‘The World’s Shortest Marketing Plan’ Terry Tanker 5
The Importance of Process in Achieving Company Growth David Dombrowski 12
About to Blow Your Top? Bob Whipple 16
4 Keys to Successfully Using Feedback During Training Garrett Cook 18
Charitable Giving, the Tax-Wise Way Keven Prather 20
HVACRBUSINESS.COM MARCH 2022 / VOL.17 / NO.3
CONVERTING THEORY INTO PRACTICE
RESIDENTIAL SERVICE AGREEMENTS PART 3 ALSO INSIDE » Ruth King: Pricing Maintenance Agreements – Know Your Profit Bottomline ..................................................15 Product Focus ................................................................ 21 20 Questions with Bob Elledge President and CEO of Rotobrush International LLC...22
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Are you looking for more time, money or freedom? We have the training tools for you. Training can provide benefits to both an individual and the business where they work. At Goodman, we believe ongoing training is worth the investment. Training may help develop skills that increase productivity, improve employee morale and help boost a company’s profit margin. Benefits of Ongoing Industry Training: Stay Informed of Industry Changes Increase Job Satisfaction and Internal Promotion Opportunities
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Provide an Incentive to Learn
Identify and Reduce Weaknesses and Skill Gaps Maintain Knowledge and Skills
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CONTENTS
MARCH 2022 / VOL.17 / NO.3
F E AT U R E S
6 12 16 18
Residential Service Agreements Part 3: Converting Theory Into Practice An overview of the training required to build a profitable HVAC retail business with residential service Ron Smith
D E PA R T M E N T S
5
An overview of Kelly O’Dell’s, “The World’s Shortest Marketing Plan” – an HVACR Marketing Template. By Terry Tanker
The Importance of Process in Achieving Company Growth Strategies to improve process, navigate growing pains, and achieve real company growth David Dombrowski
About to Blow Your Top? Stop and Think — About Yourself 10 tips to get along at the workplace and solve disputes Bob Whipple
4 Keys to Successfully Using Feedback During Training How to get the most out of feedback when training technicians Garrett Cook
Publisher’s Page
21
Products
22
20 Questions with Bob Elledge, President and CEO of Rotobrush International LLC.
C O LU M N
15
Pricing Maintenance Agreements – Know Your Profit Bottomline
20
Charitable Giving, the Tax-Wise Way
Tips to job-cost and price your maintenance agreements to assure profit and avoid loss Ruth King Assess the effectiveness of your charitable giving to ensure it’s tax efficient Keven Prather Correction to January 2022 Issue, The Formula For Leaving Customers More Than Satisfied, was written by David Dombrowski and not Dave Indursky.
RECYCLE EVERY MERCURY THERMOSTAT
EVERY TIME. thermostat-recycle.org
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THE HVACR MANAGEMENT MAGAZINE
TERRY Tanker Publisher ttanker@hvacrbusiness.com HEATHER Langone Managing Editor hlangone@hvacrbusiness.com MEGAN LaSalla Art Director mlasalla@hvacrbusiness.com
ADVERTISING STAFF ERIC Hagerman National Sales Manager Tel 216-409-3246 ehagerman@hvacrbusiness.com TERRY Tanker Publisher Tel 440-731-8600 ttanker@hvacrbusiness.com
BRUCE Sprague Circulation Manager bs200264@sbcglobal.net BARBARA Kerr VP Operations bkerr@hvacrbusiness.com
HVACR Business, founded January 1981, is a monthly national trade magazine serving contractors, mechanical engineers, manufacturers, manufacturer representatives, wholesalers, distributors, trade associations, and others in the heating, ventilating, air conditioning and refrigeration (HVACR) industry primarily in the U.S. The editorial focus and mission of HVACR Business is to provide business owners and managers with the very best business management concepts available. Critical topics covered include leadership, management, strategy, finance, sales, marketing, training, education, staffing, operations, human resources, legal issues, customer service and more. We are dedicated to helping contractors master these key management skills and provide them with the resources necessary to build strong, profitable companies. Every effort is made to provide accurate information, however, the publisher assumes no responsibility for accuracy of submitted advertising and editorial information. Copyright©2022 by JFT Properties LLC. No part of this publication may be reproduced or retransmitted in any form or by any means, including, but not limited to, electronic, mechanical, photocopying, recording or any information storage retrieval system, without the prior written permission of the publisher. Unauthorized copying may subject violators to criminal penalties as well as liabilities for substantial monetary damages up to $100,000 per infringement, costs and attorneys’ fees. This publication should not be utilized as a substitute for professional advice in specific situations. If legal, medical, accounting, financial, consulting, coaching or other professional advice is required, the services of the appropriate professional should be sought. Neither the authors nor the publisher may be held liable in any way for any interpretation or use of the information in this publication. The authors will make recommendations for solutions for you to explore. Any recommendation is always based on the authors’ research and experience. The information contained herein is accurate to the best of the publisher’s and authors’ knowledge; however, the publisher and authors can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof.
‘The World’s Shortest Marketing Plan’ Goes A Long Way
R
ecently, I sat down to analyze our company’s marketing goals and objectives. The original plan had been written more than a year ago and didn’t include plans for the new website launching early this summer. That project alone will take up significant resources and while the budget for the project is set, the time commitment is not. I’ve been through several website launches in my career and the investment in time, is significant.
HVACR Business (ISSN 2153-2877) Copyright ©2022 is published monthly by JFT Properties LLC,31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039, Phone: 440731-8600. Periodicals postage is paid at North Ridgeville, OH and additional mailing offices. (USPS 025-431) POSTMASTER: Send address changes to HVACR Business, 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039.
31674 Center Ridge Road, Suite 104 North Ridgeville, OH 44039 Tel: (440) 731-8600 Web site: www.hvacrbusiness.com (ISSN: 2153-2877)
www.hvacrbusiness.com www.HVACRBUSINESS.com www.hvacrbusiness.com www.hvacrbusiness.com
at www.kellyodell.com. You can also download this template here https://kellyodell.se/the-worldsshortest-marketing-plan/ or from our website at www.hvacrbusiness. com/resource-center.html.
Make this your first step toward improving internal communications.
I wanted to write a plan that would include components for our visitors, our advertisers, our staff, and the vendor incharge of the project. Add an additional several thousand pages of content into the mix, and it’s easy to see how this plan could become cumbersome. Keeping the stakeholders abreast of that’s happening and on the same page, is the main objective of the plan. One of the larger drawbacks to most marketing plans is their complexity and length. Expecting everyone to read the lengthy marketing masterpiece you created, isn’t realistic. To find a template that would serve as the “CliffsNotes” version, I searched “world’s shortest marketing plan” in hopes of finding a good option. At the very top of the search was a link to one of our former monthly columnists, Guy Kawasaki. There in the link to his blog was the information I needed. “The World’s Shortest Marketing Plan” written by Kelly O’Dell, a speaker, author, and leadership coach. It served our purposes well. You can find more of Kelly’s work
This template is perfect for any marketer, and once filled in, addresses customer needs, product positioning, price, promotion, timing, cost, product benefits, distribution, and more. An additional benefit of this template is its capability to allow for editing of the questions, so they are relevant to your company and your situation. If you’ve never developed a marketing plan, this is a wonderful place to start. If you have created one, and it’s become too complex, here’s a way to simplify things and boil them down to what really matters. Best of all, this is easily shared with your entire company, large or small, with vendors, and anyone else with whom you want to be on the same page. Also, as a great complement to this marketing plan, in our archives, you can find an article by one of our former board members, Jackie Rainwater. He wrote “Great Companies are Built with Great Internal Communications”. It will most certainly be a beneficial read if you are in the planning stages or rebranding stage of your business. Finally, there are several benefits to using this plan. First, it’s short, concise, and manageable. Second, it’s customizable for your individual marketing project. And it’s a terrific way to keep multiple groups on the same page. Most importantly, you’ll open a line of communication with your employees, and improve internal communications and input. u
The World’s Shortest Marketing Plan
Subscription Rates: Free and controlled circulation to qualified subscribers. Non-qualified persons may subscribe at the following rates: U.S. and possessions: 1 year $48; 2 years $75; 3 years $96; Canadian and foreign, 1-year $108 U.S. funds only. Single copies $8. Subscriptions are prepaid, and check or money orders only. Subscriber Services: To order a subscription or change your address, write to HVACR Business, 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039 or call (440) 731-8600; or visit our Web site at www.hvacrbusiness.com. For questions regarding your subscription, please contact bkerr@hvacrbusiness.com.
PUBLISHER’S PAGE
BY TERRY TANKER
WHAT
WHY
WHEN
HOW
HOW MUCH
WHO
What products do you need?
What need does it fill?
When do you need it?
How will the product fill the need?
Product cost, volume to be sold, etc.?
Customer segments to be targeted?
Price
What price will you sell for?
Why is that the right price?
How long will that price be valid?
How will the price develop over time?
How much sales and margin will be created?
Different prices for different segments?
Place
How will products be distributed?
Why choose these channels?
When do customers choose different channels?
How will we create or enter these channels?
What are the cost/benefits of these channels?
How do different segments use different channels?
Promotion
What types of promotion will be used?
Why choose these activities?
Timing – launch, lifecycle, etc.?
How will the promotions be executed?
Costs/benefits of the promotions?
Target groups for various promotions?
Product
(Including aftersales and service)
HVACR BUSINESS MARCH 2022
5
CONVERTING THEORY INTO PRACTICE
RESIDENTIAL SERVICE AGREEMENTS PART 3 Building a highly profitable HVAC retail business with residential service agreements take more than ideas; it takes proper training and execution. BY RON SMITH This year, in each issue of HVACR Business we’ll be publishing an article from our archive based on popularity and website traffic. This is the third in a series from Ron Smith. We hope you enjoy.
W
ith this final article in the service-agreement series, I will present the last steps necessary to position your company as the dominate force in your local market. In the first two articles of this series, we presented service agreements as the solution to obstacles such as the inability to attract and retain good people, difficulty in driving revenues during mild weather periods, and overcoming low-price
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There are two methods for obtaining service agreements. The most effective method is a proactive approach: performing a non-service agreement precision tune-up. competitors in the marketplace. We also presented the importance of avoiding false starts in your service-agreement program by elaborating on the required
HVACR BUSINESS MARCH 2022
commitment by owners and leaders, as well as providing necessary training to all ongoing co-workers. Additionally, we highlighted pricing strategies for both
non-service precision tune-ups and service agreements, and noted the importance of rewarding all co-workers with commissions. To build on previous knowledge, this article will offer procedures for converting service calls and non-service agreement precision tune-ups to service agreements. I also will explain how to market, sell, renew, and continuously train co-workers to achieve the best results in service-agreement programs. www.hvacrbusiness.com
And to ensure that your company is able to see results, I will offer insight for realistic and practical benchmarks. “Never refer to Service Agreements as Service Contracts”
CONVERTING NON-SERVICEAGREEMENT PRECISION TUNEUPS TO SERVICE AGREEMENTS There are two methods for obtaining service agreements. The most effective method is a proactive approach: performing a non-service agreement precision tune-up. Many companies attempt to get new customers by offering replacement equipment systems, which cost the customer several thousand dollars. The effective way to woo customers is to offer the lowest-priced product (typically $69 to $89) in your portfolio of products and services with absolutely no risk to the customer. (In fact, smart marketing should say that if the customer is not pleased with the tuneup they do not pay for it.) Once the tune-up is completed, the technician carefully explains the customer benefits of a service agreement and presents a proposal for acceptance. Think of the non-service-agreement precision tune-up as a demonstration of what the customer will be receiving twice a year (along with a host of other benefits) when they invest in a service agreement. The customer can invest in a one-, twoor three-year agreement and they pay for it all at once. Many companies choose not to charge for the non-service agreement precision tune-up if the customer invests in a service agreement. They simply consider the non-service-agreement precision tune-up as the first tune-up the customer receives with the service agreement. With proper technician training you can easily get paid for both the non-service agreement precision tune-up and the service agreement at the same time. Additionally, you will greatly improve your service-agreement renewal results by getting paid for the non-service-agreement precision tune-up along with the service agreement. It allows you to schedule the last service-agreement precision tuneup 12 months later when the customer is most likely to renew.
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For the best results, aim your marketing efforts toward customers that do not own a service agreement. CONVERTING SERVICE CALLS TO SERVICE AGREEMENTS
and offers. However, they are attracted to precision tune-up offers.
The other method of obtaining service agreements is regular demand service calls (responding to repairs). This is a reactive approach.
Direct mail is the most effective method. A follow-up call immediately after a direct-mail campaign can increase the response rate 25% to 50%.
Your service pricing should be structured with a discount for service-agreement customers who experience a service call (I recommend 15%). You can offer the same discount on the present repair if a customer invests in a service agreement after your technician has completed the repair and before leaving the home. The sale requires the technician to carefully explain the benefits of a service agreement. For example, a customer might have a $300 repair that can be discounted $45 (15%) to $255 if they make the service-agreement investment. Hopefully you’re using a flatrate-service system. If so, your technicians’ repair manuals would indicate the two price choices and the savings: $300, $255 and $45. Flat-rate-service pricing enhances service-agreement sales.
However, before using follow-up marketing, make certain you are in full compliance with federal and state telephone solicitation regulations.
For companies that have a maintenance department staffed with precision tuneup specialists, the service technician who made the service-agreement sale informs the customer that a representative of the company will be phoning to schedule the first precision tune-up under the service agreement. For companies that do not have a maintenance department, the service technician should ask the dispatcher whether they should perform the service agreement’s first precision tune-up while they are still at the customer’s home or if the office wishes to schedule it later with the customer. The dispatcher’s decision will be based on the current work load.
MARKETING NON-SERVICEAGREEMENT PRECISION TUNE-UPS I know it might sound ironic, but advertising service agreements does not work. I know from experience (and through spending several thousand dollars more than once) that people are not attracted to service-agreement advertising
Another tactic that is effective: radio advertising in conjunction with your direct-mail offerings. For all marketing, make sure you mention the value of precision tune-ups, professional cleanings and safety inspections. Also note that customers associate time on the job with value. For decades I have successfully marketed against competitors that offer and deliver 30-minute, $29 “clean and checks.” Make certain that you emphasize the time you will spend on the job in your marketing campaign. For the best results, aim your marketing efforts toward customers that do not own a service agreement. Then move to non-customers selected by demographic and geographic decisions. And if you are going to make bold statements in your direct-mail campaigns, make sure they are absolutely true. True bold statements work well. False statements can ruin your reputation. I also recommend including a discount and using an “act now before the offer goes away” phrase.
TECHNICIANS SELLING SERVICE AGREEMENTS A sale is not difficult if your technicians are properly trained to explain customer benefits and the procedures in offering service agreements. To further prepare your technicians, have all of the basics in place: clean and neat trucks, well-groomed technicians, professional forms, and easy-to-understand printed pricing. Also, teach them how to present themselves and how to get the customer involved in the repair or
precision tune-up. For example, after the technician arrives on a service call, introduces himself or herself and diagnoses a repair, he can engage the customer by opening up his flat-rate pricing manual and pointing out the repair cost. He can then say, “Mrs. Jones, as you can see, we can repair your air conditioner and soon be providing cooling for the repair price of $300, plus the diagnostic charge. Or should you decide to invest in a service agreement, the repair charge will only be $255. If you will authorize the $300 repair, when the work is completed, I’ll explain the service agreement and you can make a decision and still get the discount on the investment.” The technician did not try to sell the customer the service agreement until the air conditioner was fixed. (When people have no air conditioning or heating, they do not want a sales presentation, they want cooling or heating.) But he did properly inform her of a service agreement and the savings opportunity. When performing non-service agreement precision tune-ups, the sale is even easier. For example, “Mrs. Jones, I would like to show you your air conditioner and furnace now that I’ve completed the precision tune-up, professional cleaning and safety inspection. I have the system in the very best operating condition. Many of our customers invest in our company’s service-agreement program. When they do so, they receive two precision tuneups every year, just as I performed today, along with many other benefits. Our office will even call you when it is time for the service.” In order to achieve the results you want from your technicians, you must provide them constant encouragement and recognition. Reward them with spiffs, create contests and have fun. When you celebrate success, you create a winning atmosphere.
ON-GOING STRUCTURED TRAINING Training is an on-going, repetitive process. Indeed, Tiger Woods did not wait until the morning of a tournament to practice hitting golf balls. continued on page 8
HVACR BUSINESS MARCH 2022
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• Typically, they perform higher-quality precision tune-ups. Most skilled and experienced service technicians do not like performing precision tune-ups.
continued from page 7
You will need to review the technical procedures of performing precision tune-ups, particularly as you employ new technicians. Never rely on “training by osmosis.” Your training must be properly structured and scheduled.
• Since they are hired based on customer relations skills, they relate better to customers. • Their labor rate is lower than service technicians.
In fact, I spend an equal amount of time or more training technicians in customer relations as I do on technical issues.
• They free up your service technicians to be available for repairs.
Another great training technique is having technicians share their success stories and challenges with each other.
• They are your future service technicians and comfort consultants, well trained in customer relations and with no bad habits from another hvac company.
PERFORMANCE TRACKING INFORMATION AND BENCHMARKS In order to set goals for your company, it is important to know how others perform. The following benchmarks are what you should strive for. It is important to set realistic goals, which will result in co-worker job satisfaction and recognition.
The service technicians’ work is reactive — you never know who will phone next, what will be wrong and where they live. Service technicians are skilled and experienced in fixing air conditioners and furnaces.
• 25% — Minimum conversion rate from service calls to service agreements by service technicians. • 70% — Minimum conversion rate from non-service-agreement precision tune-ups to service agreements by precision tune-up specialists. • 10% — Minimum conversion rate from service calls and precision tuneups to equipment replacement sales leads or accessory sales by service technicians and precision tune-up specialists. • 80% — Minimum service-agreement renewal rate. • 1,200 — Total residential service agreements per $1 million in residential retail revenues.
MAINTENANCE DEPARTMENT A maintenance department within a service division was relatively unheard of until the mid-1980s, when I established it. Now many companies adhere to the maintenance-department principle. I have personally trained hundreds of companies in the establishment of a maintenance department and operated the four hvac companies I owned accordingly. A maintenance department separates the functions of service technicians who perform repairs from the functions of maintenance technicians (we call them
8
precision tune-up specialists) who perform precision tune-ups, professional cleanings and safety inspections. The service technicians’ work is reactive — you never know who will phone next, what will be wrong and where they live. Service technicians are skilled and experienced in fixing air conditioners and furnaces. The maintenance technicians’ work is proactive — it can be planned days and weeks in advance. Precision tune-up specialists are skilled and experienced in performing quality tune-ups. Their job is to prevent things from breaking. Service technicians obtain service agreements while performing service calls. Maintenance technicians get service agreements while performing non-service agreement precision tune-ups. However, maintenance technicians also keep service-agreement customers by performing their scheduled precision tune-ups and processing renewals. In fact, our very best customers — service-agreement customers — are inventoried in the maintenance department. It is the maintenance department’s responsibility to keep customers.
HVACR BUSINESS MARCH 2022
MAINTENANCE TECHNICIANS VS. SERVICE TECHNICIANS Many companies don’t have maintenance departments. They use their service technicians for performing both service calls and precision tune-ups. From a personal standpoint, I am a proponent of a maintenance department. Positives of using service technicians to perform precision tune-ups: • Provides work for service technicians during mild-weather periods. • Reduces drive time between calls, resulting in increased service-technician productivity. • Should a repair be required while on a precision tune-up, the service technician can complete the repair while there saving time for the customer and the company. Positives of using precision tune-up specialists to perform precision tune-ups: • Greatly broadens the available labor pool as you are recruiting and hiring based primarily on potential customerrelations skills, not technical talent. They are taught technical skills as they advance.
The question often asked, “I use both non-service-agreement precision tuneups and service-agreement tune-ups as fill-in time for my service technicians in mild-weather periods. Having a maintenance department will prevent me from doing this. How will I keep my service technicians busy?” There are two answers to the question. The first answer is to actively sell commercial service agreements and schedule as many of the commercial-service-agreement precision tune-ups as possible in the predictable mild-weather months. Commercial service agreement precision tune-ups are performed by service technicians. The second answer is you will not need as many service technicians once you have precision tune-up specialists.
PROFILING NATURAL BEHAVIOR CHARACTERISTICS Some people are inherently good with customers. They have a high degree of empathy, thus it is easy for customers to like and trust them. In order to hire the best precision tuneup specialists, you must find candidates with great customer-service skills. You can later train them in the technical aspects of your business. Like all potential employees, you should check driving records and administer a drug test (make certain you are within your legal rights to do so), as well as obtain a complete background report. Additionally, you should obtain a
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profile of the candidate’s natural behavior characteristics. The profile will tell you a lot about how well they will do in offering and selling service agreements as well as selling accessory products and turning in replacement equipment sales leads. There
are several sources for this service. One of them is www.learningbeam.com.
After the quick debriefing, technicians are dispatched to the next call.
DEBRIEFING
One of the questions you should ask technicians, “Did the customer invest in a service agreement?” If yes, congratulate them. If no, make sure the technician
Debriefing immediately after each service call or precision tune-up is a must.
completed a service-agreement form and left it with the customer. When your company performs a happy call with the customer the following day you can say, “I continued on page 10
DIRECT MAIL LETTER FOR TUNE-UPS (Your Letterhead) (date) (name) (address) (city, state, zip) Dear (name),
START SAVING MONEY! Many local residents do not realize their home heating and air conditioning system operates approximately 3,300 hours per year. To put this “run time” in perspective, a car driven for the same 3,300 hours at 65 miles per hour would travel 214,500 miles. No one would consider such a journey without arranging for oil changes, lubrication, and routine tune-ups along the way to assure the efficiency, safety and reliability of the vehicle. Your home heating and air conditioning system serves you many more hours than your car, and, like your car, needs routine tune-ups to operate in an efficient, safe, and reliable manner. Our unique precision tune-up includes everything that can possibly be done in order to restore your heating and air conditioning system to its very best condition. No other local heating and air conditioning company performs a comparable precision tune-up. In fact, it often takes us 1 ½ hours or more to perform the work! This unique precision tune-up is available to you for only the next 60 days at a special discounted price of only $79. Since your system will likely be running another 3,300 hours this year call us at (phone number) and ask for (name) at extension (number) to schedule a convenient time to have your system brought up to maximum operating standards. Don’t wait, start saving money today! Sincerely, (name) Customer Service Representative P.S. 100% Guaranteed. If you are not satisfied with our service, I will gladly refund your money – no questions asked! P.P.S. Here’s a special offer! Should you, for any reason, experience an emergency service call on your air conditioning and heating system within one year after we complete the precision tune-up we will waive the $57 service call diagnostic fee, which compensates us to get to your home and diagnose the problem.
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HVACR BUSINESS MARCH 2022
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INVOICE
(date) (name) (address) (city, state, zip)
Thank you for your business! We appreciate the opportunity to serve your indoor environmental needs. It is time to extend your Service Agreement so you can continue saving money on your monthly utility bills, lengthen the life of your heating and air conditioning equipment, and minimize expensive inconvenient service calls. You can extend the Agreement one year for $149, two years for $289, or three years for $421. As you can see, there is a discount available for the two- and three-year renewals. Once again, thank you for your continuing business! Please enclose your check: I choose one year for $149 I choose two years for $289 I choose three years for $421
continued from page 9
The service technicians’ work is reactive — you never know who will phone next, what will be wrong and where they live. Service technicians are skilled and experienced in fixing air conditioners and furnaces.
noticed our technician left a service agreement with you to consider. Are there any questions I can answer?” Another question asked of the technicians during the debriefing, “What is the age of the equipment and is it a sales lead?”
RENEWING SERVICE AGREEMENTS There are several methods of renewing service agreements. What I have found works best is to have the technician handle the renewal when performing the last precision tune-up on the present service agreement. The technician can ask for a check and indicate the payment and renewal on the precision tune-up invoice. This works well if you schedule the last precision tune-up in the 11th or 12th
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month of the present agreement. It is not necessary to have the technician prepare another service-agreement form during the renewal process. Other companies mail a renewal invoice. (For an example, see the Service Agreement Renewal Invoice above.)
SERVICE AGREEMENT RENEWAL INVOICE Whatever method of renewal you choose, do not accept losing a customer
HVACR BUSINESS MARCH 2022
without telephone follow-up. The renewal of a service agreement must be considered extremely important to you. However, it is probably not the most important thing on your customer’s mind. That is exactly why you must be willing to phone them as a last attempt in your renewal effort.
There is a reason I named my book “HVAC Spells Wealth” — because there is wealth to be had both personally and financially within the hvac industry. Service agreements are one avenue toward that goal. u
Ron Smith is a well-known authority in the HVACR business with more than 60 years of experience as a contractor, franchisor, consolidator, and consultant. He is the author of HVAC Spells Wealth, More and New HVAC Spells Wealth and HVAC Light Commercial Service Agreements.
With all the parts in place and all the knowledge gained regarding service agreements, I hope you put into practice the techniques I have learned over the last 60 plus years.
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Do You Know What Your Business is Worth?
Complete this complimentary evaluation of your business. Then, let us help you chart your path to growth and succession. Keven Prather of TransitioNext Advisors is a monthly columnist for HVACR Business.
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THE IMPORTANCE OF PROCESS IN ACHIEVING COMPANY GROWTH
Goals to achieving real growth and profitability BY DAVID DOMBROWSKI
U
nderstanding the steps to improvement and more profitability, is a critical part of the process for any business owner. In a recent article, we discussed the importance of defining core values and the guiding principles of your company. Then, we tackled the issue of how to set yourself apart to become the contractor of choice by providing services that exceed customer expectations. Now, let’s identify the pathway to move toward these goals and ideals.
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Learning to be better, is a much better goal even if it first implies a failure of some sort. OUTLINING GOALS FOR YOUR HVAC BUSINESS Visualizing the end goal is important, especially as part of an overall goal setting strategy. But when building a strong foundation, it’s important to focus on the
HVACR BUSINESS MARCH 2022
journey so you don’t miss important steps along the way. At various milestones, you should have a new objective. Because for the more ambitious goals, the way to get there is achieved through a series of steps. As an example, you might commit to increasing revenue from $2 million to $3
million on your path to $20 million. Or maybe you have the long-term, goal of retiring in ten years. Then set your sight on the Contractor of the Year award which will lead to more customers and ensure a path to early retirement. It’s also alright to set up these small benchmark goals while still choosing to make a commitment to long term ones, like growing your business to $20,000,000. So, define the goals, long term, short term, and milestone benchmarks. Then, finally the last thing, is to
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assess whether these goals are realistic and attainable.
IMPROVING THE PROCESS VS. ACHIEVING PERFECTION When I do a presentation for a class, I ask the students, “What is a goal?” The typical answer is that it is the thing that we try to achieve. I then ask, “What is a reasonable success rate in achieving your goals?” The typical responses are 80 – 90 percent; although most say that the important thing is always trying our best. However, that might be where we veer
Sigma program at the green and yellow belt level. Six Sigma procedures were designed to improve processes to a level of attainment of 99.99966%. In theory, it makes sense that if the process is flawless, the outcome will be as well. And Six Sigma is an excellent process tool. However, there is a flaw in this concept because it dismisses the value of first steps. It also completely disregards the fact that a company is only as good as its people. It disregards the learning within upper management that must happen along the way
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A successful process is never only defined as the point from A to point B that results in profitability. It is a culmination of all the little steps taken forward and backwards, and then forward again, that must happen to refine the process.
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off course because “trying your best” is an oxymoron and has little to do with true growth. Learning to be better, is a much better goal even if it first implies a failure of some sort.
WHAT DOES IT REALLY MEAN TO BE BETTER…TO IMPROVE? Years ago, I was certified in the Six
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Look for the flare!
That’s how you know it’s for HVAC/R.
if a company is to continuously improve. A successful process is never only defined as the point from A to point B that results in profitability. It is a culmination of all the little steps taken forward and backwards, and then forward again, that must happen to refine the process. continued on page 14
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A M E R I C A N
HVACR BUSINESS MARCH 2022
M A D E
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The solution is always in the process. What’s in the way is the way. The following steps will help you find clarity in the ever-evolving process to real achievement.
continued from page 13
Thus, there needs to be a consensus among the company and its members, or a value statement perhaps, that the process is just as important as is arriving at profitability.
1. Identify, write down, and define your goals
Most managers are bred to ignore the need for finetuning along the way and instead to deliver the win at whatever cost. It is a complete disregard for the process and the value derived from it. For much can be learned when we place as much importance on that which isn’t working, as we do on that which is.
2. Process map and flow chart the steps to reaching these goals
WHY FOCUSING ON FAILURE IS VITAL TO A COMPANY’S SUCCESS?
4. Avoid using the “the check list method” of a final inspection to assure compliance. Finetune your process so efficiently, that a list is unnecessary.
Daily in our own businesses, we as managers assess and celebrate our growth in the form of winning percentages. Of course, this kind of winning inventory taking, is critical in motivating and growing our teams for success. However, while failure should never be the goal, the truth is there will always be room for improvement.
3. Use the Six Sigma approach and identify what steps in the process add value to either the customer, the coworker, or the company. If there is no value to doing it, eliminate it and simplify the process to reduce the chance of errors.
Failure is implied on the road to achievement, and it can be our best asset if we are all willing to learn from it and do it differently. Accept failure as an opportunity to learn and work towards the solution. So, instead of having the perspective that winning 99% of the time also equates to also having failed 1% of the time, decide instead to focus on the 1% as an opportunity. Taking inventory and identifying the places as a management team where you have failed 1% of the time, means constantly working toward improving the process.
GOALS ARE MANDATORY You either achieve them or you have failed to achieve them. Realistically achievement implies a certain amount of failure. People make mistakes, equipment breaks, and in real life, there is never a “Deus ex machina” moment to save us. However, there is a huge difference between acknowledging and growing from failure, and simply accepting the defeat.
BECOME A BETTER NEGOTIATOR
5. If there is seemingly no way to refine the current process, then deconstruct the process and create it from scratch so that it better aligns with your current business model Finally, as a final note on goals, process and improvement, focus on continuously working to improve the process. Weave this into your company values so it’s part of the company culture. Failure is implied on the road to achievement, and it can be our best asset if we are all willing to learn from it and do it differently. Accept failure as an opportunity to learn and work towards the solution. If you do all this, the company will continue to grow, and the people you employ will feel more valued and validated for your efforts. And shouldn’t that be one of the most important first benchmark goals? Next time we will look at the concept of “sacred cows.” u
David Dombrowski, Manager ARS, is a regular contributor to HVACR Business.
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HVACR BUSINESS MARCH 2022
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FINANCE
BY RUTH KING
Pricing Maintenance Agreements – Know Your Profit Bottomline he goal on performing maintenance should be to net a profit, but at the very least you should never lose money. Contractors often have the misconception that you can lose money on maintenance because you “make it up” in either service or replacement. Everything you provide to a customer should at least break even, whether it is maintenance, service, or replacement.
T
should job cost the entire account including service and replacement work to see if the entire account is profitable.
If your company’s maintenance growth is exponential and you are losing money on every agreement, your losses will increase exponentially. If the growth continues, cash for the maintenance agreements increases, and you don’t see the harmful effects of the losses. Once growth stops, the cash increase will too, and you will start seeing cash problems associated with the losses.
If you discover that your maintenance plans are not profitable, then it is time to raise prices to at least $5 net profit per hour. If you haven’t raised prices in several years, it is easy to explain to the customer that since costs have increased, unfortunately, you will have to raise prices to cover the additional costs.
JOB COSTING TO AVOID LOSS ON MAINTENANCE AGREEMENTS For residential agreements, let’s work with an example of 1,000 maintenance agreements. When you job cost, you discover that you are losing $10 per agreement, or $10,000 total. To make up the loss on agreements — if we assume that your company has a 5% net profit —your company must then generate $10,000 divided by 5% or $200,000. For commercial agreements, job costing is also essential. Each agreement is unique: different equipment numbers and types, as well as different frequencies of service. Therefore, each agreement should be viewed as a job, and at the end of the year, you should review the net profit per hour for that job. If the net profit per hour is negative, then raising the price of the agreement is critical.
NET PROFIT PER HOUR – HOW TO ANALYZE The “net profit per hour’ is defined as the net operating profit divided by billable
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However, if a customer asks you to bid a replacement roof top unit, as an example, you will not quote the customer a price in which your company loses money on that replacement. So, why would you bid maintenance to lose money?
Net profit per hour is defined as the net operating profit divided by billable hours. Net operating profit is revenue minus direct costs minus overhead. hours. Net operating profit is revenue minus direct costs minus overhead. (Be sure to read my article next month. I will discuss pricing in detail). So, what net profit per hour should you earn?
BREAKING EVEN VS. NET PROFIT Maintenance agreements should be priced to at least break even where “break even” is defined as net profit per hour equals zero. A zero net profit per hour does not allow for any mistakes, different technician speeds, or technicians with different hourly rates performing maintenance. For example, if you price your maintenance plans with the hourly rates of the technicians who normally perform maintenance, then if a higher paid technician performs maintenance, you will lose money on those specific maintenance tickets.
So, it is best to use a “net profit per hour” more than zero. How much more than zero? Residentially, maintenance agreements are usually priced with a minimum of $5 net profit per hour. This gives you a little profit to cover the times when a higher paid technician performs the maintenance. In addition, if a SPIFF is not paid on renewals, and the SPIFF is $10 per agreement, then the net profit per hour for years two and beyond, is $15. Commercially, a minimum of $5 net profit per hour is also appropriate. However, you might discover that your net profit per hour on some maintenance agreements is $25 or even higher. Can you increase the maintenance prices for those agreements which are not earning the average net profit per hour? Commercial maintenance customers usually have service or project work that arises because of maintenance. So, you
If a customer does not renew their maintenance agreement and looks for a cheaper alternative, often these customers return in a year or two because they discover that the “cheaper” alternative company, didn’t satisfy their needs. The cheaper maintenance price resulted in inflated service costs, or they could never reach that company when they had a problem. In our current economic times, most customers understand increasing prices. They know that costs have gone up because they have experienced the increases themselves. Therefore, they should understand your need to increase prices. Earn at least $5 net profit per hour on your maintenance agreements. u
Ruth King has more than 25 years of experience in the HVACR industry and has worked with contractors, distributors and manufacturers to help grow their companies and become more profitable. Contact Ruth at ruthking@hvacchannel.tv or at 770-729-0258.
HVACR BUSINESS MARCH 2022
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ABOUT TO BLOW YOUR TOP? STOP AND THINK — ABOUT YOURSELF 10 ways to get along with others and avoid simmering disputes BY BOB WHIPPLE
W
hen working in close proximity, human beings have a remarkable ability to drive each other crazy. The phenomenon occurs daily for most of us. Here are 10 common-sense tips that can change the pattern, so you will have better relations with others.
1. REVERSE THE ROLES. Before venting about another person, think about how that person would describe you to someone else. If you are honest with yourself, it might be a humbling exercise.
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When you go back and forth with another person more than three times, it is time to change the mode of communication. Pick up the phone or walk down the hall for a chat. 2. DON’T SWEAT THE SMALL STUFF. Most married couples fight on a daily basis over little things that become habitual annoyances. If we can just remember that the small stuff is really just that, then maybe we can relax a bit.
HVACR BUSINESS MARCH 2022
3. LIVE AND LET LIVE. If a cubicle mate hums when she is happy, there is no reason to have a coronary over it. It is her outlet and way to be cheerful. If it is an unconscious habit, she will never be able to control it anyway. Buy a pair of noise-canceling headphones and
play the kind of music you like. Let happy people be happy and miserable people be miserable. Focus your energy on creating your own sphere of cheerfulness rather than expecting the rest of the world to conform to your paradigms.
4. PUNCH OUT EARLY. Find some way to get away from the petty squabbles before they bring you to the snapping point. If you cannot actually leave without penalty, take a mental break. Just go for a little vacation in your mind. Actually imagine smelling the giant pines if you love to hike. Feel the frost on your cheeks if you like to ski.
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5. SHARE A TREAT. Just because someone drives you nuts is no reason to hate him all day long. Find some symbolic olive branch and wave it around. Go get two chocolate bars and give him one. Bring in a bag of his favorite coffee. When we change our body language, accentuating the positive, rather than festering about “their problem,” the other person will likely respond in kind.
6. EXTEND TRUST. The reciprocal nature of trust says that you can improve people’s trust in you by extending more trust to them. When we build a higher level of trust, the petty issues seem to melt away because we are focused on what is good about the other person rather than idiosyncrasies that drive us bonkers. The best way to increase trust is to reinforce (rather than punish) people who are candid with us about our own shortcomings. To do this takes emotional intelligence, and it works wonders at improving relationships.
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What we get back from others is really a reflection of our own vibes. 7. DON’T COMPLAIN ABOUT OTHERS BEHIND THEIR BACKS.
of communication. Pick up the phone or walk down the hall for a chat.
Speak well of other people as much as possible. The old adage “if you cannot say something nice about someone don’t say anything at all,” is good advice. When we gripe about others who are not present, a little of the venom always leaks out.
9. CARE ABOUT THE OTHER PERSON.
8. STOP ACTING LIKE CHILDREN. The lengths people go to in order to strike back at others for annoying them often resembles a food fight in grade school. Escalating e-mail notes in a kind of grenade battle is a great example of this phenomenon. It is easy to avoid these squabbles by not taking the bait. When you go back and forth with another person more than three times, it is time to change the mode
If we care enough to not fuss over little things, then we can tolerate inconveniences a lot better. What we get back from others is really a reflection of our own vibes. If we experience prickly and negative reactions from others, we need to check our attitude toward them.
10. HAVE YOUR OWN DEVELOPMENT PLAN. Start out each day with a few minutes of meditation on how to present yourself better to others. Have a list of behaviors you are trying to improve. This mindset crowds out some of the rotten attitudes that can lead you to undermine
other’s actions. We all have improvement opportunities. Remember that life is short, and to expend energy bickering and griping about others really wastes your most precious resource — your time. It is much better to go through life laughing and loving than griping and hating. The good news is we have a choice when it comes to the attitudes we show other people. Make sure your choice enriches others as well as yourself. u
Bob Whipple is a consultant, trainer, speaker, and author in the areas of leadership and trust. He is the author of “The Trust Factor: Advanced Leadership for Professionals,” “Understanding E-Body Language: Building Trust Online, and Leading with Trust is Like Sailing Downwind.” Learn more about Bob at at www.Leadergrow.com, bwhipple@ leadergrow.com or 585.392.7763
HVACR BUSINESS MARCH 2022
17
4 KEYS TO SUCCESSFULLY USING FEEDBACK DURING TRAINING
Getting the most out of feedback when training technicians BY GARRETT COOK
O
ne thing I’ve learned over time is, no matter how well you think you are doing, people around you may have a different perspective. Those people can include your family, your friends, your boss, your co-workers and even your customers. Yet, many times, when others want to share their perspective or feedback, we’re less than eager to accept it. After all, we all know ourselves and our jobs better than anyone else. As general manager of Cook Heating & Air in Crawfordsville, IN, I manage a small team of HVAC technicians, customer service reps and office staff. That same fear of feedback is shared by most of them. Yes, I said, “fear of feedback.” For most people, including owners and managers, feedback in the workplace has earned a negative connotation. Many of us misunderstand the purpose and the benefit feedback can
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As owners and managers, we need to make sure our employees understand that feedback is a gift that, used appropriately, can help improve their job performance. have for our employees’ success and our company’s success. We mistakenly assume feedback and criticism are synonymous. As owners and managers, we need to make sure our employees understand that feedback is a gift that, used appropriately, can help improve their job performance.
1. Understand the rules for providing good feedback
When training technicians on Cook Heating & Air’s customer service process, I make sure to also train them to understand, expect and appreciate feedback from trainers, peers and themselves.
• Say what could be improved
There are four keys to effectively use feedback to maximize technician training.
HVACR BUSINESS MARCH 2022
This is simple, but important. Everyone attending or hosting your training, including you as an owner or manager, must understand, and abide by, critical feedback rules: • Say what went well • Focus on being helpful and specific • False courtesy is no more helpful than ‘all criticism, all the time’ Once everyone is playing by the same rules when providing feedback, the fear of feedback employees may have decreases.
Try this exercise: the next time your technicians role-play a customer interaction during your training (and, hopefully, you are doing this weekly), have the technician you are providing feedback to offer his/her own feedback first. Having an employee verbalize feedback himself/herself helps reduce the fear of feedback when that employee hears it from others.
2. Clearly communicate the training expectations up front and provide feedback based on each of those expectations Think about coaching kids at baseball. The kids spend years doing the same drills. The more practice they have with a coach helping them, the more a particular instruction embeds itself in their brains for game time. Repetition helps drill it in until it’s second nature. Tracking consistent drills over time gives a coach a “form” for
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providing feedback on what went well and what could be tweaked. Most athletes, especially professional ones, are completely comfortable receiving feedback from their coaches regularly – yet we aren’t open to it in our businesses. Those professional athletes have been trained since Little League on the same “form,” and they know coaches can, and want, to help them improve. Likewise, in business training, it’s essential to establish a “form” to track each technician on the same “drills” or training expectations with the same ranking scale. I use a form that outlines each step of the customer call my service technicians are required to do. Each task has a number valuation assigned to it based on how well the technician executed the step or “drill”. This systematic approach to providing step-by-step feedback allows my technicians to understand the focus of the training and what they will be required to do in their jobs after training. This helps remove the fear of feedback for them, since they know what I am measuring their performance on.
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Performing Ride-Alongs with your technicians is the single biggest opportunity you have when it comes to understanding and improving the customer service experience your technicians deliver. 3. Record your participants applying what they have learned during the course of the training I like to incorporate videotaping of participants as another great form of feedback during technician role-play training. This feedback can be very influential since the technicians watch their own videos and provide feedback to themselves. This can be a huge eye-opener, causing immediate changes in performance, and, even more, can also be used in post-training support as a reference or guide for an individual’s professional growth.
4. Reinforce your participants’ learning with Ride-Alongs In my opinion, this final form of feedback
is the most valuable, and it’s the hardest to accomplish on an on-going basis. As the owner or manager, you need to dedicate time to reinforce your technicians’ learning by observing them applying the skills they’ve been taught to “real life” situations. I’ve found Ride-Alongs to be the most beneficial form of feedback because they are a great way for owners and managers to really see what happens during a call. There is no faking with a real customer scenario, and, as long as you have communicated the expectations upfront with the technicians (refer back to bullet #2), your time spent on Ride-Alongs is priceless! As the old saying goes: inspect what you expect. Performing Ride-Alongs with your technicians is the single biggest opportunity you have when it comes to understanding and improving the customer service experience your
technicians deliver. The benefits of using feedback correctly during training stretch far beyond the actual training event and into every aspect of your technicians’ work. Make sure you are looking at this portion of your training to get the most out of the gift of feedback. As an industry, we don’t invest enough in the training and development of our teams. Training is a large investment in time and resources. To maximize your ROI, follow these four keys of feedback, and watch your company leap forward! u
Garrett Cook is currently the general manager for Cook Heating & Air in Crawfordsville, Indiana, and has served on the Board of Directors for the Heating & Air Conditioning Alliance of Indiana since 2008. Garrett has been training contractors in the PHCE industries as a Nexstar® Network trainer since 2011. For more information on training classes available through Nexstar, visit www.nexstarnetwork.com or call 1-888-240-STAR (7827).
HVACR BUSINESS MARCH 2022
19
EXIT PLANNING
PROVIDED BY KEVEN PRATHER, CFBS
Charitable Giving, the Tax-Wise Way
A
mericans—especially the affluent—are some of the most charitable people in the world. * Chances are, you use some of your wealth to support favorite causes or organizations that are important to you. But those contributions may not be having as big an impact as they could—and it’s possible you’re missing out on some valuable charitable tax benefits that could help both you and your favorite charities. Here’s how to size up the effectiveness of your giving—along with some strategies that could potentially put some real power behind your philanthropy.
THE STATE OF AFFLUENT GIVING A full 74 percent of the affluent say they make significant charitable contributions annually, according to an AES Nation survey of affluent individuals with investable assets of $500,000 or more. That statistic strongly suggests that the affluent are both willing and able to support causes they care about. Unfortunately, few of those surveyed donors, are using tax-efficient strategies as part of their annual giving efforts. In fact, as seen in the exhibit, only about one in five is doing more than writing checks to charitable organizations each year.
Tax-wise charitable planning is the process of making a significant charitable gift (either during the person’s life or posthumously) that is part of a financial or estate plan—and doing so as tax-efficiently as possible. posthumously) that is part of a financial or estate plan—and doing so as tax-efficiently as possible. We believe tax-wise charitable planning can be accomplished best as part of an overall wealth plan that addresses other key issues such as wealth transfer, wealth protection, and cash flow needs. When affluent donors account for the various assets in their portfolios and the respective structure, it increases the potential to make meaningful charitable gifts that also provide beneficial tax benefits. Generally, proactive wealth planning that takes an affluent donor’s broader financial situation into account can lead to much better outcomes than can so-called checkbook philanthropy, in which charitable gifts are doled out from cash flow. Important: Effective tax-wise charitable planning focuses first on a person’s philanthropic agenda and then on how to be as tax-efficient as possible. The intention to use wealth to achieve charitable goals is the most critical component of the process. There are ways, beyond simply writing checks regularly, to make charitable gifts.
TAX-EFFICIENT GIVING Simply put, tax-wise charitable planning is the process of making a significant charitable gift (either during the person’s life or
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Following are three commonly used approaches for tax efficient charitable giving: • Charitable trusts. There are diverse types of charitable trusts that have variable tax and other benefits for the donors and the charities. Charitable trusts are set up often as a part of comprehensive wealth plans—especially estate plans—because they can potentially mitigate tax penalties and move assets between the generations.
HVACR BUSINESS MARCH 2022
• Donor-advised funds. A donoradvised fund is established typically by a financial services firm, community foundation or charitable group, which manages the fund’s day-to-day operations. Donors make irrevocable contributions to the donor-advised fund, and those assets are invested and grow tax-free over time. Donors can then recommend which charities should receive their financial contributions, and the donor-advised fund makes the grants. • Private foundations. A private foundation is a not-for-profit organization funded primarily by a person, family, or corporation. The assets in a private foundation, which are called the “endowment,” are regularly invested to produce income used to make grants to other charities as well as to support the operation of the private foundation. Below are key points to keep in mind about private foundations and donor-advised funds—two of the more commonly used options used by philanthropically motivated individuals. A private foundation gives the donor maximum control. This is not the case with a donor-advised fund, which technically allows the donor only to recommend which organizations receive money. That said, donor-advised funds in nearly all cases honor these recommendations (assuming the recipient organization is a registered charity). With a donor-advised fund, the assets are managed by the firm entrusted with the money (such as a mutual fund company or community foundation). With a private foundation, the donor (or his or her
advisors) manages the assets. From a cost perspective, a donor-advised fund is less expensive to set up and manage than a private foundation. In the case of a private foundation, there are unlimited succession possibilities. This enables a family to exercise control and instill the importance of philanthropy across many generations. In contrast, many donor-advised funds have limitations on succession. In situations where such limitations are reached, the assets in the donor-advised fund go into a general pool at the fund company, community foundation or other sponsoring organization.
CHARITABLE GIVING: MAKING AN IMPACT Making tax-wise charitable planning an integral part of your wealth planning efforts can be beneficial. That said, the core of tax-wise charitable planning should be your desire to have an impact on one or more charities. Take some time to think about your own charitable intentions and goals, both what they are today and what they might look like down the road. Armed with that information, you can start to explore and assess several ways to pursue tax efficient philanthropy. u DISCLOSURE: Tax laws are subject to change, which may affect how any given strategy may perform. Always consult with a tax advisor. Charitable Giving, the Tax-Wise Way FLASH REPORT VFO INNER CIRCLE * Karl Zinsmeister, The Almanac of American Philanthropy, The Philanthropy Roundtable, 2017
Keven P. Prather is a registered representative of and offers securities and investment advisory services through MML Investors Services, LLC. Member SIPC. Call 216-592-7314, send an email to kprather@financialguide.com or visit transitionextadvisors.com for additional information.
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PRODUCT FOCUS »
AMERICAN STANDARD
COLD FOG
EWC CONTROLS
FRIEDRICH
With American Standard® Heating & Air Conditioning’s innovative AccuLink™ Platinum 1050 or 850, Gold 824 and Silver 724 smart thermostats, you can set your home to your ideal temperature from most web-enabled devices, like your smartphone. Easily change the temperature before you arrive or if you forgot to set it before you left. Reduce costs by setting up a schedule or putting your comfort system into an energy savings mode when you’re away and enjoy the convenience and security of text and email alerts.
Atomizing Systems Inc., has released the 1,000psi Cooling & Humidifying Patented Cold Fog® High-Pressure FogFan, a new fan-assisted, high-pressure fog device for applying a dry, non-wetting, cool water fog in any work space or, directly on machinery or personnel needing cooling or humidity. Even within a room with 8-foot ceilings, no wetting will occur when installed properly. The fogger may be mounted almost anywhere and is equipped with a quiet, pressure-sensing fan to add forward velocity to the fog particles. This unit can replace expensive steam or electrically driven units and only requires our ½ horsepower, 1,000psi Cold Fog® pump system to operate up to six (6) fan units each with four fog nozzles.
EWC Controls Smart Bypass Dampers — Balance your bypass duct with the push of a single button! Available in round and rectangular sizes, EWC Controls’s model SBD bypass dampers make bypass set-up simpler than ever. No measuring instruments are required. No weights to adjust. No springs to crank. The SBD is ACCA Manual Zr compliant. As an added benefit of the unique blade design and the smart, self-balancing feature of the SBD, there is no need to install and setup a separate bypass balancing hand damper.
The new suite of Friedrich FreshAire™ IAQ accessory offerings deliver healthier indoor air quality and tackle serious issues such as the removal of pathogens and pollutants from the air. With the launch of Friedrich FreshAire IAQ, Friedrich is the first company in the U.S. to offer complete and effective room-by-room A/C solutions based on scientific recommendations for how to achieve safer, healthier indoor air quality. Friedrich FreshAire IAQ utilizes an arsenal of effective technologies to eliminate and reduce the quantity of microcontaminants in indoor environments, such as airborne bacteria, mold spores, pollutants and viruses.
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MITSUBISHI
RHEEM
YELLOW JACKET
YORK (JOHNSON CONTROLS)
Mitsubishi Electric Trane HVAC US (METUS)’s Heat2O Heat Pump Water Heater reduces the environmental impact of DHW through energy-efficient operation while using CO2, a natural and environmentally friendly refrigerant with a global warming potential (GWP) of one and an ozone depletion potential (ODP) of zero. The newest heat pump water heater can produce high volume DHW without fossil fuels, Heat2O can help multifamily buildings, offices, hotels, gyms, educational institutions and other large-scale and commercial facilities qualify for sustainability certifications or achieve zero-energy and passive house status.
Introducing the Rheem® Commercial Renaissance™ Line — Welcome to the rebirth of cool. Whether you’re looking to keep employees productive, patients comfortable or heat-sensitive material at optimal temperature, Rheem® commercial heating and cooling products get the job done—maximizing savings and uptime for your business. Rheem offers a wide variety of high-efficiency HVAC products to power your business, and we have the specification tools and documentation to keep your engineers moving. The new line offers better uptime and energy savings. It delivers dependable performance with high-quality critical components, lean manufacturing processes and robust design features.
Upgrade to the YELLOW JACKET® Deluxe Mini-Split Tool Kit 60994 for the most complete set of premium tools designed for the growing variety of minisplit brands and sizes. The Deluxe MiniSplit Tool Kit includes the YELLOW JACKET® Digital Adjustable Torque Wrench with a second wrench head for tube fittings up to 41mm hex size. The kit also includes a premium TITAN® 4-valve manifold and compact ball valve hoses, a dedicated heavy duty evacuation hose, a complete set of imperial and metric hex keys, a 10 pack of replacement Schrader cores, a telescoping inspection mirror, and additional service fittings.
YORK® HMH7 Heat Pump offers compact design with expansive flexibility. The YORK® HMH7 heat pump is the ideal solution for spaces that require a compact design, but without any compromise to comfort or efficiency. Enjoy a higher level of efficiency and increased comfort in a small package. Inverter system smoothly ramps up operation, avoiding spikes in energy use while helping increase overall system longevity. It offers 40% more compact than standard heat pump units. York’s innovative fan design creates less vibration and provides quieter operation. The YORK® HMH7 Heat Pump is compatible with conventional equipment and devices.
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» www.york.com HVACR BUSINESS MARCH 2022
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20QUESTIONS >>
with BOB ELLEDGE
Publisher, Terry Tanker, interviewed Bob Elledge, President and CEO of Rotobrush International LLC., a manufacturer of air duct cleaning equipment in Grapevine Texas. The two discussed managing with an open mind, concentrating on continuous improvement, and the importance of investing back into the business. 1. What toys are in the garage?
A 1999 Corvette! I found it two years ago in Pittsburgh. I bought it from the original owner. It has a tape deck in it! I liked it. So, I bought it.
2. Do you have a secret ambition?
When I retire, I was thinking I may like to be a mayor of a small town. I’m not very political, but I have common sense. So, I think I’d make a good mayor.
3. What would people be surprised to know about you? We own six dogs, and they are a big part of the family. They are little, but I’m sure dog owners know what I mean.
4. Who was your business mentor?
I’ve had many. I’ve learned so many different things from each one. First, I learned about manufacturing and process improvement. Then I worked for a CEO who was exceptionally good at marketing, and another who was good at sales. I’ve learned from everyone I’ve worked for. Well, I’ve worked for many people, so I’d say maybe a little bit from all of them. There are pieces that I take from each one.
5. What’s your background?
I’m from the automotive industry. I was on the manufacturing side of automotive. The company was, Flex N Gate. We supplied parts to General Motors. When you’re building 1000 trucks per day, you learn a lot of lean manufacturing principles as well as quality control.
6. What business principles guide you while running the company? First, quality product − Without those you can’t take the next step. Also, market reputation is important. It must be great. I believe in the old saying, ‘The customer is always right.’ And finally, be consistent with everything you do, which includes the way you treat your people.
7. What aspects of running the business do you enjoy the most?
I like them all. Manufacturing, sales, marketing, customer service, finance. However, recently, my focus has been on marketing and accounting. It’s probably 75% of my job today.
8. What aspects do you least enjoy? That’s not a fair question! (He laughs.) Okay, failure. I don’t like that. But I enjoy all aspects of running the business. It’s all part of the job.
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HVACR BUSINESS MARCH 2022
9. What do you do to keep your business acumen sharp?
I concentrate on keeping an open mind. I think it’s especially important today. Business is evolving and changing so fast. I believe in taking a few more hours to decide or 24 hours or get more information before making a final decision. Often there are ripple effects that you must consider.
10. What advice do you have for our audience?
There are cycles. Often, business leaders stop trying to improve when times are good. Every day as a leader you should focus on how to improve parts of your organization.
11. Is this the center of your business philosophy? Yes, my mindset is to continuously improve every day. There needs to be a goal that you’re moving towards. Don’t get sidetracked. That’s easy to do.
14. How do you effectively communicate with your management team?
I want them to understand the why of my decisionmaking process. If you help your team understand the why, there is buy-in and participation.
15. What fundamental business areas are you focusing on right now?
Marketing, accounting, and R&D. I think these are three key areas all business leaders should currently focus on.
16. What key advantages does Rotobrush offer versus other competitors?
We offer both brush and vac, and the negative air method of duct cleaning. Most competitors only offer one of these.
12. What’s the best business advice you’ve received?
17. Why is duct cleaning such an important add-on service for contractors?
Always strive for continuous improvement. There are going to be good and bad days, and you must understand that. After a difficult day, you can’t get down on yourself. The next day you must come back. You need to fix the problem. That’s the best advice I’ve ever had.
It can help so many customers and improve their bottom line significantly. They’re in the IAQ business whether they like it or not, and the pandemic has brought this to the forefront. Air duct cleaning also gives them the opportunity to offer filtration upgrades, UV lights, and more.
13. What have you set as core organization values?
18. What should contractors be focusing on right now?
The core values are honesty, humility, and transparency. They all tie in together. I believe it’s how you build trust.
Evolve with the times. Keep an open mind and start adjusting your business to be more electronic. Make sure you’re taking care of your employees. Do that by rewarding them and establishing a culture that makes them want to stay. And invest your time and money back into the business.
19. How did you get involved with Rotobrush?
Originally being in the automotive industry, I have multiple years of experience working in manufacturing and warehouse. The VP of Manufacturing with Rotobrush became available, I applied, and they hired me in 2007. Over the years, I worked my way up, and in 2014, was promoted to President.
20. How does Rotobrush go to market?
Mainly, we sell directly to contractors. Although, we do have distribution. www.hvacrbusiness.com
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AIR DUCT CLEANING IS ONE OF THE FASTEST GROWING SEGEMENTS IN THE HOME SERVICES INDUSTRY! POWERFUL & PORTABLE BRUSH + VAC AND NEGATIVE AIR EQUIPMENT! OFFER OTHER SERVICES LIKE UV LIGHTS, FILTER UPGRADES, CHANGE OUTS & MORE PROVIDE AN IN DEMAND SERVICE! FINANCING OPTIONS AVAILABLE ON ALL PACKAGES
See back for package pricing & promotions!
1-800-535-3878 sales@rotobrush.com www.rotobrush.com
CAPITALIZE ON A GROWING MARKET! ADD AIR DUCT CLEANING SERVICES TO YOUR BUSINESS.
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$1,000
BONUS CASH!
OR
FREE TOTAL CARE
Valid on Silver BrushBeast packages and above. Expires February 28, 2022
BRUSHBEAST BRONZE PACKAGE
$8,499 OR
$234
PER MONTH
With approved credit. Not including applicable taxes. 48 month term. For well qualified buyers. Not all buyers will qualify for lowest interest rate. Expires March 31, 2022
ROTOBRUSH aiR+ BRONZE PACKAGE
$5,999 $169 OR
PER MONTH
With approved credit. Not including applicable taxes. 48 month term. For well qualified buyers. Not all buyers will qualify for lowest interest rate. Expires March 31, 2022.
BLOWBEAST NEGATIVE AIR PACKAGES START AT
$4,999 $147 OR
PER MONTH
With approved credit. Not including applicable taxes. 48 month term. For well qualified buyers. Not all buyers will qualify for lowest interest rate. Expires March 31, 2022.
1-800-535-3878 | sales@rotobrush.com | www.rotobrush.com
