
This Business Building Tool Brought to you by Grandy & Associates		May 2010

A Message from Grandy & Associates

Who Moved my Cheese?

The book Who Moved My Cheese? by Spencer Johnson, MD has sold over 24 million copies. It’s the story of four characters who live in a maze and face unexpected challenges and changes when they discover their "cheese" has disappeared. Sniff, Scurry, Hem and Haw are little, mice-sized people who each adapt differently to the changes caused by the disappearing cheese. In fact, one character doesn't adapt at all...

One day, the daily ration of cheese stopped being provided, and one mouse-person waited day after day for the cheese to return. His thinking was quite simple: We have always had the daily provision of cheese, therefore it will return to normal very soon, perhaps tomorrow. Day after day he waited, thinking of every rational reason why the cheese would return. "It must return simply because it has always been that way" – right? Wrong!

If you have been in the contracting industry more than two years, you are well aware your “cheese” has moved. Like Sniff, Scurry, Hem and Haw, we have responded in different ways. Let’s look at some different reactions to the current changes in the contracting world and see which one fits you.

Prepared for Change and Prospered
A few weeks ago I presented a seminar on labor pricing to about 50 of the top contractors in the HVAC industry during their national meeting. My initial question was, “How many of you have grown and increased profit over the past year?” My intention was to lay the groundwork for the need to change, especially in the area of labor pricing.

To my surprise, about a dozen hands went up, indicating this was actually one of the best years they had ever had. I talked with several of them individually throughout the day, and they all had several things in common. Each constantly evaluated their businesses, department-by-department. They also created business plans for coming years and each constantly tweaked their future plans based on what was happening around them. They did not wait for change to take place; they were constantly evolving to be in a position to prosper on a continuing basis.

Adapted to Change and Prospered
Other companies have not been as quick to see the writing on the wall; but, when they did see it, they changed. When new construction suddenly disappeared, they didn’t sit around like our mouse friend waiting for it to “return to normal.” These companies cut overhead (including personnel) to lower costs while moving more into the residential retrofit and service side of the industry, where cash flow is better and profits are higher.

The really wise contractors realized that cutting overhead was not always enough. The basic overhead was still high, but they now found themselves with fewer hours to spread it over. The bottom line was pretty plain: pricing had to go up if the ship was going to stay afloat. Those with foresight had been on flat-rate pricing for service for many years which made the job easy. They simply reran their numbers, realized their service rates had to go up “x” dollars/hour, and then had their books reprinted at the new rate. Bottom line, the customer never saw the change and profits were maintained or increased. Others, after running their true numbers, realized the need to move forward with flat rate pricing and quickly moved that direction. These companies saw the need to change and they changed.

Afraid of Change and Are Dying
Unfortunately, the vast majority of contractors across the country are simply afraid to change. As a matter of fact, many continue to simply cut their pricing to hopefully get the job. Guess what? It worked ... sort of. They are getting the jobs at the lower prices, but the net result is that they were already under priced and now a bad situation is getting worse. Lowering pricing to get the job has simply accelerated the process of going out of business! We have all heard the phrase “If you don’t change, you die.” It’s true!

Would Not Acknowledge Change, and Went Out of Business
The last group is probably not reading this article. When things began to change, they stuck their head in the sand and refused to believe anything was changing. Since nothing had changed in their minds, no change was needed and no changes were made. The vast majority of those companies are now out of business.

One thing is for sure. Our industry will never be what it was a couple years ago. If you want to grow and prosper, you will need to evolve into a new company with a new direction. Change can be a very good thing if you embrace it. Few enjoy change, but when you look back years later to realize you embraced that change was happening, it was the catalyst to helping your company become what it is today.

If you want to do some detailed planning and modeling you might want to consider attending our three-day Basic Business Boot Camps. Check the schedule of dates and locations on our website at www.GrandyAssociates.com.

Tom Grandy

Grandy & Associates

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Go Find your Hedgehog

I may be a little slow when it comes to getting around to some of those important -- but not urgent -- items on my task list. You know the ones I’m talking about. Those things that you know you want to do – that you should do – that can improve your business, knowledge or offering to your customers. These are the items that are critical, but are not clamoring for your attention and therefore don’t always get done.

I keep a list of books I want to read, and like to use air-travel time to catch up on my reading. Good To Great by Jim Collins has been on my list for years. On a recent trip, I finally took the opportunity to give this one a read. If you haven’t yet read this book, get it on your list. Collins looks at companies that have made the leap from good to great and sustained those results for at least 15 years. These companies were also contrast with companies that could not make the transition to great. Just one factor his team found was one he called the Hedgehog Concept.

Find your Hedgehog
A hedgehog may not be as cunning and crafty as his natural predator, the fox, but he knows one thing very well. The fox will do all sorts of things to win and make the hedgehog his supper. The Hedgehog sees the fox charging and simply curls up into a little ball with sharp spines sticking out in all directions. The fox sees this and has no choice but to retreat and find a new way to attack. People are either foxes or hedgehogs. Foxes do many things and deal with all the complexity of the world around him while hedgehogs simplify things down to one simple concept that guides everything he does.

To find your hedgehog concept, you need to determine three things:
1. What are you deeply passionate about?
2. What you can be the best in the world at.
3. What drives your economic engine?

When you can truly answer these three questions (not an easy task), they become the litmus test for everything you do.

If you are spending time doing something that doesn’t fit into all three areas, it is preventing you from becoming great. Now there’s much more to this concept than I’ve outlined here, but you get the idea. Most companies can’t become great because they have never thought about these three questions. They don’t grow; instead they simply evolve. The phone rings and you have a customer who wants that new system they heard about. In your desire to take care of the customer and increase your revenues, you agree to provide it for them. As a result, you end up spending time, energy, money and resources on something that doesn’t really fit in with what your business or is something you know you'll never become really good at. As a result, your company becomes the proverbial “Jack of all Trades and Master of None.” Your customers can go anywhere to get the products you sell. If you’re just OK at it, then it becomes a matter of price. You can’t become great when you’re dealing on price.

Plan Your Growth
Don’t let your company evolve. What do you want your company to look like in five years? How are you going to get there? What will you need for people, equipment training, cash requirements etc.? What will you accomplish this year? Next year? The year after that? Does every step of the process fall within the three areas outlined in your hedgehog concept? If it doesn’t, go back and rethink it. Review your plan often and make sure you are always moving towards your goal.

Change or Die – What Will You Do?
Making changes in your company is not easy. If it were, everyone would be doing it. We go into it with good intentions but will it really happen. Our nature would say now. In a Fast Company Magazine article titled “Change or Die,” Dr. Edward Miller addressed this issue. He discussed people who had severe heart disease and were told that they needed to make dramatic changes in their lifestyle or deal with pain, surgery, or even death. Now that’s a true life-and-death choice. Even with this news, very few people change. Within two years bypass surgery, 90% have not changed their lifestyle.

Many of you have received this kind of news over the last year. You need to make changes or die. You already know some companies in your market that got the same news, and chose not to change. They didn’t make it. Don’t let that happen to you. Plan your changes and make them happen. If you’re already struggling, that’s telling you something that you’re doing isn’t working. Also, remember that change isn’t easy. You can’t tell your employees once that you will be changing and expect them to get it. You need to be telling them over and over again. I recently had a company owner ask me “Do I need to babysit them?” Well, call it what you want, but you need to create a new culture in your company so that the new changes become a part of the fiber of every person in your company. This doesn’t happen overnight. Be persistent!

2009 was a tough year for many, and 2010 is stacking up as a year where many are re-inventing themselves. As I said, if you are only OK at what you do, then you will be stuck in a price battle and you can’t be great being the low-price guy in your market. You can make the changes instantaneously but start to plan and implement the changes today. Take the time to find your hedgehog. What is it that you are really passionate about, you can be the best in your market at, and can drive the economic engine of your company, then start moving in that direction. This may mean that you continue some of the things that you are today in order to fund the changes and/or growth, but if that activity doesn’t ultimately get you where you need to go, plan when you will eliminate it.

There is a lot more to becoming great. I highly recommend your reading Collins book. Find your hedgehog as well as everything else that goes into becoming THE company that your customers are looking for.

If you need help putting together a plan for your company, consider attending one of our three-day Basic Business Boot Camps. Check the schedule of dates and locations on our website.

You can also register to attend a FREE live webinar to learn more about the program. Choose from one of the scheduled dates or request a date that works for you. Upcoming scheduled dates are: May 7 at 10 AM (CST) and May 21 at 10 AM (CST).

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Following up on Sales Leads is Critical

So far you have done it all perfectly. You have explained what a Qualified Sales Lead is to your technicians and you have role-played with them over and over again to be sure they know what to say and how to say it. You know that your techs should be turning at least 12% of all the service calls they go on into a Qualified Sales Lead and, based on the statistics from ProfitMaxx, most of them are doing it. You have fully trained sales people who go to the appointment and the presentation is made. So far, so good! The system is working as planned.

As we all know, some customers are closed on the spot, but some customers want to “think about it” before making a decision.

Now it’s time to ask the important question. After the presentation is made, and you have left the customer's home, do you call back? That sounds like an obvious question, but it’s not. I am finding a huge number of company owners and/or sales people making the initial sales presentation but never -- or at least seldom -- calling the customer back. The thinking is that if the customer is interested, they will call you. Guess what, most won’t!

When it comes to collections the squeaky wheel gets the grease. The same theory applies to closing the sale. Take a close look at the following statistics and see where you fall in the process, in terms of persistence.

Sales Statistics:

How often do most sales people follow up?

48% of sales people never follow up with a prospect
25% of sales people make a second call and then stop
12% of sales people make three contacts and stop
Only 10% of sales people make more that three contacts

The fruit of following up:

2% of all sales are made on the first contact
3% are make on the second contact
5% of all sales are make on the third contact
10% are made on the fourth contact
80% of all sales are made between the 5th and 12th contact!

If persistence important? You bet it is! You have invested a significant amount of time, energy and money to gain the opportunity to make a sales presentation to your customer. Be sure to finish the process -- finish the race! If you don’t finish the race, it’s as if you had never run. The fruit of training your techs to create those Qualified Sales Leads is in the sales that are actually made. Complete the process; don’t drop the ball before the entire cycle has been completed. Doing an outstanding job of tracking your techs productivity is useless if the process is not completed on your end. Make it happen!

If you would like more information on the ProfitMaxx software give us a call at 1-800-432-7963 and/or register to attend a FREE webinar to learn more about ProfitMaxx. Upcoming scheduled dates are:

May 7– 10 AM Central

May 21 – 10 AM Central

You can learn more about this company-changing program on the ProfitMaxx pages on our website.

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Selling With Style - Blending Buying Styles

Everyone is a sales person. Everyone is selling something every day.

Every one is a salesperson. You, your techs, your dispatcher, your installers, your bookkeeper, and your customers. Yes, that’s right -- even your customers. Everyone is a salesperson and everyone is selling something every day.

Research conducted by Target Training International, LTD has conclusively proven the following statements to be true:

People tend to buy from salespeople who have behavioral styles similar to their own.
Salespeople tend to sell to customers who have a behavioral style similar to their own.
Salespeople who are aware of their own behavioral style and learn to “blend” with their customer’s style are able to increase their sales.

The “Ford” or the “Pontiac”
A Pontiac salesperson, with a High S behavioral style (for a review of the four styles, review the last few eNewsletter issues) was showing a new vehicle to a couple. Knowing the DISC language, the salesperson realized both husband and wife had High C behavioral styles. The couple expressed immediately that their desire was to buy a Ford, but merely wanted some information on a comparable Pontiac model. The salesperson did not “push” them in any way, but simply offered them the information they requested. Knowing that they were going to the Ford dealership up the street, the Pontiac salesperson recommended them to a Ford salesperson, who was a High D and did NOT know the DISC language.

Why? The salesperson was hoping the High D would be “pushy” with the couple and they would then come back and buy the Pontiac. Just as the Pontiac salesperson predicted, the High D salesperson was pushy and tried to close the deal immediately. After a few days of gathering more information, the couple came back and bought the Pontiac.

I realize that you may feel like this couple was manipulated. The point of including this true story is this: whether we like it or not, people buy from people they like! They liked the laid-back slow-paced Pontiac salesperson and did not like the fast-paced, quick-closing Ford salesperson. The salesperson was more important than they brand of vehicle.

How many sales do we lose because of not “behaviorally” treating the customer properly? People buy from people they like! The problem is; what do they like?

Some buyers:

Like you to be direct.
Like you to have fun
Like new products.
Like proven products.
Like a lot of data.
Like to be touched.
Like personal talk.
Like time to think.
Like to negotiate.
Like showy products.
Like traditional products.

…and some DON’T!

If you, as the salesperson, don’t understand behavioral styles and do not have a good knowledge of the DISC language, you are saying goodbye to your valuable sales dollars. The single, best way for a sales manager to increase sales dollars and customer satisfaction is to train the sales team on the DISC language.

There are three steps to Selling With Style:

Know your own behavioral style.
Know your customers behavioral style.
Blend your sales style to eliminate tension in the sales process.

Know your own behavioral style
Over the last several months, we covered the four styles of communication. (Again, if you need a review of these four styles, you can review those articles on our website.) If you still have not figured which of the four styles you are, you might want to consider completing a behavioral assessment yourself. To do this send me an email and receive a behavioral assessment at 50% off the normal price.*

Know your customers behavioral style
With a little practice, you can easily recognize behavioral styles of others. Going into any interaction with others will significantly change the conversation.

This method, if used properly, can show you your own behavioral style and that of your customers. If you know someone who knows your potential buyer, ask him/her a few questions. If you are meeting that person face-to-face, a few quick observations will answer the same questions.

Is the person outgoing or reserved? The outgoing extroverted individual will be either a D or a I. The reserved, introverted individual will either an S or a C. You can observe the individual and watch how they move and communicate. Do they move around a lot? Are they more animated as they talk?
Is the person “People” or “Task” oriented? People who are High I or High S will be people-oriented, while those who are High D or High C will be task-oriented. Listen to the words they use. Do they use phrases like “Prove it to me,” “The numbers don’t show that,” “The facts are clear,” or other task/fact/number- type words, this is a clear sign that they are task oriented. If they use phrases like “I don’t feel comfortable that,” “That sounds good,” “I’m a little uneasy with what you're telling me,” or other feeling or personal phrases, this is a clear sign of their people orientation.

Once you have answered these two questions, you can determine their style. If you have a feeling, outgoing person, they will be an I. If they are a reserved, fact-focused person, they will be a C. Change your style of communication to match the style of your customer, they will feel much more comfortable with you and will feel that you understand them and can relate to them. The end result – selling with style!

This isn’t Manipulation
Remember, people want to buy from people they like. They are not comfortable and won’t be satisfied with their interaction with you if your style rubs them the wrong way. You’re simply adapting your style to match theirs and make them feel more comfortable with you.

If you want more information about identifying the four styles, we can help. Bill Kinnard is a Certified Professional Behavioral Analyst and has years of training and expertise in this area. We are giving you a free download from our Small Business University by Roger Dawson titled Contractor Personality Types Part 1. In this program, Roger will describe the (4) four types of personalities most contractors possess. During this presentation, he will help you determine which group you belong in and how to overcome the weaknesses you may identify. To get this free program, visit the eNewsletter area of our website.

Next month, we’ll take a look at the buying styles of the four different behavioral styles. Learn these and watch your sales grow.

*Limit one assessment at 50% off the normal price per company. Normal price is $85.00; discounted price is $42.50.

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Coaching and Retaining Your Talent

By: Bruce Lee

Description of the Presentation:
Your people are your greatest asset. When employees work at peak performance it affects the bottom line in a very positive way. The key is knowing how to properly coach team members which will in turn increase efficiency and reduce turnover.

Key Points:

Coaching is helping others to develop insights and actions to understand mutually understood goals. Coaches help employees identify, development and grow their present and potential strengths.

Three objectives of coaching
• How to encourage employees to improve
• How to help them solve problems
• Understand what motivates them

How to retain talent?
• Improve enthusiasm for what they do
• How to move their careers along

S.A.M.
• Set high expectations – Set the goal and measure against it
• Appreciation – When we give appreciation it tells employees we appreciate what they have done.
• Make a difference – Treat them like they are already what you expect.

Eight (8) Steps of Coaching:
1. Total support of the person
2. Identifying the big picture from all angles
3. Determine the impact of individuals behavior and attitude
4. Help them create the plan
5. Create a sense of commitment
6. Get started
7. Understand the consequence of their actions
8. When to give up!

Reward what you want repeated!

The Small Business University features a new trade focused audio presentation every month. These programs are designed to provide the trades contractor relevant information that can help their business immediately. Get more information on this program or sign up for a monthly subscription today!