping them comfortable and saving them money. Once coworkers understand the company’s purpose and what the primary company services are, it then becomes simple to make decisions on what new products and services should be added as the company grows.

Modern Air started out in the residential new construction business (write Ron and ask him what it’s like to install ductwork in a 2 ½ foot high attic) and later got into commercial HVAC and plumbing. Those experiences taught him that the retail, homeowner market was where the profits were and over time that became the primary part of his business.

Each coworker must understand that the homeowner/consumer has high expectations around customer service. It follows that the coworker must be hired with the necessary personal attributes that are needed to provide great service and that the company must continually train them to consistently be the best-in-class at this.

There are time-tested benchmarks of success, called Key Performance Indicators (KPI’s) that should be achieved (see page 99) including these gross profit margins:

• Residential demand service 60-65%
  
• Residential service agreements 55-60%
  
• Residential equipment replacements 40-45%
• System enhancements / IAQ 50-55%
  
• Total Gross Profit Margin 40-50%
  
• Operating Expenses (Overhead) 25-30%
  
• Net Profit Margin 15-20%

Also there are KPI’s that help you measure your efficiency and effectiveness in other areas:

• Annual revenue per coworker (all) $130,000
• Residential service agreements 1,200 per $1M in revenues
  
• Residential equipment cost 25-30% of revenues
  
• Residential labor cost 7-9% of revenues

If your company is performing at these benchmarks…congratulations! If not, the good news is that you can get there.

Next month: More on the importance of creating an organization where everyone understands their part in the company’s success, and how they are recognized and rewarded for their contributions.


(Note from Tom: If you don’t know who Ron is then let me just say that he’s the guru’s guru in our industry. He’s tried it all and done it all, sometimes with great success, and sometimes not. He has candidly shares his lessons-learned with all of us so we can save time, save money, save effort, save stress…and prosper! Here are just a few excerpts from his book. Buy this book, read it, and apply it NOW at www.ronsmithhvac.com. Send him as much money as he wants…it’s worth 1000 times any purchase price.


Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.

   January 2008 issue

Chapter 6: Marketing Part 1
by Ron Smith

1. Determine three geographical marketing areas

a. Your dominant area where you will be proactive
b. Your response area where you will be reactive
c. Your no service area where you will not go

2. Calculate an estimate of the total annual residential retail revenues in your selected marketing area

a. You will be surprised how much potential exists in your dominant area
b. 15% market share is achievable
c. You can continue to grow past 15% market share in your dominant area by adding complimentary products and services

3. Separate your present customers into groups

a. First are those customers who own a service agreement
b. Then those who do not own a service agreement but have had work done in the past two years
c. Ditto in the past 3-5 years
d. Ditto beyond 5 years

4. Determine your portfolio of products and services

a. Customer #1: Replacement equipment and enhancements
b. Precision Tune-ups to Service Agreements to Replacement/Enhancement sales
c. Precision Tune-ups to Service Agreements for general marketing promotions
d. New customers via a PTU/SA strategy

5. Determine an annual retail revenues marketing budget

a. 6-9% of your sales plan…this includes your manufacturer’s co-op funds

6. Complete a 12-month marketing plan calendar

a. Create a 12 month, 52 week calendar (spreadsheet)
b. List your revenue producing products and services i.e., Demand Service, Replacements, PTU’s, Service Agreements, Enhancements and mark those weeks when your marketing effort/program will be implemented

7. Understand basic marketing principles and methods

a. Next Month’s Topic!

(Note from Tom: If you don’t know who Ron is then let me just say that he’s the guru’s guru in our industry. He’s tried it all and done it all, sometimes with great success, and sometimes not. He has candidly shares his lessons-learned with all of us so we can save time, save money, save effort, save stress…and prosper! Here are just a few excerpts from his book. Buy this book, read it, and apply it NOW at www.ronsmithhvac.com. Send him as much money as he wants…it’s worth 1000 times any purchase price.


Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.
 

   April 2008 issue

Chapter 6: Marketing Part 2: Understanding marketing principles and methods.
by Ron Smith

Before you do anything else, study your “competition’s” marketing programs. The competitors aren’t other HVAC contractors; they are the retailers in your area who sell cars, boats, jewelry, computers and on and on. These businesses are well-versed in how to get customers in their doors and we can learn a lot from them.

The next area to focus on is in generating internal leads. An internal lead comes from your team members including sales persons, technicians, installers…everyone.

Media advertising, including newspaper, TV, radio, yellow pages, billboards, home shows and the internet must have a way to track leads so you can know what is working and what is not. Understand that you will be spending a lot of money to reach people who will not become your customers.

Direct response, including direct mail and telemarketing, can be sharply focused with your message, your offer and your target customer. There’s an example of how effective this can be beginning on page 170.

Guerrilla marketing includes all of those creative and relatively inexpensive tactics used my many businesses including door hangers, yard signs, equipment stickers, truck signage and so on. For hundreds of examples of this go to www.comanchemarketing.com and sign up for Matt Michel’s free monthly newsletter.

In all advertising you should include three elements:

1. Make a bold statement. SAVE $300 ON YOUR GAS BILL.
2. Include urgency. Hurry. This offer ends on May 3.
3. Dollars Off. $500 off if you act now.

Next Month: How to run a successful direct mail sales campaign.

(Note from Tom: If you don’t know who Ron is then let me just say that he’s the guru’s guru in our industry. He’s tried it all and done it all, sometimes with great success, and sometimes not. He has candidly shares his lessons-learned with all of us so we can save time, save money, save effort, save stress…and prosper! Here are just a few excerpts from his book. Buy this book, read it, and apply it NOW at www.ronsmithhvac.com. Send him as much money as he wants…it’s worth 1000 times any purchase price.


Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.
 

   May 2008 issue

Chapter 6: Marketing Part 3: How To Run a Successful Direct Mail Campaign
by Ron Smith

Direct mail allows you to market to the exact group of customers or not-yet customers in the exact area, exactly when you want to, with the exact product you wish to promote. Direct mail’s response is immediate so you know if it worked or not. And it allows you to test ideas without investing a large part of your limited marketing budget.

The fundamentals:

• Use a standard business envelope
  
• Print/type the customers’ name and address on the envelope AND the letter
  
  
• Mail to past customers/clients should be mailed first class; mail to not-yet customers can be sent bulk mail with a permit
  
  
• Date each letter
  
  
• BOLD the mail message in the first paragraph of the letter
  
  
• Mention the “dollars off” offer more than once
  
  
• Mention the “urgent call to action” more than once
  
  
• The last paragraph should say, “Call Mary at 1-222-222-2222”
  
  
• If it’s a Precision Tune-up offer or system enhancement offer you should include the price; if it’s a higher-end enhancement or equipment offer include the monthly investment amount
  
  
• The sales lead coordinator or equivalent should personally sign the letter so s/he will receive the call
  
  
• Include at least one P.S….two is even better. The P.S. should state the essential offer; it’s often all that the reader will notice.

Next Month: What sales results should you expect from direct mail marketing

(Note from Tom: If you don’t know who Ron is then let me just say that he’s the guru’s guru in our industry. He’s tried it all and done it all, sometimes with great success, and sometimes not. He has candidly shares his lessons-learned with all of us so we can save time, save money, save effort, save stress…and prosper! Here are just a few excerpts from his book. Buy this book, read it, and apply it NOW at www.ronsmithhvac.com. Send him as much money as he wants…it’s worth 1000 times any purchase price.


Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.

   June 2008 issue

Chapter 6: Marketing Part 4: What Results Should You Expect From Direct Mail Marketing
by Ron Smith

As we said last month, direct mail allows you to market to the exact group of customers you want to. Direct mail’s response is immediate so you know if it worked or not. Here is an example of the kind of results we learned we could expect from a letter offering a precision tune up:

• We mailed 600 to 1000 personalized letters each week over an 8 week period
  
• The return rate ranged from under 1% to 2.7%
  
• When we made a phone call to follow up the return rate increased to 2.8% to 4.6%
  
• About 65% of those signed up for a 1-year Service Agreement
  
• 5% purchased a system enhancement
  
• There was one equipment sale for $5,200
  
• Total sales were $75,410 with gross profits of $37,505
  
• Total costs, including creating the letters, printing, mailing, phone follow up, etc, were $7,400
  
• Total profit generated $30,305!

So, think of it this way: you need work for your techs, you always want more sales, and you always want more Service Agreement customers so you invest $7,000 in a program that brings in $30,000 in profit. How often do think you would like to do that?!!!


Next Month: Telemarketing and Guerrilla Marketing

(Note from Tom: If you don’t know who Ron is then let me just say that he’s the guru’s guru in our industry. He’s tried it all and done it all, sometimes with great success, and sometimes not. He has candidly shares his lessons-learned with all of us so we can save time, save money, save effort, save stress…and prosper! Here are just a few excerpts from his book. Buy this book, read it, and apply it NOW at www.ronsmithhvac.com. Send him as much money as he wants…it’s worth 1000 times any purchase price.


Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.

   July 2008 issue

Chapter 6: Marketing Part 5: Telemarketing and Guerrilla Marketing
by Ron Smith

Direct Response Telemarketing

While this had proven effective for generating sales leads in the past it isn’t recommended today due to people’s dependence on cell phones and their growing resistance to home phone solicitations.

On the other hand telemarketing to clients to make “happy calls” after service or an installation has been complete has been and is still an excellent to ensure customer satisfaction.

Telemarketing as a follow-up to direct mail, known as “integrated direct response” can outperform either lead-generation method done on its own.

Guerrilla Marketing Tactics

These include the low/lower cost marketing tactics that by themselves might not produce a lot but collectively can produce good quality, consistent leads. See more on pages 172-4 but some examples include: a product brochure in all outgoing mail, door hangers, company hats, refrigerator magnets, bi-lingual business cards, etc.

A favorite is called “fusion marketing” where you partner with a different home-service provider, such as a roofing company, to share leads with you.

Take care when partnering with third-party lead providers, such as American Home Shield, who are hard negotiators and pay low rates. If you are permitted to create your own client-relationship with the customers they send you then this can be a good way to grow your client-customer base.

Next Month: Sales!
 

(Note from Tom: If you don’t know who Ron is then let me just say that he’s the guru’s guru in our industry. He’s tried it all and done it all, sometimes with great success, and sometimes not. He has candidly shares his lessons-learned with all of us so we can save time, save money, save effort, save stress…and prosper! Here are just a few excerpts from his book. Buy this book, read it, and apply it NOW at www.ronsmithhvac.com. Send him as much money as he wants…it’s worth 1000 times any purchase price.


Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.

   August 2008 issue

Chapter 7: Part 1: Sales: Turning Marketing Into Results
by Ron Smith

Step 1. Sales Lead Coordination.

Every sales lead is precious yet most companies don’t carefully protect them. Hard-earned money is spent creating qualified sales leads and some are lost or not completely followed through on. The only way to guard against this is to set up and manage a structured sales lead process where all leads are assigned to a comfort advisor and tracked to final disposition. Along the way some very meaningful information is compiled.

Sales lead coordination is so important it is often the first area I focus on when working with a new consulting client.

Here’s how you do it. (Page 180 for more details)

• • An office coworker is designated as the sales lead coordinator. This is usually a part time assignment.
  
  • All leads, for full systems or service agreement, are directed immediately to the coordinator.
  
  • The ccoordinator completes a sales lead form (sample on Page 181).
  
  • All leads are followed through to final disposition. Final reports are created.

Next Month: A Day in the Life of the Sales Lead Coordinator


(Note from Tom: If you don’t know who Ron is then let me just say that he’s the guru’s guru in our industry. He’s tried it all and done it all, sometimes with great success, and sometimes not. He has candidly shares his lessons-learned with all of us so we can save time, save money, save effort, save stress…and prosper! Here are just a few excerpts from his book. Buy this book, read it, and apply it NOW at www.ronsmithhvac.com. Send him as much money as he wants…it’s worth 1000 times any purchase price.


Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.

   September 2008 issue

Chapter 7: Part 2: A day in the Life of the Sales Lead Coordinator
by Ron Smith

Step 1. Sales Lead Coordination.

The sales lead coordinator is a dispatcher in sales. Their primary job is to connect with the customer-prospect and schedule the comfort advisor for the sales call. They will set the appointment at the customer’s convenience and gather some preliminary information (see Prospect Alert Form on page 181).

This avoids the tendency for some sales persons to “prequalify” the prospect, forming an opinion about their likelihood to buy. This can result in lost sales.

The two questions asked up front are:

1. “Mrs. Jones, can you share with me what prompted you to phone us and where did you get our name?”

2. When is the most convenient time for our comfort consultant to come to your home and provide all of the information?”

If the customer seems willing there is additional information that should be gotten at that time.

The sales lead coordinator keeps each comfort advisor’s schedule and knows when they are and are not available.

After the appointment the comfort advisor updates the sales lead coordinator of the result, including any follow up commitment that was made. If the job is not sold in 30 days it is recorded as such. The comfort advisor is encouraged to continue to follow up with the prospect.

The sales lead coordinator keeps the sales manager regularly informed including a monthly report on all leads, their source, each comfort advisor’s sale results and more. This is a very important part of the sales lead coordinator’s job.


Next Month: Determining the portfolio of products and services

(Note from Tom: If you don’t know who Ron is then let me just say that he’s the guru’s guru in our industry. He’s tried it all and done it all, sometimes with great success, and sometimes not. He has candidly shares his lessons-learned with all of us so we can save time, save money, save effort, save stress…and prosper! Here are just a few excerpts from his book. Buy this book, read it, and apply it NOW at www.ronsmithhvac.com. Send him as much money as he wants…it’s worth 1000 times any purchase price.


Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.

   October 2008 issue

Chapter 7: Part 3: Determining the Portfolio of Products and Services
by Ron Smith

Step 1. Sales Lead Coordination.

What products can your company have that meet the following criteria?

• • Keep people comfortable
  • Save people money

In residential replacement/upgrade the list includes equipment, enhancements, demand service, service agreements, precision tune-ups, duct cleaning, hearth products, ultra-violet air treatment, humidification, dehumidification, air filters of all kinds, extended warranties and much more.

It is great company exercise to have a meeting with all employees and have them identify new products and services that can be offered to customers. Asking for their suggestions will create involvement and their commitment.

Next pare the list down to the basics to get started. You can add one or two new items each month.

Train your coworkers on the benefits of the products, value, presentation and installation. Your coworkers will be are going to play a very important part in creating business you wouldn’t get without them.


Next Month: Creating sales leads for system enhancements

(Note from Tom: If you don’t know who Ron is then let me just say that he’s the guru’s guru in our industry. He’s tried it all and done it all, sometimes with great success, and sometimes not. He has candidly shares his lessons-learned with all of us so we can save time, save money, save effort, save stress…and prosper! Here are just a few excerpts from his book. Buy this book, read it, and apply it NOW at www.ronsmithhvac.com. Send him as much money as he wants…it’s worth 1000 times any purchase price.


Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.

   November 2008 issue

Chapter 7: Part 4: Creating Sales Leads for System Enhancements
by Ron Smith

The #1 strategy is for the service technician and precision tune-up specialist (and installers to a lesser degree) to appropriately offer products to customers when they are in the home. If the technician sells the product at that time they receive the Coworker Spiff; if they do not sell it they turn the lead over to the sales coordinator who assigns it to a comfort consultant.

It works well for the technician to demonstrate a product when possible, such as a programmable thermostat.

The #2 for selling system enhancements is for the comfort advisor to sell then with every equipment sale.

The third method is to send a direct mail letter 3-4 times a year as described in the past marketing article. These letters and product offerings should be appropriate to the season.

The fourth method includes all of your guerrilla marketing tactics such as including a product brochure in any kind of mailing you are sending to any customer in any category.

None of these strategies are very expensive. For a sample direct mail letter for system enhancements see page #188 in my book.

Next Month: Cost effective sales leads for demand service

(Note from Tom: If you don’t know who Ron is then let me just say that he’s the guru’s guru in our industry. He’s tried it all and done it all, sometimes with great success, and sometimes not. He has candidly shares his lessons-learned with all of us so we can save time, save money, save effort, save stress…and prosper! Here are just a few excerpts from his book. Buy this book, read it, and apply it NOW at www.ronsmithhvac.com. Send him as much money as he wants…it’s worth 1000 times any purchase price.


Ron Smith founded Modern Air Conditioning Inc in Ft. Myers, Fl in 1965 and built it to a $15M company before he sold it. He purchased, grew and sold three other HVAC companies before founding Service America, the first national HVAC franchiser. He founded Ron Smith and Associates in 1991 and created and presented his ground-breaking Dominant Market Share program. He became the Chief Operating Officer of Services Experts and helped grow that business to include over 200 contracting companies. He is one of only 28 individuals to be elected to Contracting Business magazine’s Hall of Fame. He is one of the founding owners of Service Roundtable ( www.serviceroundtable.com ), a contractor networking group, and is currently a contributing author to HVAC Business Magazine. He does limited consulting and can be reached at www.ronsmithhvac.com.
 

January 2009 issue

Chapter 7 Part 5: Cost Effective Sales Leads for Demand Service
by Ron Smith

Demand service includes, for the most part, the service calls you get from homeowners that have not used you in the past. They wouldn’t be calling you unless they have a problem and typically want someone to respond quickly.

The traditional resource for finding a service company has been the yellow pages. Even in our web-based world it still makes sense to have a small display ad in the yellow pages under the logical headings that appear in your area’s books. That may include: furnace, heating, heating repair, air conditioning, air conditioning repair, boiler, heat pump, etc. (Note from Tom: I hadn’t looked at my phone book in a long time so opened it up and I was elated to see that nearly all of the full-page color display ads were GONE! Ironically the few that were there were from companies I didn’t recognize or were relatively new…a sign that most savvy contractors have wisely moved their precious marketing dollars to more cost-effective methods.).

What’s generally referred to as “guerilla marketing” can be highly cost-effective at creating demand service calls. These are usually low cost, even no-cost, ideas and can be done by every team member in your company. They include: neat, clean attractive and well-signed trucks; thermostat stickers or logoed with your company name; logoed pens; logoed refrigerator magnets; logoed emergency shut-off switch and valve tags and the like.(Another note from Tom: For an exhaustive source of guerrilla marketing ideas check out Service Roundtable www.serviceroundtable.com and check their “Freebies” section…or better yet join and get $1M worth of great ideas and tools…this link will give you the first month at half-off: http://www.serviceroundtable.com/SignUp/default.asp?pid=TP200708

Using the “media” can be expensive but if you have a competitive advantage you can create new business with it. For instance Ron recognized that few contractors were offering service after hours or if they did they charged a premium for it. He successfully promoted his “Extended Service Hours at Regular Price” offer on billboards and even television.

February 2009 issue

Sound Business Principles by Ron Smith

(This article is taken from How to Thrive in a Depressed Economy, a NEW
one-day seminar delivered by Ron Smith and Tom Piscitelli)

The real purpose of a business is to get customers and keep customers.

As a result of getting and keeping customers a requirement of a business is that it be profitable.

The most important asset of a company is its customers. They must be considered precious.  Simply treat customers as you would like to be treated.  It’s not complicated.

Once you impress a customer by delivering what they expected, or more, they tend to be loyal.  In fact, you have to do something wrong in order to lose a customer.

Highly successful hvac residential retail companies are customer-focused. 

Customer-focused companies:

• Make it easy for customers to do business with them.
• Operate at the convenience of the customers, not the company’s convenience.
• Keep customers informed.

The companies do it by:

• Having easy to use consumer financing programs.
• Having properly trained coworkers, both outside and inside.
• Having properly dressed and groomed coworkers, both outside and inside.
• Answering phones with real live people.
• Having available for their customers a complete portfolio of products and services.
• Arranging appointments at the customer’s convenience.
• Having easy to understand printed pricing.
• Having attractive easy to understand and uncomplicated forms and documents.
• Arranging workforce shifts to accommodate extended hours of operation.
• Frequently informing and communicating with their customers utilizing direct mail, newsletters and email.

Highly successful hvac residential retail companies are also marketing driven.

Marketing driven companies:

• Understand that nothing happens in a company without a sale.
• Develop a structured marketing program and use it.
• Everyone is in sales, meaning that all coworkers participate in the sales process.

Coworkers participate in the sales process by:

• Making sales (they have the information to do so).
• Turning in sales leads so other coworkers can make sales.
• Saying positive things in the community about the company.

The objective is to develop and manage a highly successful company by adopting a customer-focused marketing-driven company culture.

An organization is a group of people who have come together with a common belief, goal or mission.

Your belief of being customer focused and marketing driven provides you with the mission of:

“Get and Keep Customers”

“Business is simply Monopoly with Real Money”

Ron Smith