Tag Archives: Matt Michel

1. Completely turn off lights and equipment when leaving at night. Many computers and other electronics are not truly off, but in a standby mode that continues to leak power or vampire energy. 2. If possible, install skylights to take advantage of daylight and reduce lighting needs. 3. Install switch plate occupancy sensors. 4. If electricity is deregulated in your market, check to see if you could get a better rate from a different provider or could renegotiate your rates. 5. Tune-up your building’s heating and air conditioning system. You really can cut utility expense when your HVAC system is well maintained.

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In a classic Lennox dealer meeting video, the Lennox territory manager encourages Dealer Jack to provide training for his technicians.

"What if I train them and they leave?" exclaims Dealer Jack.

"What if you don't and they stay?" counters the TM.

As amazing as it seems, many small businesses hesitate to invest in training for their employees. They would rather retain ignorance than to risk losing competence. The irony is that by training, they do neither.

One of the most technically advanced residential air conditioning companies in the country is Air Conditioning by Jay in Scottsdale, Arizona. Bryce Johnson from A/C by Jay reports that a strong training program makes it easier to hire good technicians. Johnson says technicians want to learn and know that his company provides some of the best training for advanced diagnostics in the area. They seek out A/C by Jay, waiting for an opportunity.

Training helps attract and retain employees, but so does extra benefits and higher pay. For training to be truly justified, it must impact the organization in more ways than recruiting and retention. How effective is training?

Fairfax, Virginia based Cropp-Metcalfe is one of the nation's premier air conditioning contracting companies. Mitch Cropp is a big supporter of NATE (North American Technician Excellence), a technician certification program similar to the ASE program in the automotive industry. When Cropp implemented an in-house training program, the pass rate for technicians who took the NATE certification exam increased 60%.

Granted, this is technical training and a technical exam. Yet the acquisition of knowledge is the acquisition of knowledge. Train your people on service and sales skills and you will also see a boost in performance. Depending upon your starting point, your sales or satisfaction may not increase 60%, but they will certainly increase.

Why implement a company training program? Recruit more technicians and better quality technicians. Boost technical performance and reduce callbacks with technical training. Boost customer satisfaction, sales, and referrals with soft skills training. You need both.

Copyright © 2002 Matt Michel

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Sometimes we make things too hard. Here are some simple things you can do to boost your sales in the new year. Make it a new year’s resolution to implement one of these ideas each week during the month of January.

1. Coach your service technicians to be friendly. Homeowners remark again and again how much they like friendly technicians.
2. Give everyone in your company a business card. Technicians should present them at the start of a service call. People save business cards.
3. Give technicians photo ID badges. Using equipment from your office supply store, it’s simple to create photo ID badges to clip on a uniform.
4. Place mirrors by the call taker’s phone. People can hear a smile.
5. Collect email addresses and send your customers email newsletters. Fill the newsletter with items that will interest your readers (hint: this is not news about your company). Include Internet-only specials.
6. Take digital images of your customers and your work to add credence to their testimonials.
7. Follow up on every service call to see how you performed. Follow up to collect information and to identify future sales opportunities.
8. Give your technicians a supply of breath spray and spray on scent. This is especially important for smokers.
9. Present add-ons and bundles on every repair and quote. Tonight I was upsold by CiCi’s Pizza. Last week, while Christmas shopping, two retailers sold me additional items at the cash register. They were the only two who even asked.
10. Remind people that you are “family owned.”
11. Add your website to every piece of literature you use.
12. Paperclip a business card to every bill you pay, personally and professionally.
Look out for the Buzz on December 19th for Part 2, tips 13-25!

Source: Comanche Marketing. Reprinted by permission.
Free subscriptions are available at:
www.serviceroundtable.com
-- click on the Comanche Marketing tab

Copyright © 2004 Matt Michel

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Is fear paralyzing you or someone you know?

"Fear is the mind killer," wrote Frank Herbert in the novel, Dune.  When people are overcome with fear, they freeze.  They stop thinking.  They stop behaving rationally.  They are paralyzed.

Growing up, everyone experiences points of fear where we freeze for an instant or perhaps longer.  Some freeze at the top of a high dive.  Others freeze when sledding or skiing down a steep slope.  For some, it's facing a fastball.  Many lock up when forced to stand up in the front of the classroom and give a speech or report.

If we try, all of us can remember a point in childhood where we froze, where fear became our mind killer, if only for a few moments.  A degree of fear in childhood is healthy.  Many of us would not have survived childhood without fear acting as a brake against our more idiotic notions.

What's beneficial for preventing an eight year old boy from trying to sail off the roof of his house, using a beach towel as a parachute can be devastating among an adult who is struck by one or more of life's setbacks and freezes, forestalling any act or motion.

I've seen it with the business owner who all but loses his business in a tough economy.  Confronted by a series of setbacks and reversals, he becomes locked in place.  He spends more time on Facebook than prospecting.  He stops trying because he's convinced he can never succeed again.  As long as he's convinced he can't succeed, he won't succeed.

I've seen it with the business executive whose career doesn't pan out as planned.  Rather than try for new career in a new company, he mails it in.  He retires without notifying anyone and each day... just... shows... up.  He's scared to apply with another company.  He's worried that he's too old.  He's afraid he'll have start over.  He's questioning his sense of worth.

Fear has frozen these people in place.  They worry that no move can make things better and any move might make things worse.  Life ceases being a proactive event.  Afraid to change, they do nothing.  They wait for things to happen to them.

The great business philosopher, Dr Seuss, wrote about this in the classic Oh, The Places You'll Go...

The Waiting Place...

...for people just waiting.

Waiting for a train to go or a bus to come, or a plane to go, or the mail to come, or the rain to go or the phone to ring, or the snow to snow or waiting around for a yes or a no or waiting for their hair to grow.

Everyone is just waiting.

Waiting for the fish to bite or waiting for wind to fly a kite or waiting around for Friday night or waiting, perhaps, for their Uncle Jake or a pot to boil, or a better break or a string of pearls, or a pair of pants or a wig with curls, or another chance.

Everyone is just waiting.

Fear has trapped these people in hell.    The only way out is to take action.  Take a risk.  By taking a risk, risk failure.  Risk it again and again and again, if necessary.  The only certainty is success will ever elude those who refuse to reach out for it.

As a child you failed and failed and failed before you learned to walk.  Failure precedes success as naturally as falling precedes walking.  Few men experience one success after another from the outset in a repetitive string of victory.  Most find it only after tasting failure, and usually after much more than a taste.

If you find fear becoming your mind killer, break the cycle.  Take one positive action today, no matter how small.  Tomorrow take another.  Take another the day that.  Progress is made by putting one foot ahead of the other, over and over again.

The mere act of action breaks cycle of fear.  When fear no longer halts you, it no longer holds power over you.  It all begins with one small act.

As Dr. Seuss put it, "Somehow you'll escape all that waiting and staying. You'll find the bright places where Boom Bands are playing."

© 2011 Matt Michel

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In an old joke, two friends are camping when a bear crashes the scene. Both take off, but not before one of the campers snatches his running shoes from a pup tent. As the bear lumbers after the pair, the camper stops to kick off his hiking boots and put on his running shoes.

His friend, looking over his shoulder, says, “What are you doing, you can’t outrun a bear?”

“I don’t have to. I only have to outrun you.”

The running shoes were enough to give the camper a small edge. Sometimes a small edge is all that’s needed.

Towne View Dental Care and Orthodontics in Flower Mound makes teeth whitening a small edge. Patients receive a “custom take-home whitening tray and gel.” The dentists place a value of $495 on this. As long as patients get their teeth cleaned twice a year, they get the whitening gel free.

Okay, for starters most dentists don’t sell the tray and gel for $495. Yet, they do sell it for a couple of hundred dollars, or more.

Since I’ve never had my teeth whitened, I don’t know what’s involved in the creation of a “custom take-home whitening tray.” I assume there’s more to it than the $6.95 football and boxing mouth guards I’ve boiled in water to soften and molded to my teeth by biting on the soft plastic. Still, being generous, I doubt the mold costs the dentist more than $20 or $30 out of pocket. And the gel, being generous, can’t run more than $10 a tube when purchased in volume.

This suggests that the dentist elected to forego any whitening fees he might have collected in order to gain a marketing advantage, a customer retention program, and a repetitive business incentive. I’m sure his competitors probably think he’s crazy for leaving several hundred dollars on the table.

Is he?

How many people opt for whitening when it costs a few hundred dollars? Of those, how many would do business with a competitor if the dentist didn’t make the offer?

I learned about the dentist’s program through one of our vendors. The vendor said that without the six month whitening gel, she probably would visit the dentist annually, if that often. With a $10 tube of gel (a price that’s probably built into the dentist’s fee – ditto for the mold on the initial visit), he’s doubled his cleanings with his existing customers.

He’s also turned his customers into advocates. It’s unlikely our vendor would have promoted the dentist if he didn’t provide the “free” whitening service.

At least one of our employees is thinking of switching dentists purely because of the whitening service. Even though our family dentist is a personal friend, my wife is considering switching.

While other dentists are worried they might be giving up too much, Towne View is focusing on what might be gained. Towne View doesn’t need to outrun the bear, just the other dentists.

Outrunning the competition need not be complicated. One of the women in our office mentioned that she’s got a few light bulbs burned out in her home. She’s short and can’t reach the sockets without a step ladder. Since her husband can barely walk with the aid of a walker, he’s no help.

Because of her husband’s disability, she calls a contractor whenever she needs work done in her home. In the past six months, she’s had HVAC, plumbing, electrical, and landscaping contractors out to take care of one problem or another. I asked if she ever requested one of the contractors to change a light bulb.

“Oh, I wouldn’t feel comfortable doing that,” she says, “But it would be wonderful if one of them would notice and offer to replace one.”

Changing a light bulb? It’s a very, very small edge. Yet, I bet it’s enough to earn a customer for life. Moreover, it would spur a groundswell in word of mouth marketing as the astonished and pleased customer tells everyone she knows about her experience.

The economy may be in a bear market, but you don’t have to outrun the bear. All you need do is outrun your competitors. After the bear catches them, you’ll have more territory and fewer competitors.

Copyright © 2008 Matt Michel
Source Comanche Marketing. Reprinted by permission. Free subscriptions are available at: www.serviceroundtable.com -- click on the Comanche Marketing tab.

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Summer is the time most contractors back off from marketing for new customers. The reason is the phone rings on its own when the mercury spikes north. During heat waves the need to market doesn’t go away, the focus changes. The focus is increasing the average ticket.

It’s not uncommon for the average ticket (i.e., revenue per service call) to fall during the summer. If this happens with your company, you’re leaving money on the table. Here’s how to boost your average ticket during the summer…

Leave Aheads

Most brochures are designed to be left behind. The homeowner is supposed to read and review the brochure and decide to call after the technician has left. Why? Create a series of brochures for the technician to pass out at the start of a service call. Each brochure should focus on one add-on accessory or service in an informative manner. The idea is to give the homeowner enough information to arouse curiosity.

Temporary Air

When an air conditioner is DOA and your installation crews are backed up, the use of temporary air conditioners might save the installation. Save old units from planned replacements that are still functioning or buy dry charge condensing units. Be sure to stencil “temporary air conditioning” in large bold letters on the condensing unit to keep homeowners from trying to turn temporary to permanent.

Service Agreements

A service call is an excellent opportunity to sell a service agreement. While the service agreement revenue should be credited against the maintenance, it still represents an add-on sale.

No Breakdown Guarantee

Offer customers a no breakdown guarantee through the rest of the season for an extra $50 to $100, provided you perform a full tune-up. A comprehensive tune-up will identify additional repairs for some homeowners, generating more business and will ensure that a breakdown over the remainder of the season is unlikely. While you will inevitably need to make some free repairs under this program, your costs will be a fraction of the added revenue.

Simplify Your Spiff Program

Many contractors offer technicians spiffs or incentives to sell add-ons, service agreements, and so on. Spiffs have a tendency to multiply, eventually making the program disjointed, unfocused, and confusing. Simplify it. Focus on service agreements, leads, and one or two accessories. Your spiffs will be more effective and your add-ons will increase.

Increase the Amount of Your Spiffs

In the 1980s, the average spiff for a service agreement was $10. A quarter of a century later, most contractors still pay $10. Bump your spiff to $20 or $30, increasing the price if necessary. You’ll be surprised how many sales will result.

Production Pay

When you switch to production pay (think flat rate pay), you will also see your average ticket increase. Technicians will have an incentive to perform more comprehensive diagnostic and seek the root cause of a problem, rather than treating the symptom and moving on in a scramble to complete as many calls as possible.

Production pay offers additional efficiency benefits since techs and paid to produce, not to make a parts run. They tend to be more organized. Since technicians are compensated more like entrepreneurs with production pay, they tend to start thinking and acting in an entrepreneurial manner. Both the technicians and you tend to make more money.

As first run in Contracting Business.com magazine June 15, 2011.

Matt Michel is the CEO of the Service Roundtable, HVAC’s largest contractor business alliance. Learn more at www.ServiceRoundtable.com. For a free tour of the members only site, call toll free 877.262.3341      .

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Not flat rate, but fair rate.

One of the great ironies of charging time and materials is that you make more money with your slow technicians than your fast ones. The customer actually pays more for a less competent service technician.

How so?

Your slower technicians are usually your less experienced and less competent technicians. This is not necessarily a bad thing. Not everyone is a superstar and not every superstar started that way. Regardless, slower technicians are probably paid less than faster technicians. Yet companies charge the same rate, no matter whom is sent on the job. Thus, the longer a tech takes, the more the company makes:

- Slow technician = longer time on the job = more billable time.
- Slow technician = lower pay = more gross profit per hour.

By contrast, your faster technicians probably cost you more and bill less:
- Fast technician = less time on the job = less billable time.
- Fast technician = more pay = less gross profit per hour.

The customer pays more to give your slow technician experience. That's not fair to them. You profit less because your fast technician costs more and bills less. That's not fair to you.

Granted, a fast technician might be able to work in one more call per day, overcoming the penalty his speed and efficiency has cost you. He might be able to. Then again, he might not. He might end up with more windshield time (and his windshield time is more expensive).

Flat rate evens out the differences. The customer pays the same whether it's a fast tech or a slow one.

Your slow techs may take longer than the flat rate time estimate (though most flat rate systems are padded so that even the rookies can keep up). Even so, you pay them less per hour.

Fast techs may run under the time estimate, but you pay them more per hour. You see, things tend to even out with flat rate.

If a service company is to charge time and materials correctly, then they would take a page from the lawyers and the consultants. When I do consulting, I charge $3,000 per day. By contrast, I only charge $2,000 per day for one of my employees. We charge different rates because we bring different skills and experience to the table.

If a time and materials company were going to be really fair about it, they would charge different hourly rates based on the skill level and experience of the technician. Of course, this can get mighty confusing. It's far simpler to charge the same hourly rate for everyone.

It's even simpler to charge the same rate for every given job/task/repair. And while we're at it, toss the parts and materials into the price to simplify it down to a single number. That's called flat rate pricing.

Source: Comanche Marketing. Reprinted by permission. Free subscriptions are available at: www.serviceroundtable.com. Copyright © 2002 Matt Michel.

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The controversy over flat rate pricing continues to amaze me. It continues to amaze me that there's any controversy at all.

For those who may not be aware of it, flat rate pricing involves offering a single, up front price before starting a repair. This contrasts with time and materials pricing where a price is given for the material, but the labor is open-ended. Flat rate has been present in the automotive industry for a long time. Frankly, it's been present in most service industries for a long time, but only a minority of service companies use it.

For the record, I'm a strong advocate for flat rate pricing, but not for the usual reasons. I like flat rate because consumers like it.

Back when I was running a contractor organization and we made the leap to flat rate, I commissioned a consumer survey about flat rate pricing. At the time, we estimated that roughly 3% of air conditioning contractors were using flat rate. Yet, one out of every two consumers preferred it.

To me, that seemed like a pretty good deal. Half the public wanted something that only 3% of the providers offered. If I knew nothing else about flat rate, that would have persuaded me. And the preference for flat rate has grown since then.

Over the past six years, I've had numerous opportunities to explore consumer sentiment about flat rate in focus groups. Regardless of the industry, consumers strongly prefer flat rate. It is a strong, emotional preference.

Consumers think flat raters are more honest. They feel relieved to know definitively what a repair costs before they agree to go ahead. They no longer feel the need to scrutinize and compare hourly rates. They don't feel the urge to watch the technician so that he's not padding minutes. It may not be rational, but that's how people see it.

Furthermore, consumers think they're going to get a better price from a flat rater. That may or may not be true. Yet, it is a side effect of efforts by Congressional tax cutters to promote a flat tax. Consumers associate a flat tax with lower taxes and by transfer associate flat rate pricing with lower prices.

Now, it should be noted that not all consumers prefer flat rate. Some like time and materials pricing. And some also like rotary phones, typewriters, and DOS, but that's not the direction of the market.

Whenever consumers indicate a strong preference, follow it. Don't fight it. Leave that for your less enlightened competitors.

Let your competitors stand by the shore insisting the tide stop because they don't like it.

Reprinted by permission. Free subscriptions are available at: www.serviceroundtable.com. Copyright © 2002 Matt Michel

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Regardless of your pricing method, the response charge should be set by design, not happenstance. Ideally, your hourly rate should be set at the level where you do not need the revenue from your response charge to be profitable. Then, you can use the response charge purely as a marketing tool.

From a marketing standpoint, there are four common marketing approaches, which will be covered in this article.

1. Low Price Approach
Some companies set the response charge a token amount for a response charge and market this. When people call and ask for a price, they quote the response charge. “We charge $25 for a service call,” they cheerfully respond. This is a classic retail strategy of quoting a low opening price. Wal-Mart, Home Depot, CompUSA and a host of other retailers market low opening prices.

Why bother? Why not, for example, state that you do not charge by the hour? Consumers want you to quote *something.* When you state that you do not charge by the hour, the homeowner thinks you are being evasive.

Even a low response charge can make a positive contribution to the bottom line. Twenty-five dollars doesn’t sound like much, but if you run 350 annual service calls per truck, a $25 charge delivers $8,750 in gross profit per vehicle. California super plumber, Maurice Maio was an advocate of the $25 charge.

2. Response Charge As Promotion
Other companies give away their response charge as a promotion. Ahron Katz who sold the Dallas A-ABC to a consolidator used to send out $60 coupons, which was the amount of his response charge.

3. Demand Management
Some companies use the response charge to control demand. Gary Katz (Ahron’s son) changes his response charge for Total Service in Minneapolis based on incoming call volume.

Same day service costs more. Priority service (two to three days) costs a little less. Service when he can get to them doesn’t involve a charge at all. Gary then focuses his marketing efforts on the customers who are willing to pay a little more for better, faster service.

Frank Blau implemented a similar approach in Milwaukee. His call takers give people an option to pay more for faster service. Almost all are willing to pay more for faster service and those who are willing to live with a hot or cold house for a few more days in order to save a few dollars are probably not good customer for Blau.

4. Service Agreement Benefit
I’ve always liked the idea of giving away the response charge to service agreement customers. It gives these key customers one more tangible benefit.

The first Comanche Resolution is to review your response charge pricing. What are you trying to accomplish with it? Should you raise it or lower it?

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We all know who the customer is, right? You know whom I’m talking about… the CUSTOMER. The CUSTOMER is the person we serve. The CUSTOMER gives the company money. 

 But there are other customers than the CUSTOMER. Everyone in a company serves someone else. Everyone has customers whether they ever talk to the CUSTOMER or not. 

The technician, for example, is the customer of the dispatcher. The technician is an internal customer. In order for the tech to do a good job serving the CUSTOMER, the dispatcher must do a good job serving him. If the dispatcher references the CUSTOMER’s records and notes a comment or two that will help the technician perform better, he’s serving his customer (the tech) better when he passes them along… 



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