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A Message From Grandy & Associates...
Eight Things We Can
Learn From Joe the Plumber! - Part 2
By Tom Grandy
Last month I shared the true story of “Joe the Plumber”, which was a made
up name. We talked about how Joe was the typical plumber back in 1995 in
the sense that he was working really hard but wasn’t making any money. Joe
then made a decision - a decision to be profitable. Joe took some time
off, identified each and every problem he had within his company at that
time, and then created a business plan to overcome each problem while
generating a reasonable profit. At the end of the process Joe decided to
concentrate on one thing and to do it better than anyone else in town. Joe
became a 100% service company. After running the numbers, Joe found out
that in order to run his new company the way “he wanted to run it” was going
to require that he go to flat rate pricing with an internal hourly rate of
about $250/hour. Joe made the change and today, he runs a multi-million
dollar service company with a very nice profit margin! If you didn't read
last month’s feature article, you might want to
check it out as it is the foundation for what will be shared in this
article!
This month we are going to review what Joe did to turn his company around.
As we look at the changes Joe made we will discuss eight (8) specific things
we can learn from our friend Joe the Plumber. Let’s get started.
Proper Pricing is Key to Making a Profit
It doesn’t matter if you are a one man operation or a multi-million dollar
company. Proper pricing is foundational if you want to make a profit. It
makes no sense to charge $125/hour because everyone else does if you need
$147 to cover your real costs of doing business while generating a
reasonable profit. Joe spent the time, and it takes time, to review all of
his costs of doing business in order to determine what he had to charge per
hour. Until you KNOW what you must charge per hour to cover your real
costs of doing business you will never be priced right and you will never
generate a profit!
Price is NOT the Determining Factor
Remember Joe’s thought process last month? His first step was to design
the new company in a way that would allow him to exceed his customer’s
expectations. He then calculated all of the real costs of doing business,
including a reasonable profit, so he could determine what he had to
charge per hour. This process ensured that everything was covered in his
hourly rate.
Did you pay close attention to what Joe did? His first concern was to
exceed the customer’s expectations. He was not concerned about what he was
going to have to charge per hour because he understood a principle few
contractors have yet to grasp. Joe knew that what he charged per hour was
NOT the deciding fact in whether the customer used him or not. He knew
that if he exceeded the customers’ expectations, the price would not even be
on the customers top ten list of concerns. Joe went to flat rate, charged
$250/hour and has experienced profitable growth ever since. By the way, it
has been nearly fifteen years since Joe made the change. He is now well
over $300/hour and is still experiencing profitable growth! Joe is NOT
gouging the customer at $300+ per hour. That is what he has to charge to
cover costs while generating a reasonable profit.
Happy Customers Create Referrals
I read an article by Bob Daniels recently that reinforced what the customer
is actually looking for. People tell other people about your company not
based on how well the repair was done but - are you ready for this - based
on how “nice” the tech was. That’s right. A huge portion of the customers
perception of how well the job was done was not based on the repair itself,
but how customer oriented the technician was. Take a minute and read the
following quote from Bob’s presentation:
“Next time a friend or acquaintance raves about a local
business, ask them what they liked. Nine times out of ten the answer will
be "their employees were so nice..." And even if you come back and ask,
"well, how was the product or service you received," the answer will be
something casual like "fine, I guess, but boy, the men that came to my house
were soooo nice“. It is almost shocking. People actually form their
judgment most often based upon how they were treated, not on how well the
work was performed.
Joe understood this principle. That is why his new business plan included
a substantial budget for customer service and customer relations training.
Today, Joe’s customers don’t tell their friends how high their bill was.
Instead, they tell them about the tech showing up on time, how they wore
booties, and how they actually listened to them. Most of all, however,
Joe’s customers talk about how “nice” the techs were. Get the point!
When presenting our three-day Basic Business Boot Camp I often use the
phrase “Hire for attitude and train for service”. Attitude can be altered,
somewhat, through training but the hill is a lot easier to climb if the
individual you hire has a great attitude to begin with. An individual with
a great attitude can learn the technical side of the job. The reverse,
however, is much more difficult.
Top Techs Are Attracted to Well Run Companies that Offer Above
Average Wages and Benefits.
There are two basic reasons a tech stays with a company year after year.
The foundational need is to make a good living for their families. Remember
Joe’s initial criteria. He wanted his average tech to earn between $50,000
and $100,000 per year. In addition, he provided full medical, dental and
vision insurance as well as a 401K plan and profit sharing. That is a great
program! As a matter of fact, I usually have several contractors in our
classes that want to close their business and go to work for Joe.
Now think for a moment. If your company offered that kind of pay and
benefit package, do you really think you would have any problem finding, and
retaining, the best techs in our area? I don’t think so. I know what some
of you are thinking - “Tom, there is no way I could offer my techs that kind
of package.” My answer is “Why Not!” Joe does and several other
contractors I know have similar programs. The key is to include all
your costs of doing business into your hourly rate, have the courage to
charge what you have to charge to cover them and then provide service beyond
your customer’s expectations.
I mentioned there were two reasons techs stay with a company long term.
After the basic needs are met, the next criteria is being appreciated and
recognized for doing an outstanding job. Below is an unsolicited quote
from one of our ProfitMaxx software users. ProfitMaxx is a software program
that accurately tracks the productivity and profitability of each service
technician. Listen to what this ProfitMaxx user said:
“I implemented the “Super Tech 500” bonus program within
ProfitMaxx in May. We are now two months into the program and we have seen
at least a 30% increase in production. The word has gotten out to other
techs in our city and we are getting calls daily for interviews. Those
techs that are not performing know exactly where they are not productive and
they also know that we have a list of applicants ready to replace them with
if they don’t improve.”
Did you hear that? The word had gotten out to other techs in town.
Quality techs want to work for companies that not only measure their
productivity but also reward them for it. Your techs want you to know they
are doing a great job. If you recognize and reward outstanding performance,
quality technicians will seek out and want to work for you. If you combine
an outstanding pay package with a recognition program for outstanding work,
you will attract and retain the best techs in the area. Build the costs
into your pricing and provide the service to back it up!
By the way, Joe attended our three-day “Basic Business Boot Camp” and fine
tuned his company a bit more. If you want to learn how to run a really
profitable company I would urge to attend one of our three day “Basic
Business Boot Camps”. To review scheduled dates and locations check out our
website at
www.GrandyAssociates.com/bbb.
How Well Are You Using Your Opening Line Of
Communication? By Bill Kinnard
How well is your company using your
opening line of communication? Who do you have answering your phones? All
too often, companies hire someone to work in the office, give them a list of
tasks that they will be responsible for completing on a daily basis and then
tell them, almost as an afterthought, "Oh, and by the way, we'll also
have you answer the phones when they ring."
As I work with companies across the country, I often here someone in the
office make a comment about how much more they could get done if the phone
would just stop ringing. You spend your time and marketing dollars doing
everything you can to get the phone to ring only to have it considered an
inconvenience when it does. The person who answers the phones will give your
customers their first impression of your company. With this in mind,
consider a few thoughts…
What is the impression your customers are get when the phone is answered
at your company?
It doesn't matter if the customer
has been with you for years; you need to make a good first impression every
time you interact with them.
I recently called for technical support on one of the computers in our
office. I have purchased every computer I have from this company and have
done so in large part because of the level of support after the sale. I love
working with this company. When I have a problem (let's face it, we're
talking about computers - there will be problems), they take care if it with
incredible speed and efficiency. This call, however, was much different. I
spent two hours being transferred from one department to another with each
telling me that the problems needed to be handled by anther department. At
the end of it all, I ended up with a computer that still doesn't work the
way it should. My perception of this company and their level of service took
a severe hit.
What is the message you are giving to your customer every time they call in.
Every person in your company needs to remember that this may the tenth time
they have heard this problem today, but it's the first time this customer
has dealt with it.
What is the priority you put on the phones?
If answering the phones are just
something else that the person in the office has to deal with, chances
are, the customer will feel like they are bothering you. On the other hand,
if you make answering the phones the priority, the customer will get a much
different feeling. Take that time to make them feel important. Make sure
they know that you care about them and the problem that they have.
How Knowledgeable is the Person Answering Your Phones?
Can they truly help the customer or
are they just taking messages? Remember that you don't sell products, you
sell solutions. You can't solve their problems if you don't know what they
are. Make sure your Customer Service Specialists (yes - I gave them a title)
know what questions to ask. They should know the details about your product
offering and the problems they can solve as well as your current marketing
programs and special offers. There is nothing more frustrating and
unprofessional to your customer than to call into your office about a
special offered on the post card they just received, only to be told
"Well, I don't know anything about that…they're always sending out stuff
that I don't know about!"
The person who answers your phone will set the customers' impression of the
level of service that you can provide them. Regardless of the size of your
company, you can knock the socks off of your customer when it comes to their
level of satisfaction. Your Customer Service Specialists have the ability to
set everyone else in your company up for success. If they know that just a
little about the products you offer and how your company can solve the
problems your customers' have, they will immediately know respond to your
customer problem. Here are a few examples:
They don't need to know how to sell a complete system. That's
what you have your sales group for but they should be able to tell your
customer that your Comfort Consultant can explain the benefits of a zoning
system that will take care of those hot and cold spots that their calling
about.
They don't need to be able to sell an irrigation system but
they should be able to let the customer know that you can install the water
saving system that will prevent the lawn sprinklers from running when it's
raining out.
They don't need to know how to fix a system but they need to
be able to explain that your factory trained technicians are among the best
in the city, and for one flat diagnostic fee of $69.00 will come out and not
only determine what is wrong with their system, but also let them know the
repair costs before they get started. This way the customer is in full
control.
They need to know about your maintenance agreement program and
how to explain the benefits while they are setting the appointment for the
service call.
These are not difficult things. They are all things that need to
be the focus of your company. If you don't put a focus on them, no one else
will. New customers are hard enough to find. I am aware of several companies
that, in spite of the current economy, are growing. They continue to strive to
take care of the customer in ways that no one else in town is. As a result, new
customers keep coming their way. When those new customers do come around, you
need to let them know they are your most important customer. Offer options and
maintenance agreements, learn more about the things they see as problems and how
you can solve them. Pass that information along to the Service Technician or
Comfort Consultant before they get to the customers' home. These small things
will improve your chances of increasing your total ticket amount. If this is a
focus of your entire company, before long, you will find yourself growing - even
in these down times.
The ideas mentioned
here are just some of the things covered during our three day Basic Business
Boot Camp. Consider attending at one of the locations across the country.
Doing things the same way over and over agian will only give you the same
results. There is never going to be a great time for training. Pick a date,
put it on your schedule and make it happen. Make the changes you need to
while time is still on your side.
Attend a FREE Webinar to learn more about the Basic Business Boot Camp
Grandy & Associates has bi-monthly (free) "live" webinars so you can learn
more about the three-day
Basic Business Boot Camp and how it can benefit
your company. All you need is access to the internet and a phone. Attending
the live webinars allows you to ask questions and to discuss your company
issues with Tom or Bill.
Upcoming
webinars are scheduled at 1:00 PM Central on:
Service Success Requires Performance-Based Management
By Bill Kinnard
Do you expect your service department to make a profit? Does it? The answer
to the first question should be a resounding Yes. The answer to the second
question should also be yes, but reality states that there are a number of
factors that will affect your profitability. For years, the service
department was looked at as a necessary evil. "I have a service
department only because I have to have one. I would get rid of it if I
could!" is a common comment I hear from contractors in Boot Camps
across the country. Then, after modeling their company, they find that this
department is actually making money and in many cases, is offsetting losses
in other parts of the company. There is no question that your service
department can, and should be the most profitable department in your
company. That's right! I said it. What are you doing to insure this is the
case in your company?
Your Service Department is Changing!
First, realize that your service department is changing. So are your
technicians. The service department as a whole needs to be more proactive.
In the past, the service department was reactive. The phone rang. The
Dispatcher talked to the customer. An appointment was scheduled. The tech
went to the job and fixed the customers' problem and the office sent the
customer an invoice for the work performed. Everything was a result of the
customer calling in with a request for service. Nothing happened until the
phone rang.
In the service department of the past, the customer base was in the
accounting department but eventually it is moved into dispatch software.
The company could not (was unable to) tell the service team what had to
happen. Accountability used to be "keep your truck clean, wear your uniform
(if you used them), be sure to fill out your time sheet, etc." All very
milk toast kind of stuff that had no real impact on the profitability of the
company. If your service department is still operating under this structure,
there is no question; you are feeling the pinch of the current economic
times.
The service department of the future looks considerably different. Here, we
are setting expected goals for each technician. When you first make these
changes, your techs will likely think you are "looking over their shoulder,"
but they will soon engage. The service technicians and the service
department (not the sales department) will retain the relationship with the
customer and will now be responsible for customer retention. The techs will
now focus on educating and informing the customer on all their options
including repair, replacement and buying add-ons to enhance the system they
already have. They will make generating "qualified" sales leads a normal
part of everyday life. They will become the market penetration leader for
your company and will focus on gaining new customers for your company.
Your Technicians Need to Change Along With the Department.
Your technicians need to change along with the changing service department.
The tech of yesterday needed to be able to "fix" anything they worked on.
The equipment was "dumb" and required limited expertise. As a result, all
troubleshooting was done by the technician. You communicated with your tech
via pager and truck radios. Your top guy was easy to describe - They could
fix anything - the really outstanding ones showed up on time, wore clean
uniforms and their truck didn't drip oil on the customers driveway. The
bottom line is they spent their time with the equipment, not the customer.
The technician of today needs be much different. Today the equipment is
intelligent with fault codes, self-tests, troubleshooting and alarm codes.
Today's techs interface with the equipment, not just work on it. The
communication with your technician has changed as well. He or she carries a
cell phone and possibly a PDA or mobile device which not only gives them
their service call, but also gives them customer history, and with GPS
capability, not only leads them to the job but also shows you where they are
at any given time. They look at this not as a job, but as a career. Today's
career tech makes a purposeful effort to spend time with the equipment and
the customers. They know and understand the customer of the future is not
just the service customer, but also the maintenance customer. These techs
know and believe the message they are conveying.
Your customer expects them to arrive on time and be knowledgeable on the
equipment in their home, be debriefed on the problem with options of how to
fix it, know how to reduce costs through more efficient equipment and make
their home more comfortable.
You need to expect that each technician will play their part on the team.
"That's not my job" is not an acceptable response by a tech. They need to do
everything you ask the rest of the team to do. You need to know, without a
doubt, that they see themselves as a Field Customer Service Representative.
You should expect your techs to take their evolution to a career technician
seriously by role playing, self education, being responsible for their own
profitability, and supporting the initiatives of the company's full product
and service offerings.
All of this is why success in your service department REQUIRES performance
based management. Service can now manage the customer.
I've Got the Killer Team But How Do I Start?
The first step is to define your expectations for each of your techs, and
for the team as a whole. We have defined 24 key performance indicators that
need to be tracked on every technician in your company. Once your goals are
set, you need to communicate with each and every tech what your new
expectations are and how they will be tracked. Your tracking system must be
easy, reliable and consistent. They need to know the benefits and
ramifications of meeting, exceeding and falling short of your expectations.
You need to be fair to each and every tech. Know that some techs will resist
this change. Remember, they will think you are looking over their shoulder.
Manage their performance, not them. If you focus on their performance, they
will either fall into line or fall away from the company. Don't be afraid of
this. Pruning of the dead wood is always a good thing and will allow your
service department to flourish. This will happen even if the guy you think
is your top tech is the one who leaves.
Spend your time defining and refining these points. The saying "work on
your business, not in your business" really applies. This will enable you to
increase profitability far more than pitching in to run a few extra service
calls.
Grandy & Associates is the sole provider of ProfitMaxx software. ProfitMaxx
was created to allow you manage the performance of your service department
to a level of success. ProfitMaxx will work for any company whether on flat
rate pricing or time and material and will handle all tracking and reporting
functions after only minutes per day entry time investment. With a payback
of as little as 9 months with only one technician and much quicker with more
techs, it's affordable for any size company. If
you would like more information on the ProfitMaxx software, give us a call
at 1-800-432-7963 and/or sign up to attend a FREE 45-minute webinar. If you
want to check out ProfitMaxx on your own then visit our website at the ProfitMaxx
Information Home.
Attend a FREE Webinar to learn more about ProfitMaxx
Grandy & Associates has bi-monthly (free) "live" webinars so you can learn
more about ProfitMaxx
and how it can benefit your company. All you need is access to the internet
and a phone. Attending the live webinars allows you to ask questions and to
discuss your company issues with Tom or Bill.
Upcoming
webinars are scheduled at 10:00 AM Central on:
A Flooded Candidate Pool and
Your Still Making Wrong Hires... Why?
By Bill Kinnard
First of all, know that you’re not alone! The wrong people are
being hired and "shoe-horned" into the wrong position every day. Why are we
unable to make great hiring decisions? The answer is simple: BIAS.
Attracting people who are looking for a job these days is easy. Screening
out all of the unqualified canidates and finding a superior performer is the
real challenge. This challenge also means we must look at the job
objectively and eliminate any biases that keep us from selecting the best
candidate.
We all see the world from our own viewpoint. This
viewpoint is influenced by how we value experience, knowledge, economics,
aesthetics, altruism, power and tradition. When we are confronted by a
person who sees the world differently, our views could be called biases.
They're neither right or wrong, nor good or bad, but biases are simply a
reflection of our personal viewpoint. Most often, this personal viewpoint is
unknowingly injected into the hiring process even when it is not have
anything to do with the position itsself. When this happens, we will likely
hire someone to do a job that they are not cut our for.
Today we have laws that keep us from acting on our biases as they relate
to gender, age and nationality, but there are still biases that get in the
way. Many people are also unknowingly biased on experience, education and
intelligence, and this keeps them from selecting superior performers. In
addition, job seekers bring much more to the job, including their passion,
beliefs, personal skills and behaviors. One of the most important personal
skills is that of personal accountability. I would venture to guess it is
one of the most important skills your employees need. Most companies do not
have an awareness of its importance, nor do they have a way to measure it.
Determining the ideal candidate for a position can prove to be not
only the most frustrating part of the hiring process, but also the most
difficult.
Each person involved in the hiring process will have his or
her own idea of what skill set, experience and education is required for any
given position. a well written job descriptions can help, but the personal
skills, behavioral style, attitude and motivations of the ideal candidate
tend to be undefined and left up in the air. This hiring process becomes
subjective, rather than objective, and leaves everyone involved frustrated
and with less than desirable results.This process usually ends up with you
hiring someone, only to let them go a few months later be cause they didn't
work out. By turning the process around, you will save time and energy, and
help you hire the right person for the job...the first time, and as a
result improve your bottom-line.
Create a Usable Measuring Stick
Our Hiring Solutions job benchmarking process is unique and
effective because it benchmarks a specific job, not the people doing the
job. To do this, we let the job talk through an interactive process and an
assessment on the job, not the individual. This process is simple and
eliminates the bias, personality contests and unknown variables that can
cause you to hire the wrong person.
The interactive process helps you determine key accountabilities that are
specific to the job itself. Key accountabilities are concise statements used
to describe the performance objectives for a particular position. Key
accountabilities are important to the job benchmarking process because they
are used to clarify the position, determine why the position exists and what
value it brings to the organization.
Through an assessment on the job, the process focuses on how the job should
be done by considering:
What personal skills are needed for the job?
How does the job reward superior performance?
What behavioral styles will contribute to success?
Once the job benchmarking process is complete, you now have your measuring
stick. You can see now see how well each candidate stacks up to what is
needed to do the job.
It takes about two hours to create a benchmark and the process can be done
for any position in your company. We have created benchmarks for several
positions already and have them ready for you to use with your next hiring
decision.
If you would like to learn more about the tools help you improve your hiring
processes, visit the
Hiring Solutions Informational Home or give us a call at 877-202-8891.
If you would like to learn more about the tools help you improve
your hiring processes, visit the or give us a call at 877-202-8891.
Generation Y is your new employee. These people were born between 1981 and
1989 and they currently make up 20% of the workforce…but its growing. Yes,
they are different from past generations so it is critical to know what
matters to them and what motivates them.
Key Points:
Every employee is different but each is also part of a unique
generation that has its own value system, work ethic and expectations. This
presentation will help you better understand the employees you are currently
hiring, and will be hiring, for many years to come. If you are going to
hire, train and retain these employees you need to know where they are
coming from.
Demographics, expectations and value systems of
different generations
Traditionalist - Pre 1945
Baby Boomer - 1946 to 1964 (workaholics)
Generation X - 1965 to 1980
Generation Y - 1981 to 1999
How to engage and develop generation Y employees
Their future is bigger than your past!
Need to have skill assessments to know what they are good at
Have individual development plan
Ask their opinion often
Need to get to know them
How to motivate and inspire and retain these employees through SAM
S - Set high expectations for them
A - Appreciation (they leave for lack of appreciation and
recognition for what they do)
M - Making a difference. This generation wants to make a
difference
How to support them
Provide tools and training
Create proper culture
Be their champion
The Service Contractors Business
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