Am I Normal?

We’ve all seen them—those little plywood cutouts at theme parks, where a character has his hand held out and says, “You must be this tall to ride this ride.”

I often get a version of that in my contractor workshops during breaks—many times a contractor comes to me and says some variant of, “Am I normal?”  There seems to be so much of this thinking in our trade that I thought I’d devote a blog to it. Read more…

“Ooohs!” and “Aaaahs!” at the Grand Canyon

I returned Sunday night from the Grand Canyon where I spent 8 days at the North Rim Lodge with about 16 other astronomers showing the guests of the lodge and park the wonders of the night sky with our telescopes, which were set up on the Lodge’s veranda. Read more…

Name Your Price

As promised in the prior two blog posts, I want to discuss in this post a new approach to sales that may help you get through these unprecedented financial times (especially now that the Supreme Court has shredded credit protection law).

What would happen if you told your customers that if they needed a new system, they could name their price and you would build a system for them that met their budget? Do you think they would find that worth looking into? Better yet, would it tick off your competitors? (A good sign you are doing something right!) Read more…

This Changes Everything

The landscape is littered with the debris of once-great corporations.

Two-thirds of the American automotive industry is now in Chapter 11 reorganization. (One of those cases is, as of this afternoon, pending a decision by the Supreme Court on whether or not shafting the protected creditors is legal. I hope the courts rule in favor of the bond-holders and not cave in to the pressure by the Administration to pay back their union cronies with a fat slice of GM and Chrysler. To approve the Administration’s plan would be to forever smash the rules of bankruptcy that have protected American investors to this point. If the Court upholds the Administration, watch American investing dry up as venture capitalists find safer places to invest-and that includes foreign investors.) Meanwhile, the President promises to “save or create” (how can you ever tell the difference in these two????) 600,000 jobs over the next 100 days-at a time when the economy is losing 600,000 jobs A WEEK. Big deal.

The sea has changed, and probably changed forever. Read more…

A New Approach To Selling?

Lately, I have become somewhat irritated (annoyed, peeved, irked, disenchanted, tired, bored) by the car insurance commercials on television.  One of them features a little gecko with a cute Australian brogue, while another has a pile of money with big eyes on it, and the third has a ditzy gal named Flo acting like a ding bat in an insurance store.

Don’t get me wrong. I am not knocking their products. I am sure the insurance offered by the folks who came up with the gecko (or the stack of money) and Flo have good insurance. I am just getting sick of their stupid ads.

But those ads do work, don’t they!  You know precisely which companies I am talking about, don’t you!

Then as I pondered the latest spiel by Flo, I got to thinking. Flo’s company is now offering customers the option to name their price and they then build a policy around that price.

Shazzam! What an idea. Let the customer name the price, then give the customer what his price will buy.  (There must be times, I assume, where the price a customer would name would not buy her enough coverage, so she may need to reset her price level to get the protection she wants- but once she is on their website, she probably ends up buying from them, doesn’t she?)

So that got me thinking.  What if we sold air conditioning that way?  Let the customer set their price up front and then showed them what we could build for that money?

How many times have you gone through an elaborate and intense sales process only to set your price and then be told by the customer, “Well, we need to get some more bids.” (This is a polite way of saying, “Hey, clown, you’re out of our price league!”) Or, “Let us think about it. We’ll call you back in a day or two.” (Which often turns into… like never.)

So I am going to put together what a “Name Your Price” sales call might be like and will post it here as soon as I get it done (hopefully by the middle of next week). Check back soon to see what I come up with!

How to Haggle With A Contractor???

I subscribe to Money magazine. The June 2009 issue had an article that almost made me leap out of my easy chair when I read its title (the title of this blog post). What I read made me feel even more incredulous at how some contractors approach their trades!

The premise of the article was that the publishers solicited advice from various contractors (painters, plumbers, electricians, flooring specialists, cabinet makers, etc.) to help homeowners haggle with contractors so they can “cut costs, not corners.”

The first two “experts” advised customers to get multiple bids (at least three) so you’ll know the market price range for the job. And let them all know you’re getting three (or 10) bids, to keep them all honest. Read more…

Tribue to Kermit: It’s Not Easy Being Green

I am going to do something in this Blog post that may brand me as a heretic, but here goes:

I AM GROWING WEARY OF THE “GO GREEN” MOVEMENT!

There. I said it. And I feel better for having said it.

But why did I say it? Because I have seen this sort of marketing fad before. I was a freshman in college when the first Earth Day took place (April 22, 1970) and I recall the silly hype about how we were killing the planet back then. Nothing has changed. We are still talking silly hype about how our chemicals, our buildings, our cars, are killing Mother Earth. (You want a shock? Google Isaac Asimov’s essay, “The Nightmare Life Without Fuel” and read it. Then note when it was written.)

I am an amateur astronomer. I run around with people who are astronomers and geologists. And contrary to what people with a doting press that fawns over every word they say would have us believe, the scientific community as a whole is NOT buying into global warming as a result of human activity. (The term is “anthropogenic.”) Read more…

That Starbuck’s Aura

I stopped at the Starbuck’s near my home this morning to buy a couple of bags of coffee– a bag of decaf espresso roast (for my espresso machine), and decaf Sumatra blend (a strong, earthy blend I love to make in my French press). I asked the barrista to grind them for me, the espresso bag for an espresso machine (a fine grind) and the Sumatra for a French press (a coarser grind).

As he cheerfully did this, I struck up a conversation with the female barrista. She asked me if I wanted a cup to hold me over until I got home, and she had the most awesome smile as she said this! Her teeth glistened and her eyes twinkled joyously. I told her that I could wait until I got home, but thanked her anyway. Somehow, she caught a tiny non-verbal cue in my face and said, “Hmm, I just saw a moment of hesitation there. Did you know that when you buy two bags of coffee, you’re entitled to a free Tall?” That awesome smile again!

I chuckled and said, “Alright, give me a Tall decaf!” As she did, the Barrista grinding my coffee smiled and softly chuckled.

I told her that I teach sales and that her ability to pick up that little non-verbal was awesome!

If I were a contractor, I would have handed her my special contractor’s business card.  On the front would be my company name, logo, contact info, etc. but on the back is a simple statement: “I really am impressed with your sales skills. If ever you wish to change employers, please call me. I will always make room for talent like yours.”

The girl probably doesn’t know beans about air conditioning. She can be taught that.

But she has that special ability to read a customer that I find in only maybe 1 in 100 sales people today. She has a great future ahead of her!

Four Nights in the Sonoran Desert

In late March of this year, a very good friend from Kansas City, Fiske Miles (http://www.fiskemiles.com/sitemap/sitemap.php) came out to Arizona to put the 22-inch Dobsonian telescope he recently built to a dark sky test. (The skies here in Arizona are much darker than those in the Midwest, although the air is usually much more turbulent.

In astronomical parlance, we would say that the “seeing” in Arizona is moderate to poor most of the time, but the “transparency” is excellent. In the Midwest, the opposite is true-usually pretty good seeing and moderate transparency.) Fiske’s web site has a wonderful history of building his telescope. (To put things in perspective, if Fiske had built this scope 150 years ago, it would have been the largest telescope in the world.)

Fiske is a true “renaissance man”, a man of many talents, ranging from cabinet making to birding to astronomy to gourmet cooking. He has a voracious appetite for books and is one of the most intelligent and well-spoken people I know. Read more…

Service Agreement Pricing

As you can tell from my blog history, I don’t blog a whole lot. I am usually too busy every day running my business, being a grandfather to two great grand kids, being active in my church, and being president of the Saguaro Astronomy Club (and observing the heavens every chance I get) to blog much. So when I do post a blog, it is usually because either I (a) have some extra time on my hands and don’t want to hike through the Grand Canyon, or (b) I have something that may be of interest to you.

This is a Type B blog.

Many HVAC contractors want to sell their businesses some day, but most have no idea how to go about doing that. One thing is for sure, though– a well-developed customer database is worth more than your building, fleet, and inventory (in most cases, anyway).

So what constitutes a “well-developed customer database?” One thing it is NOT made of is a shoe box full of job cards. You may have installed 20,000 jobs over the life of your business, but the big question is, How many of those folks have you seen in the last 24 months?  THAT’s the measure of your realistic customer database. I doubt if it would be 20,000. (If a typical service tech can see five customers a day and works 240 days a year– wishful thinking, maybe!– he could touch 1,200 customers a year. Multiply that by the number of techs you have, then multiply that result by 1.5 and you probably have your 2-year “customer touch” count. The 0.5 deduction allows for customers you see very year for tune-ups and the like.)

If those customers are not regularly seen, they are vulnerable– vulnerable to another contractor with an aggressive marketing campaign. So how can you keep your customers tied to you? (And make them of value to a prospective buyer?)

With service agreements. Research I did in the 1990′s, and published in the magazine Contracting Business (Dec 1993, May 1994) and The HVACR News (Nov 24, 1997 and Dec 1, 1997) showed that an undeveloped customer database is worth maybe ten cents a name, while a service agreement base is worth at least $75 a name. Adjusting for inflation, today I would say an undeveloped list is worth $0.15 a name while a developed database is worth at least $110 a name. If you had 8,000 customers in your database, the difference in value between an undeveloped list and a developed one would be $880,000! Holy snowballs, Batman!

But one of the biggest barriers to contractors getting into service agreements is pricing them. That is why I am please to announced I now have available on my site an Excel spreadsheet that takes the guesswork out of pricing them. It runs on Excel 2003 and all later versions and lets you calculate prices for residential and light commercial jobs. Both types of jobs let you price inspection-only agreements, maintenance agreements, and full coverage agreements. The commercial sheet is for DX cooling systems only (no chilled water units, please), but can handle almost any size DX job.

To visit the page or order a copy,click here.