Grandy

By Nancy O’Hare-Zika

As the General Manager and Marketing Director at Swick Home Services, I was often tasked with the organization and promotion of our Service Partner Plan. We called ours the “Gold Star Service Plan” but, regardless of what you call it, it is essentially all the same.  An SPP is a mutually beneficial partnership between your company and your customers.  Typically the customer will pay an annual fee to be a “member” and will in turn receive special discounts, priority scheduling, reduced or eliminated afterhours fees, and a routine cleaning and inspection of the home’s heating/cooling equipment.

A program like this assists you and your team with filling the schedule during times of low call volume and puts you back in the driver seat by allowing you to put calls where you need them in order to keep the schedule running smoothly.  Some people spend an enormous amount of time deciding what they are going to charge for this membership, which is why pricing seems to be the question I am asked most about SPP’s…and my answer?   FREE!   Okay … maybe not FREE, but it’s important to note that if your concern is about “covering your cost,” you may be thinking about the purpose of Service Partner Plans (SPP) all wrong.

The number one goal of an SPP is simple:  GET YOUR TECH IN FRONT OF THE CUSTOMER!  The job of the marketing department is to get the tech in the door … it is the technician’s job to WOW that customer.  Of course, while the technician is in the home, they have the opportunity to “sticker” every piece of equipment in that home.  Anyone that enters the home of one of ‘your’ customers should know EXACTLY who has provided service in that home. This is important especially if the home changes owners.   Your company will most likely be first in line to service that equipment in the future.

I felt so strongly about this added exposure that I gave away more SPP’s than were sold.  Any time someone was sent my way, soliciting a donation for whatever cause, they received a nice package that contained information about our business, a magnet, information about the SPP, and a gift certificate for a free year of the program.  School events, medical benefits, and community events … if I was asked for a donation, that is what was given.  We gave a free year for every new piece of equipment installed AND we gave a “share with a friend” certificate as well.

Additionally, I created a “New Home Buyer Packet” that contained a note of congratulations to happy new homeowners, some information about our company and the services we offer, a fridge magnet, and a gift certificate for a one year SPP. Each quarter, I would make the rounds to the most popular agencies and dropped off a bundle of new packets and I always included several for the realtors themselves. We encouraged the realtors to create gift baskets to be presented to each new homeowner at closing and even allowed the realtor to fill out the certificate themselves, making them the hero and gift giver. We didn’t care about who took credit for the gift; we just wanted the new customer.

This simple shift in how we managed the SPP’s obviously increased the total number of plan participants, but also served as a key component for a $1 million sales increase that year.  Changing your mindset of how you manage your SPP program can be a simple revenue builder and may be an untapped fountain of opportunity.

by Tom Grandy

Kenny Chapman recently presented an outstanding live webinar to our Advantage Members.  During his presentation he made the following statement. “If everything is the same, price is the deciding factor.  If nothing is the same, price is never the deciding factor”.

I am going to give you a moment to read that statement again, then encourage you to think about the ramifications as you ponder how you sell products and services.

What kinds of products are sold on Amazon?  Right … commodity items.  Why do millions of people buy on Amazon?  Answer, since the item they desire to purchase is a commodity item (meaning lots of organizations offer the same exact item) the deciding factor is price … right!  Since Amazon has been around for many years it has established the reputation of being the “least expensive” place to buy an item online.  If you happen to be a Prime Member (which I highly recommend) most items are free shipping as well.  Face it,if you want to physically purchase an item based on price, you go to Walmart.  If you want to buy online you go to Amazon. Again, why?  “If everything is the same, price is the deciding factor.”

Think about what your company offers.  If you are a plumber, HVAC, electrical or any other trade’s contractor the basic equipment you sell is pretty much the same as other contractors in your industry or town.  If you offer basic equipment based on price, that item just became a commodity, so guess what?  The customer’s decision on who to purchase from is now based on price, period!

“If nothing is the same, price is never the deciding factor.”  Think about it.  How do you compare two items that are totally different in color, function, and/or benefits.  Bottom line you can’t so the buying process has now shifted from being a commodity decision (based on price) to deciding if the offering meets and exceeds your expectations.  The offering can become unique (no longer based on price) in lots of different ways.  Let me list just a few:

• Description of Installation Process – Keep in mind most customers know little how you will physically replace their equipment.  One quote might say “Replace old XYZ with brand new ABC.”  That is simple and to the point but very commodity (price) based.

What would your reaction be if you read or the sale person explained the process like this:

• Our truck may be parked in your driveway or in front of the house, your preference
• Before entering your home our technicians will place booties on their shoes (so we don’t mess up your carpets.)
• “Clean” drop cloths will be placed from the front door to the point of installation
• ABC equipment will be professionally installed by one of our factory trained certified technicians.  All technicians are required to have at least X number of technical training hours per year.
• After installation the equipment will be thoroughly tested to ensure its proper installation prior to leaving.
• The homeowner will be totally briefed on how the equipment is operated with written instructions provided if necessary.
• The old equipment will be properly and environmentally disposed of at no cost to you.
• Once installation is completed the entire area will be vacuumed with the objective of leaving the area as clean as it was found if not cleaner.
• Office Records:

1. All your equipment information (date installed, make, model, serial number, etc.) will be entered into our state of the art computer system.
2. When maintenance is performed or future repairs are made, all records will be maintained as part of your complete equipment history.
3. ü  You will be notified the month BEFORE your warranty expires to allow us time to make any repairs (if needed) while your equipment is still covered.Happy Call – A few days after the installation has been completed you will receive a phone call from our Customer Service Representative to be sure everything is running properly.  If you have any questions we encourage you to write them down so they may be answered at the time.

• Our technicians take full responsibility for each installation they perform.  Should there be a problem, necessary tweaks or adjustments needed to the equipment, the same technician that installed your equipment will return to your home. We believe in personal accountability!
• One last item.  We are fully insured so in the unlikely event of an accident our employees and their work are fully covered.

Ok, which quote was unique and which one seemed professional to you.  Same equipment but one is being offered based on price, the other provides extra value for the same equipment … and likely at a higher price with increased profit!

• Price Includes Additional Benefits – Become totally unique by offering additional benefits others do not. What about changing out smoke detector batteries or if you are a plumber, throwing in a set of stainless steel hoses for the washing machine (originals only last 3-5 years).  I remember a competitor getting the contract for siding and trimming an entire house because he was going to “recondition” the customers awnings.  Translated, he was going to paint them!  You get the idea; offer something other contractors (selling the same equipment) do not offer.
• Offering a Variety of Add-On Options – It’s amazing how many customers would have purchased one or more add-on items if someone had taken the time to explain their benefits.  Better yet, include some of these add-on items in the original “Best” price (we will talk about Good, Better, Best options in a minute)
• Extending Warranty on Labor – Consider extending the warranty on YOUR labor, free of charge.  Face it, if there were a problem with the equipment that your technician caused you would go fix it, free of charge, right?  So why not extend the labor warranty.

The last point:  A commodity sale basically says “This is the price … do you want it or not?”  However, if your offering is unique, you need to offer choices.  Offer Best, Better and Good in that order.  Always start with the gold offering that covers everything.  Then take away a few benefits on the Better offering and finally offer the Good option, in case price is a major problem.  Most find the average customer chooses the Better option … but not all the time.  Providing one option creates the “take it or leave it” environment.  Multiple offerings (that are unique) provide choice.  Hey, this is America … we want choice!

by Bill Kinnard

Business can be hard enough on a day-to-day basis without wondering how you’re going to cover the bills, the next payroll, monthly withholding payments and every other person, vendor or team member who wants to take every nickel out of your bank account. A Hill & Valley account can make your life a lot easier during those slower times of year. Here’s how it works. Part of the monthly budget – yes you need a monthly budget – should be a payment into the Hill & Valley account. Treat this payment with the same urgency as the rent, your utility bill, or a payment to your suppliers. Some call this a rainy day fund. Dave Ramsey says his grandmother used to tell him he needed a rainy day fund. When he replied “well that’s not a very positive attitude”, his grandmother told him “I’m positive, it will rain some day!”

The H&V account should be in a separate account. Don’t let the money sit in your checking account. The law of money says that every significant budget can and will absorb every dollar that you make available to it. YOU HAVE A SIGNIFICANT SIZED BUDGET! If you leave the money in your checking account, it will disappear. There is always just one more tool that would make your job easier. Keep your eye on the ball. Don’t get distracted. This is a cash flow budget item. Transfer the dollars to a different account. There is not profit at the end of the month until after this payment has been made. On months where you are slow and there is no cash coming in, you can pull the money out of the H&V account to maintain your cash flow and stay current. When the profit returns, do everything you can to replenish your H&V account.

Here are five benefits to establishing the H&V account.

1. There Will Be Slow Months – Just as Dave Ramsey’s grandmother said “I’m positive, it will rain some day!”, I am just as positive you will have slow months. You have those times of year when the cash in just doesn’t equal the cash out. During these months you can draw funds out of your H&V account to make up the difference. Again, be diligent about replenishing the H&V account  on your first profitable month.
2. Evens Out Cash Flow – if you have funds available to make up the shortfall on negative cash flow months, you even out your cash flow. You know how frustrating it is when you get behind one month and then spend the next three months digging out of the hole. It’s a different mindset repaying yourself then owing your suppliers or vendors and dealing with past due calls from them.
3. Puts Your Team At Ease – whether you realize it or not, your demeanor changes when you are under the stress of dealing with the day-to-day cash flow struggles. Your team sees this and their performance changes along with your change in demeanor.  When you’re tense, they walk around on egg shells. They will be tentative about taking ownership of their role for fear of having to deal with the ramifications of a wrong decision on their part. As a result, productivity suffers.
4. Gives You More Confidence In Running Your Business – Life changes when you are not worrying about every penny and where it is coming from and where it needs to go once it gets here. You will make wiser decisions when it comes to moving your company forward along its path of growth and increased productivity. When you are stressed by cash flow struggles, you tend to have to micromanage every aspect of the day-to-day business. When you micromanage, you become the lid – the limiting factory of your company. It cannot grow beyond you. You have to be comfortable with the leaders you have trained and let them run.
5. Lets You Sleep At Night – you have enough to deal with in running your business. When the day is over you need to go home and enjoy your family. You can’t live to work but instead, you need to work to live. There are far more important things in your life than working. I don’t know of anyone who was on their deathbed and said “I wish I had spent more time at the office.” Life is short. Being able to go home at the end of the day and enjoy your family, getting a great night of sleep so you can function at a high level has tremendous benefits. Be intentional about getting to this point.

At the end of the day, monies that you deposit into your Hill & Valley account will be allocated as profit when it comes to your profit and loss and you will pay taxes on those profit dollars but this is not about accounting. This is about being able to run your business on a day-to-day, month-to month basis. You will have those slow cash flow months. Plan ahead to be able to walk through them with ease.

By Tom Grandy

Quick question – what do you currently purchase that you don’t know the price of ahead of time?  Did you buy tires without knowing the price?  Were you surprised at the price of your ice cream cone when you got to the counter to pay?  Have you been to Walmart lately?  Did you wait in the checkout line wondering what each item in your basket cost?  Of course not!  Everything you purchase you know the price before you purchase.

Now for another quick question – What is the only industry that does not tell the customer the price before work is performed?  You got it … the trades industry.  We tell the customer we will fix this or that and by the way Mrs. Jones you will find out what we charged you when you receive the bill the end of the month!  What if the eventual bill is more that Mrs. Jones thought it would be?  Now we have an unhappy customer that, by the way, may not call us next time.  What if Mrs. Jones was billed is more than she can afford?  Now the company has a situation where they may not get paid … and they lose a customer.

The reason the rest of the world prices all of its goods and services is so the customer can make a value judgment BEFORE they purchase.  If the price is acceptable to the customer, they buy the item.  If not, it stays on the shelf.  Shouldn’t we in the trades industry do the same?  Shouldn’t we take the worry out of shopping by telling the customer the cost of the repair BEFORE they agree to have the work done?

Flat rate pricing is gradually becoming the standard of the trades industry partially because of what I just shared.  The customer wants to know what their investment will be before they tell us to do the repair.  Decision Analysis performed a customer survey several years ago.  They asked customers if they preferred being charged by the time and material method or by flat rate pricing.  The answer was 91% preferred flat rate pricing.  Are you listening?

There are several advantages to you and your company when using flat rate pricing:

• The customer no longer “sees” your hourly rate – all they see is the price of the job.
• Customer complaints are typically reduced by over 90%.
• Receivables improve because the technician can (and should) collect monies right at the job.  There is no calculation to be made. The total price is in black and white in front of the customer.
• The technician is less likely to under bill the customer.
• When you need to raise your hourly rate you simply reprint the manuals.  There is no announcement to your customer base and no one knows a change has taken place!

There is another huge advantage to flat rate pricing.  It’s the perfect system to sell maintenance agreements.  The normal repair price is shown and the reduced price for maintenance agreement customers is printed right next to it.  The maintenance agreement customer normally receives a 10%, 15% or 20% discount on any additional materials and labor needed throughout the length of the agreement.  The customer can see their potential savings on the current repair if they purchase an annual maintenance agreement on the spot.

Isn’t it about time you considered moving towards flat rate pricing?  After all, your customer wants to know the price before they purchase.  Knowing the price ahead of time will cause Mrs. Jones to go about her business rather than watching you while the repair is being performed.  Why watch?  The price is now firm so she doesn’t care if it takes the technician 30 minutes or three hours since her price was quoted before the job was done.

by Tom Grandy

Remember the old days.  Democrats and Republicans would fuss and fight all day long and eventually, through some give and take, come to a mutual agreement on an issue.  That night they would all go out to dinner together.  Not today!  It seems like there is an automatic “no” if either side comes up with an idea and the process of negotiation (for the mutual benefit of the country) seems to have vanished.  The latest polls I can find show the overall approval rating for Congress is 24%.  To be honest, that is higher than I thought it would be.

Two comments from having lived a very long life:

“If the husband and wife are exactly alike, one is unnecessary”

“Only worry about things you can change!”

Short of electing new members to Congress (which isn’t a bad idea) there is little the average American can do about changing how Congress thinks and acts.  Again, worry about things you can change.  Ok, the intro is over, now for the point.

We need different opinions.  If the owner had all the answers they would not need accountants, lawyers, department managers, or even input from their technicians.  However, no one has all the answers so we need each other’s opinions.  That is how we live, grow, and get better.

Below are a few suggestions to consider when it comes to gathering ideas from others concerning your business.

• Quarterly Company Meetings – Once a quarter have a company meeting.  Ideally make it a dinner meeting (for which the company pays).  Use it for two purposes:

1. Give a State of the Company address. Let the entire team know how the company is going from a profit and loss standpoint and what plans are going to be instituted over the coming months.
2. Have an open discussion of positive ideas for changing the company, systems, etc.  You might even want to give a prize or prizes for the best ideas.

• Suggestion Program – This can be a formalized system to receive written suggestions from ALL employees on how to improve the company.  If it saves the company money…..share a portion of the savings.
• Weekly Tech Meeting – Weekly meetings keep the communication channels open with the opportunity to discuss concerns and/or ideas.
• Create a Customer Board of Directors – Your customers are your company so it’s always good to get their input.  Create a Board of Directors made up of residential and commercial clients.  Hold quarterly or twice a year meetings around a nice dinner.  Ask for input on ways to improve any and all areas of the company.
• Create a Professional Board of Directors – Same idea as the Customer Board of Directors.  The difference here is that the Board is made up of professionals.  Include your CPA, banker, lawyer and/or any other professionals you associate with.
• Join a Mixed Group – Without exception this one thing can have a more positive affect on your business than anything else you could be part of.  The groups are usually made up of 4-6 similar companies in non-competing geographic areas.  They usually meet 2-4 times a year rotating from one contractors business to another.  Part of the two day meeting involves all team members evaluating the company they are visiting.  It can be painful (like joining the service) but like joining the service it is usually something you will later be very glad you did.
• Have an Outside Consultant Evaluate Your Company – It’s always good to have fresh eyes look at your business.  Outside consultants will be very frank with you and will make suggestions for change that will benefit your company.
• Listen to Your Wife – Sorry guys but this is important.  Women have a God given ability to sense trouble before men do.  Your wife will “sense” when there is a problem.  They may not know the exact core issue but they can sense it is there.  This is even more important if your wife works within the business.  She will see and know what’s going on and can provide valuable input.

Ok, these are ideas.  Now it’s time for the really hard part.  Swallow your pride and actually do something about the issues that came up.  If you need to negotiate like Congress is supposed to do, that’s fine.  Remember, it is not about you personally.  It’s about making the company better for everyone’s benefit.  If you will do that, I’ll bet your approval rating will easily surpass Congress at 24%!

By Tom Grandy

Do you struggle with keeping your employees happy and fulfilled, which is often called motivation? The general feeling is that simply paying more will produce happy employees. Well yes, good pay does attract top technicians. However, there is more to it than that. Employees do apply for a job because they need a paycheck or perhaps a better paycheck but they stay long term because they feel loved, they feel like family.

That’s right, the most successful employers tie their staff to them emotionally! So how can you do that? Here are a few tips to consider:

• Family Fun – Let’s face it. Many of today’s workers have not had or don’t have a stable home life. The office “family” is very important to them. Make it a fun place to work…..lighten up a bit.

• Sincere Appreciation – Everyone wants to be appreciated. Make it a habit to provide some sort of positive appreciation for each employee each week. When you feel appreciated it provides more of a “family atmosphere” which we all like to be part of.

• Spontaneous Rewards – Occasionally gift employees $10 or $20 cash for a great customer review or perhaps drop a pizza by the job, unexpectedly. We all want to know we are thought of for no particular reason. Small gestures count.

• Company Recognition – Use weekly staff meetings as an excuse to single out specific workers for sincere praise.

• Public Recognition – Many employees (and their spouses) suffer from low self-esteem. Think about giving each of your workers their very own personal business cards and a Profile Page for each employee on your company website.

• Accountability – That doesn’t sound like fun but it’s true. The best people welcome the opportunity to shine! Set goals and celebrate when individuals (and the company) hit those goals. Technicians are competitive by nature. The good ones want to be measured and they want you to know they are doing a good job.