Two Things Contractors Must Do for 2020

Rodney Koop
Contributing Writer
The New Flat Rate

1.     Fix the money thing
2.     Fix the phones

Those two things are money and marketing.  Get these under control, and you lay a foundation.  Once you have the foundation, then all the other things that make up contracting and business will come so much easier.

Money
What this means is that when you are exchanging the talent, skill, knowledge, wisdom, experience, craftsmanship, and labor of yourself and your employees, you exchange it at the highest rate of return possible. You also assure that the customer has the great experience he/she deserves and expects.

Here is an eye-opening example: The average ticket for an auto repair at a reliable automobile dealership is four times that of the average HVAC repair ticket in the United States.  Stop.  Take the time and really think about that.  Four times more.  That means not only will your customer take their auto to an auto dealer and pay them four times more for the same level of work (notice I did not say the same level of service) that you provide, but you, yes you yourself, will take your car, your pickup truck, your service trucks, to that auto dealer and you will pay them four times more than you will require them to pay you for the same level of repair.

Breaks your heart, doesn’t it?

And here is the real heart breaking eye opener. Your auto dealer not only gets four times the money, but he also gets a 99% close rate on those repairs.

So, Rule #1 for 2020:  Get paid what you are worth and what the market will bear.
Rule #2:  Doing more of whatever you did in 2019 back to 2000 won’t make rule #1 happen.

Get out of the rut of wholesale mentality. Think like a fortune 500 business CEO.

Ok what’s next?

Let’s get the marketing right.

When I say marketing, I really mean call volume—making the phones ring.

But there is a problem with a ringing phone.  Do you know what it is? You do want a ringing phone, you do need a ringing phone, but a phone can ring with the right callers or the wrong callers.

Are you getting the right, best callers when your phones ring?

The right and best callers are as follows:

1.     From the precise location that you want your technicians and salespeople working in today.

2.     When the call comes from the precise location, it is almost sure to be the right caller.

3.     The right caller is someone who knows you or knows of you, who lives in a home with 2 or more systems (a customer with more than one system can be loyal to you), who has a career, occupation or steady source of money so that they can afford the kind of products and services you provide, and this caller is from a location where your team has consistently had very good success, good referrals, good reviews, and truly appreciates all you do for them.

That’s it! Get the money right (hint, raising your prices is not the way to get paid what you are worth)—providing a menu of options correctly like retailers do is what blows up your incoming money. And Get the phone ringing right.  Do those two things, and you will be blowing horns by the end of the year.

How do I get the phones ringing at the right tone?  I’m glad you asked. It’s so much easier than you think.

I like to do things in steps, so here they are:

Step 1.  Call a printer, and ask them to make a 4’ X 8’ 12 month, dry-erase calendar out of heavy stock.

Step 2. Put it up in a conspicuous place

Step 3. Circle the dates that you suspect you will need more work.

Step 4. Put a plan in place for each time period and put a big mark on the date you will start the plan to drive great calls to those dates.

Step 5. Don’t hire this out.  You do it.

Step 6. Get out of the box; look at the dates you circled.  Are your target customers concerned about the products and services you normally sell on those dates?

Step 7. Think.  The stores sell “back to school” items in August and September. Why the heck do they do that? Because that’s what people are buying on those dates, and they don’t like “slow times.” Get your head out of the box. Think like a retailer. You have two great assets that can be sold at a very high value any day of the year if you think like a retailer. Those two assets are:

A. Your talented skilled labor pool. What do you do with them in slow times now? Do you sell them cheap or at top dollar? Just saying, no Fortune 500 CEO will sell labor cheap just to keep them busy.

B. The fact that you are in business. Can you imagine how hard it would be for Target to sell 10 million dollars’ worth of back to school clothes if they had to start from scratch in August next year? If they hadn’t even filed for a business license? You are already way ahead of the game.  You have a business, an organization, even if it’s only a few of you.  Employ that asset correctly, and you will come out not only highly profitable, but with very low stress.  Yes, I said that right; very low stress.

I was an Amway distributor back in the day…actually, about 45 years ago.  We would have these meetings, these small conferences, and everyone would be required to speak, at least for a few minutes.  What we discovered was that those who were deathly afraid to get up in front of a crowd became totally new creatures when they made a lot of money.  The guy who has never had a thing and now drives to the meeting in a shiny new car (back in the day, that was a Cadillac) had no problem getting up and giving a great speech. Stress just seems to walk away when you are walking to the bank with a nice big wad.

Here’s how you eliminate the myth called “slow times,” and believe me, you need to eliminate that myth for 2020 if you don’t want a repeat of 2019. Back in my tougher contracting days, my wife would ask, “Will there be money for Christmas?” I would look in my desk drawer for a stack of checks, smile, and say, “Hey, baby, I still have some checks.”  She would laugh.  It’s nice to have a wife who appreciates humor.  But seriously, here’s how you do it.

#3. Put up a big map of your area.

#4.  Circle one or two prime locations.  Now don’t screw this up. We aren’t looking for the mansions; we are looking for the area with the prospects I described in step #2—customers that love you and can and will buy what you offer.  Be very careful. Mark these areas on the map with a blue circle.  Don’t make the circles bigger than you need, because we are going to start “target-marketing” to these areas.

#5. Choose the products or services you will offer depending on the time period that you are going to “fix.” Examples are:  duct cleaning, air duct renovations, attic renovations, whole house energy inspections, whole house safety inspections, indoor air quality inspections, air duct inspections (I made a ton of money with free air duct inspections), mold inspections, basement or crawlspace inspections, and water and moisture restoration.

This is just a start. I’m asking you to think, “What could we (my staff, my techs) do with our tools, trucks, etc.?

More examples are: roofing, roof vents, spray foam, insulating, air duct sanitizing, whole house sanitizing and purifying, siding, painting, windows, doors, gutters, gutter cleaning, roof cleaning (I’m an expert at making metal roofs look like new), pressure washing (a friend did a favor for his pastor and power washed his house—before he was finished, he was inundated with neighbors wanting to pay him to do their homes).  There is no shortage of business, just sometimes during the year, there is a shortage of people wanting your normal services.  Business is about thinking. Put your people to work doing something creative and profitable.

I’m going to interject a point here that is important:  During what you have called “slow seasons,” you don’t have to make a profit on work; you just need work that covers your overhead, because if your overhead is covered during those slow times, then you won’t have to spend the profit you make during the good times.

The reasons contractors end the year with no profit is because they give it up during the slow times.

So, let’s stop that right now. The job of the CEO is to protect and maximize the profit.  That’s your job. Get to work.

Ok, here’s how you do it.

Choose the offer for the time period you want to solve—let’s say the first two weeks in April.

Name the campaign: “Spring Zing.”

Name the offer, and remember I said you must turn on your brain: “Air Conditioning and Gutter Readiness Inspection.” Don’t judge; think of something that works for you.

Write the add, choose a coupon or special offer, price the offer, or make it free depending on the campaign.  Maybe something like this: If you let us make absolutely sure that your air conditioning is ready for this hot summer, we will do a completely free rain gutter inspection and tune up as our gift to you.

When you create an offer, you need to write the scope of work, so your salespeople and your techs know exactly what needs to be done to meet and match the offer.

“Our skilled technicians will do our 5-element air conditioner examination, which consists of assuring that A. the mechanical systems are in good shape and that nothing is broken or damaged, B. that the electrical system has no dangerous wiring and no dangerous connections, C.  that the electronic controls pass an inspection and test, making sure all air conditioning controls are doing what they should be doing, D. the systems pass an efficiency test, making sure the customer is not going to overpay the utility company this summer, E. the systems pass a safety test, because safety is no accident. We will make sure everything operates safely.”

#6. Choose the medium you will use. Door hangers, flyers, postcards, driveway gifts, lumpy mail, newsletters, free things (recipe flyers or books, plungers, ice scrapers, magnets and stickers of course, neighborhood newsletters, doctors’ office mailers; choose the social media such as Facebook, Snapchat, Twitter; choose the digital marketing media like emails and ads.

Here’s the secret.  Don’t use expensive stuff like pay-per-clicks, TV, radio, and billboards, unless you are already rich. 

Use targeted marketing.

#7. Ready? Here’s the fun part.  Choose the distribution method.  $100 and $200 donations will go a long way with your local Boy Scouts, sports teams, cheerleader squads, etc.  You probably know someone who has kids in these groups that would love to do a Saturday “papering” for you.  Get them to pass the stuff out.

Do something actionable in your target area four times a year.

Mail to the area at least 9 times a year.

Do the special campaigns ahead of the formerly called “slow times.”

Any day that you do not have enough work and you have prepared for this by running a campaign, you simply pick up the phone and say, “Hi, this is Rodney here at Clean Heating & Air; sorry to bother you, but we’re just checking to see if you got those big yellow postcards we sent out last week?”

Then make your offer.  When you have properly papered the area, you should be able to get emergency work with only a few phone calls.

And that’s it.  Those are the two things you must do for 2020.

By the way, if you need help, call me, we have everything you need.

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