Archives for June 2020

3 Smart Tips for Maintenance Agreement Pricing

Today, lots of contracting companies view maintenance agreements as an effective way to earn ongoing business from customers. While the jobs generated by these agreements aren’t generally significant bread-winners, they can involve steady profit, which is important.

In our contractor company training, we teach that the key to a successful maintenance agreement is coming up with correct pricing and sticking to it.

With that in mind, here are three quick tips for establishing your maintenance agreement pricing.

1. Make it a team effort.

First things first: Pull your team together.

Whatever you do, don’t make decisions about your maintenance agreement pricing on your own. For best results, you need to involve your team on decisions.

Ask for their thoughts on:

• What you’re going to offer
• What tasks you’re going to perform (including preventative maintenance agreements)
• If you’re going to provide a maintenance agreement
• And more

To decide on these things, get the team together and ask for their input. After all, these are the people with boots on the ground. They have a right to toss their two cents into the pot.

Getting team buy-in here is going to do a couple of things

First, it gets everybody on the same page, and it ensures that your entire team is going to perform the same maintenance agreement, regardless of who’s doing the work.

Second, it means your team will be doing the job the way they should, and that customers will be happy with the services rendered.

2. Decide how much time it’s going to take.

Next, you need to establish a timeframe for your maintenance agreement pricing. Remember, you have to be realistic about this. You want to think about how long it will actually take to perform each of these tasks, not how long you wish it would take.

This step is critical.

If your team determines that the maintenance agreement should take an hour of wrench time on the job, and techs are getting it done in 45 minutes, you have to ask what the techs are skipping. While it might seem like saving time is smart, keeping your promises is the most important thing. If you agree that your team will perform specific tasks, coming up with a timeframe in which to complete them is a necessary accountability metric.

Since this metric may change over time, don’t hesitate to revisit this conversation routinely.

3. Order the tasks.

Finally, look at the list of tasks that you developed and decide if there is a proper order in which to do them. This is important for many reasons. Mainly, it helps create an order for your techs so that everyone does the jobs in the order that makes sense. It also helps avoid mistakes and errors born from rushing through things.

In some cases, certain parts of the work agreement have to be completed before the others. Make sure your team agrees on what order to complete the tasks in. It may take some time to finalize the order of the tasks, but you have to take the time to get it right from the start. This is especially important in preventative maintenance settings.

Ensuring Maximum Profits for Your Team

In our contractor company training courses, we focus on helping contractors run profitable, reliable companies. One big part of that is coming up with accurate and intelligent maintenance agreement pricing. Even if you’ve struggled with this in the past, it doesn’t have to be as tricky as it sounds. By following the three tips in this post, you can develop maintenance agreement pricing that truly works for your team, your customers, and your business.

To learn more about contractor company training, contact us today. We’ll be happy to help you find the courses you need to run a profitable contracting business!

5 Customer Buying Principles You Need to Know: Principle #1

How does a customer decide on their preferences? Do they come to you with their preferences already defined, or does the way you interact with them have something to do with it? What if we told you that customer buying preferences are shaped by the options you present to them?

In all of our HVAC business training, we cover five customer buying principles that you need to know. This is principal #1.

Here’s what you need to know.

A Brief Overview: The 5 Customer Buying Principals

When it comes to your relationships with your customers, five distinct principles impact the buying pattern. Each customer goes through all five of these steps in the process of making a buying decision, whether that decision is large or small.

The process is always the same. The only thing that differs is how quickly a customer moves through the cycle.

If you’re deciding where to get dinner tonight, for example, you might come to a decision very quickly. If you’re deciding on which new car to buy, though, or where to purchase an investment property, you’ll spend more time working through the principals.

No matter where a customer winds up, they always start at square one: with the first buying principal.

The First Principal: Customer Preference

The first principle in the five customer buying principals is this: a customer’s preferences are shaped by the options your company presents them. This makes perfect sense when you think about it.

If a customer is coming to your HVAC company, they probably don’t have a vast knowledge of the HVAC industry. They know enough to know they need service, but they don’t know what that means exactly. So they’ll ask for your opinion, and then base their decision on the information you provide them.

From a business perspective, this is critically important to you. In fact, it should shape the way you format your customer proposals. After all, customers can’t buy what you’re not offering. If you aren’t telling your customers about all of your available products and services, there’s no way they can interact with them or form an opinion about them.

While this may sound exploitative to some HVAC professionals, there’s another way to look at it.

Your HVAC customers see you as an expert in the industry, and they trust you to offer an honest recommendation. So do just that.

When you do, you can cater to their needs for information. By giving them information about your various products, goods, and services, you’re helping them gather facts and establish a preference.

Without you, it’s tough for buyers to know what to do.

HVAC Business Training Can Help Your Customers

In light of customer buying principal #1, you have a duty to your customers. It’s your job to educate and inform your customers so they can start to form their preferences.

Throughout this process, you have to ask questions and listen carefully. As you do, you’ll start to understand what’s important to your customers, and how you can cater to them as effectively as possible.

No matter what, don’t judge your customers prematurely. Until you’ve spoken to them, you don’t know what they want or need. If you make this mistake, in the end, you’ll only hurt yourself and make it harder to deliver what they need.

With the right HVAC business training, you can help your customers, enhance your authority in the industry, and grow your contracting business the way you deserve.

If You Eat Too Much Cheese The Trap Will Spring

By Tom Grandy

If there is more than one child in the family, there is a high probability they are significantly different.  Their demeanor, intellect, and perhaps athletic ability differ, often a lot.  When it comes to handling money, the differences are readily apparent.  It’s their birthday.  Each receives five dollars from an uncle or aunt.  One child immediately places the money in their piggy bank.  The other child waits perhaps five minutes before requesting someone take them to the store so they can buy something with their new found wealth.  Neither is a big deal until it’s time to go on the family vacation.   During the vacation both children find items they wish to purchase.  One has the money and one does not.

Entrepreneurs are like children in some ways.  Let’s look at two of them.  Each had an idea and started their own business.  Both are successful. 

Entrepreneur #1 is wise and builds their business on the rock.  He or she takes a minimum salary and saves profit in order to reinvest in the company as it grows.  This person uses discipline and limits their debt with the mindset of becoming totally debt free as soon as possible. 

Entrepreneur #2 builds their business on the sand.  Any extra money they make is immediately sucked out of the company via increasing their salary, buying toys (boat, place on the lake, etc.) and/or buying that larger house in the better neighborhood.  Buying trucks and equipment is a snap.  The owner simply calls the banker who immediately approves the loan.  Things slow down a bit so cash flow is tight.  It’s time to draw on that line of credit again…until finally it’s maxed out.  Then there’s those pesky suppliers.  They are always wanting to be paid.  Hey, we are only 60 days behind so what’s the big deal?

Both businesses look good to the passer by.  They are growing, have great reputations for doing quality work, and the owners are well respected in the community.

One day it begins to rain.  Rain can come in many forms in the business world.  Sometimes it’s literally raining, day after day, and production gets behind.  Sometimes the bank the company has used for fifteen years gets bought out and the new bank requests (requires) you pay off the line of credit within 30 days.  Sometimes huge rain storms come in the form of national economic collapse like 2008 and 2009.  And guess what?  Sometimes the storm comes in the form of a virus.

Storms will come in one form or another.  The question is not whether the storms will come, that is a given.  The real question is whether your business is built on a rock or on sand.  One will survive the storm, the other may not.  No matter what form the storm may take, the way out is ALWAYS paved with cash.  No cash – no path!

Think about a mouse trap for a moment.  In this scenario the mouse trap represents cash flow in your company.  Cheese represents real cash in the bank.  You, as the owner of the company, are the mouse.  Cash flow issues, no matter the cause, are always a danger just waiting for the company to run out of money.  The trap is set and ready to be sprung.

Remember in this example the cheese represents cash.  As long as the cheese (money) isn’t touched, the trap will not be sprung and cash flow problems are held at bay. 

The owner is the mouse.  As long as the mouse leaves the cheese (profits of the company) alone, all is well.  Cash flow problems are still a danger but they are not causing a real problem as long as the cheese is not touched.

Now, let’s assume the mouse (owner) can’t fight temptation.  He has read the instructions on the mouse trap and realizes the trap is safe as long as it is not significantly moved.  The mouse (owner) really wants some cheese (cash) (it’s a small boat and the family will love it or perhaps it just another small withdrawal on the line of credit).  The mouse (owner) is very careful not to overly upset the trap.  Wow, that cheese (cash) tastes pretty good and besides there weren’t any serious consequences to the additional debt (just a small bit of cheese (cash)).  The mouse (owner) takes another bite, and then another and before long the trap is sprung!  Boom, cash flow becomes critical and the money isn’t there.

There is nothing wrong with enjoying the fruits of your labor.  You should, you worked hard to get to that point.  The lesson is to not eat too much of the cheese (cash).  Realize the cash flow trap is ALWAYS set.  Eating too much cheese (cash) will spring the trap and once the trap is fully sprung…few mice (owners) survive! 

Grandy & Associates has two great Website Special offerings this month.  The first is our 96-page Company Policy Manual.  This is a critical document for any business.  It details everything from drug testing to vacation policy.  Since it comes in Microsoft Word the user can add, change, or delete at will.  Normally priced at $134.95, this month’s Website Special is only $99.95.

The second Website Special is our Self-Paced Online HVAC Onboarding Course.  This class is designed to familiarize any new employee (receptionist to technician) with the basics of HVAC.  This eight-hour class is normally $299.95, but it’s being featured this month for only $279.95.  

If You Can’t Take No for an Answer Don’t Ask

By Tom Grandy

Take a trip down memory lane when you were little.  There was something you wanted to do or perhaps purchase.  You were a wise little person, so by this time in your life you had learned which of your parents was most likely to grant your request.  With that knowledge in hand, you knew who to approach in order to receive the answer you most wanted to hear.  Most of the time it worked.  However, sometimes the answer was no.  What was your reaction?  Being a mature little person, you politely replied with “Mom, or Dad, I see the wisdom of your answer.  Thank you for making a decision that I am fully aware is best for me.”  Does that sound familiar?  Nope.  You threw a temper tantrum in an effort to get your way.  Sometimes it worked and sometimes it didn’t.

Well, 20 or 30 years later things have not changed a lot.  We still know what answer we want to receive…BEFORE we ask.  The question today is “How do you react when the answer is no?”  Perhaps you could ignore the answer if it were your parents responding but what about when it’s your boss or a customer?  Do you still throw a temper tantrum or do you accept the answer and adjust YOUR way of thinking?  I was blessed to receive teaching from a very wise pastor many years ago.  He made a statement I will never forget.  He said “Men need to think before they act and women need to think before they speak”. 

The message is pretty clear.  Take time to think before you respond.  Failure to think before you respond can cost the company a customer.  Speaking without thinking could also cost you your job. 

When we were children our parents really were responding to us in the way they felt was best for us.  When it comes to your job or working with a customer you may not like the answer they give but it’s not about you.  If you can’t take no for an answer don’t ask the question!

Grandy & Associates has two great Website Special offerings this month.  The first is our 96-page Company Policy Manual.  This is a critical document for any business.  It details everything from drug testing to vacation policy.  Since it comes in Microsoft Word the user can add, change, or delete at will.  Normally priced at $134.95 this month’s Website Special is only $99.95.

The second Website Special is our online HVAC Onboarding Course.  This class is designed to familiarize most new employees (receptionist to technician) with the basics of HVAC.  This eight-hour class is normally $299.95 but it’s being featured this month for only $279.95.  

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