HVACR Business February 2019 by HVACR Business

So Much to See, So Little Time By Pete Grasso 5

Generational Leadership By James Leichter 11

Build a Strong Defense By Megan Jackson 13

Increase Customer Lifespan By Joel Frederick 16

Grow Your Business with Direct Mail By Joy Gendusa 19

Increase Social Media Returns By Elaine Duraes 21

HVACRBUSINESS.COM FEBRUARY 2019 / VOL.14 / NO.2

SUCCESSION PLANNING SOLUTION How to finance the sale of your contracting business Page 8

ALSO INSIDE Â» Product Focus ...................................................................6 Ruth King: Live, Eat and Breathe Net Profit Per Hour ...............18 20 Questions with Michael Rosenberg President of Rosenberg Indoor Comfort ............................22

CHRIS BAUMANN EAST PEORIA, IL Franchisee

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The information presented in this advertisement is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for general information purposes only. An offer is made only through delivery of a Franchise Disclosure Document that has been registered with and approved by the appropriate agency in your state, if your state requires such registration (unless an exemption applies). If you are a resident of, or wish to acquire a franchise to be located in a state requiring registration, we will not offer you a franchise unless and until we have complied with applicable pre-sale registration and disclosure requirements in your state. One Hour Air Conditioning Franchising, L.L.C., 12 Greenway Plaza, Suite 250, Houston, TX 77046. Call 1-866-370-8302. ©2017 Clockwork IP, LLC. All Rights Reserved.

CONTENTS

FEBRUARY 2019 / VOL.14 / NO.2

F E AT U R E S

Succession Planning Solution Private equity buyers are very interested in our businesses and they’re paying impressive prices. By Brandon Jacob

Generational Leadership

Build a Strong Defense

Managers will be more effective once they understand the generational differences in their workforce. By James Leichter Your behind the scenes employees are the true lynch pins of your organization. By Megan Jackson

Increase Customer Lifespan Through responsive and intuitive outreach, you can grow your customer base and increase retention. By Joel Frederick

D E PA R T M E N T S

Editor’s Notebook

Product Focus

This industry is alive and well and full of great new innovations. By Pete Grasso

20 Questions with Michael Rosenberg President of Rosenberg Indoor Comfort in San Antionio

C O LU M N S

Prepare for Lift Off — Live, Eat and Breathe Net Profit Per Hour If you track by net profit percentage, you’re fooling yourself. By Ruth King

Grow Your Business with Direct Mail

Increase Your Social Media Returns

No one knows better than you that the needs of your customers change with the seasons — so remind them. By Joy Gendusa Here are five quick, actionable hacks for better online engagement. By Elaine Duraes

Precision Combustion Analysis from Testo • Bluetooth standard on all testo 320 / 330 LX series combustion analyzers. • Best-in-class features on all Testo combustion analyzer models.

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M A R K E T WAT C H Stock Index: The HVACR Business Stock Index added 16.70 points, or 1.25 percent, and closed at 1349.61. Advancing issues overshadowed declining issues by a 2-to-1 margin. To read this month’s analysis, visit hvacrbusiness.com/stock-index.

PROFITABILITY° Achieve a whole new degree of profitability with LG Air Conditioning Technologies Easy to sell, install and service • Strong brand recognition and consumer loyalty • Powerful marketing, training and incentives for LG Excellence Contractors • Flexible system designs with ducted and duct-free options • Rebates available on many energy efficient systems

Discover why contractors who install LG Air Conditioning Technologies are more profitable. lghvac.com/profitable

EDITOR’S NOTEBOOK

BY PETE GRASSO THE HVACR MANAGEMENT MAGAZINE

TERRY Tanker Publisher ttanker@hvacrbusiness.com PETE Grasso Editor pgrasso@hvacrbusiness.com MEGAN LaSalla Art Director mlasalla@hvacrbusiness.com BRUCE Sprague Circulation Manager bs200264@sbcglobal.net BARBARA Kerr Executive Assistant bkerr@hvacrbusiness.com

ADVERTISING STAFF EAST COAST/SOUTHEAST JIM Clifford Regional Sales Manager Tel 201-362-5561 Fax 201-334-9186 jclifford@hvacrbusiness.com

So Much to See, So Little Time

MIDWEST ERIC Hagerman Regional Sales Manager Tel 216-409-3246 Fax 440-731-8750 ehagerman@hvacrbusiness.com

s is tradition in this industry every January (or early February), thousands of manufacturers, distributors, engineers, contractors and anyone else with any relation to HVACR gathered in one place to showcase and explore the latest innovations and up-and-coming technology.

WEST COAST TERRY Tanker Publisher Tel 440-731-8600 Fax 440-731-8750 ttanker@hvacrbusiness.com

I’m speaking, of course, of the AHR Expo — and beast of a trade show, exhibition and showcase that seems to set the tone for what trends we’ll see in this industry in the months ahead.

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©2019 by JFT Properties LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, or by recording, or by any information storage or retrieval system, without written permission from the publisher. 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. HVACR Business (ISSN 2153-2877) Published monthly by JFT Properties LLC., 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039. POSTMASTER: Send address changes to HVACR Business, 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039. Periodicals postage paid at Cleveland, OH and additional mailing offices. (USPS 025-431)

31674 Center Ridge Road, Suite 104 North Ridgeville, OH 44039 Tel: (440) 731-8600 Fax: (440) 731-8750 Web site: www.hvacrbusiness.com (ISSN: 2153-2877)

www.hvacrbusiness.com www.hvacrbusiness.com www.HVACRBUSINESS.com

Held in Atlanta this year at the World Congress Center, the AHR Expo featured 1,824 exhibiting companies from across the entire industry, including 497 international exhibitors, and a total verified attendance of 45,078.

“There will likely be some softening in the second half of the year. Rising material costs and tariffs will weigh on the U.S. market, and higher interest rates will temper the residential market.” At the LG Electronics USA press breifing, Senior Vice President and General Manager Kevin McNamara described the VRF and ductless market in the U.S. as being "past the tipping point," as it has gained significant acceptance. “An obvious choice for hospitality, retail space and healthcare, VRF technology along with LG's other business units can now offer total building solutions," said Donald Decker, director, owner sales for LG.

With so much to see and do at the AHR Expo, two-and-a-half days is hardly enough time to take it all in.

With so much to see and do, twoand-a-half days was hardly enough time to take it all in ... but I tried. Over the course of the show, I visited dozens of booths, talked to many manufacturers and contractors and walked nearly 16 miles!

Many exhibiting companies use this industry gathering to unveil new products or make major announcements, and this year was no different. At a press briefing on the first morning of the show, Rheem announced a comprehensive sustainability platform, A Greater Degree of Good, as well as groundbreaking sustainability commitments tied to “Designing for Zero Waste.” This program has three key pillars, each with its own ambitious 2025 goal: • Degrees of Innovation aims to launch a line of air and water products featuring a 50 percent reduction in greenhouse gas footprint. • Degrees of Efficiency aims to reduce greenhouse gas emissions and net waste to landfill impact of Rheem’s global manufacturing operations by 50 percent. • Degrees of Leadership aims to train 250,000 Rheem pros on sustainable product install, setup and recycling best practicies. Danfoss held its 24th annual press conference at the Georgia Aquarium. John Galyen, president-North America, started off by stating that in 2018, Danfoss’s North American business experienced 12 percent growth. “For 2019, we expect to see 3 percent growth overall and high single digit growth in HVAC for the year,” Galyen said.

Revolutionary products and experiences were also at the center of Daikin’s presence at this year’s AHR Expo. The company’s Innovation Roadshow trailer made the trip to Atlanta, and is featured as an interactive demonstration of Daikin’s commercial HVAC solutions.

In addition, Daikin hosted an exclusive event for engineering and technical trade students who represent the future of the HVAC industry. On the refrigerant side, both Carrier and Honeywell featured new replacements for R-410A. In collaboration with The Chemours Company, Carrier will offer Puron Advance (R-454B) to meet UN Montreal Protocol Kigali Amendment regulations. The new refrigerant, to be offered in these Carrier products beginning in 2023, is expected to surpass the requirements of anticipated future regulations. Honeywell has introduced Solstice N41, which exhibits similar to better performance characteristics to 410A, while preserving safety. “As a company, we made a decision to invest in years of research and development to introduce the industry’s first nonflammable, R-410A replacement solution to meet the industry’s need for a refrigerant that will meet HFC phasedown requirements,” said George Koutsaftes, president, Honeywell Advanced Materials. The AHR Expo also featured myriad new products and technologies. While I may have covered quite a bit of ground at the show, it’s simply not possible to see it all. On the following pages, I’ve put together a small selection of some of those products I saw firsthand during my time in Atlanta. u

HVACR BUSINESS FEBRUARY 2019

PRODUCT FOCUS »

BACHARACH

DAIKIN APPLIED

FRESH-AIRE UV

HITACHI

Bacharach announces the introduction of the MGS-400 Gas Detection Series for commercial and industrial refrigerant and gas leak detection applications.

Daikin Pathfinder air-cooled screw chillers continue to redefine what it means to be “industry leading.” Pathfinder’s performance is optimized for every condition and at every hour of the day with Variable Volume Ratio (VVR) technology.

Fresh-Aire UV has added the APCO-X to its APCO product line of combination ultraviolet (UV) technology and activated carbon media catalyst air treatment for HVAC systems.

Johnson Controls-Hitachi Air Conditioning introduced the Hitachi Water Source Variable Refrigerant Flow (VRF) heat pump and heat recovery cooling and heating systems.

The MGS-400 gas detectors support safety compliance inside of machinery rooms, mechanical rooms, chiller plants, cold storage facilities and walk-in freezers by monitoring for dangerous refrigerant leaks. Using the mobile app and plug-and-play sensors, gas detectors are installed in significantly less time. mybacharach.com

Daikin’s new fan design moves large volumes of air at exceptionally low sound levels and is immune to rust, broken rivets, and other maintenance problems common with conventional fans.

APCO-X offers many enhancements including a longer (three-year) UV lamp lifecycle for cutting-edge, airstream, evaporator coil, drain pan and interior air handling unit (AHU) disinfection. freshaireuv.com

Hitachi VRF Indoor Units, Controls, and Gateway products are all fully compatible with the new water source systems for maximum design flexibility. And installation is simple, even in tight spaces, with top and front piping options. johnsoncontrols.com

daikinapplied.com

BOSCH

EMERSON

HILMOR

Bosch Thermotechnology introduces its first condensing furnace with the BGH96 Series. This Energy Star-rated furnace offers a two-stage gas valve that switches between high- and low-fire settings for added comfort and up to 96 percent AFUE heating efficiency.

Emerson showcases a variety of ASCO solenoid and electrohydraulic fuel gas safety shutoff valves. These products meet leading agency approvals and are ideal for boilers, ovens, furnaces, gas generators and heating equipment in commercial and industrial applications.

hilmor has introduced a new Lightweight Brushless DC Refrigerant Recovery Machine.

LG Electronics has unveiled a robust enhancement of its flagship Variable Refrigerant Flow (VRF) system, the Multi V 5 – now standard with the powerful LGRED° (Reliable to Extreme Degrees) heat technology.

The unit’s low-profile cabinet height and three-way multipoise design make it easy to replace existing furnaces, creating flexibility in multiple types of installations.

The two-way, normally closed ASCO Series 8214 (200) and V710(B), which offer a high flow rate, low pressure drop and watertight design for applications involving low gas supply pressure.

bosch-climate.us

emerson.com

HVACR BUSINESS FEBRUARY 2019

With this new hilmor product, technicians can work in confidence and with one that combines multiple ease-of-use features. Its brushless DC motor, which is lighter than traditional motors, makes carrying the machine easier and less cumbersome. diversitech.com

Available in a range of capacities including the industry’s most compact 20-ton single frame, the Multi V 5 is replete with advanced features that provide superior energy efficiency without sacrificing occupant comfort. lghvac.com

www.hvacrbusiness.com

PRODUCT FOCUS »

MILWAUKEE TOOL

NAVIEN

REZNOR

RINNAI

Harnessing the power, performance, and run-time delivered by M18 FUEL technology, Milwaukee has developed the industry’s first cordless pipe threader.

Navien introduced the new NFC series stainless steel fire tube combi-boilers.

Nortek Global HVAC has added the R7DA, a combination dedication outdoor air system (DOAS) and conventional space conditioning rooftop unit (RTU), to the Reznor and Mammoth branded R7 Platform product lines for optimum IAQ and space comfort.

Rinnai Corporation announces an exciting new addition to its commercial water heating lineup.

With AUTOSTOP technology, which senses severe kickback and automatically shuts the tool off, a dedicated support arm to hold the tool stationary during threading, and an integrated die head lock, this new tool eliminates the need for cheater bars, ropes or pipe wrench supports.

This innovative product will be available in two sizes, NFC-175 (175,000 BTU/H) and NFC-200 (199,900 BTU/H), each offering 95% AFUE, 11:1 turndown ratio, PVC venting up to 150 ft., high-altitude approval up to 10,100 ft. and industry leading residential and commercial warranties. navieninc.com

milwaukeetool.com

The low cost R7DA is the industry’s only direct expansion (DX) package DOAS/RTU offering a drop-in replacement that fits many existing RTU brand roof curbs.

The Demand Duo 2 combines the hybrid technology of the Demand Duo product family with the redundancy and performance of its commercial rack systems. The system features a 119-gallon storage tank along with two CU199 Rinnai Tankless Water Heaters with freestanding rack that work together to offer the best benefits of both tank and tankless technology.

nortek.com

rinnai.us

MITSUBISHI

RECTORSEAL

RIDGID

WEIL-MCLAIN

Mitsubishi Electric Trane HVAC US LLC introduces CITY MULTI N-Generation outdoor units, a big advancement in VRF systems in a smaller package.

RectorSeal has introduced three new refrigeration leak sealant products to its AC Leak Freeze product line for permanently sealing micro leaks in residential and commercial air conditioning systems.

The new RIDGID Model 286 Soil Pipe Cutter makes it easier than ever for trade professionals to get quick, repeated cuts on soil pipe up to six inches.

Weil-McLain now offers its most advanced commercial stainless steel boiler. The new Stainless Steel Vertical Firetube (SVF) features industryleading thermal efficiency up to 97.1%, unrivaled ease of installation and maintenance, the intuitive and userfriendly Unity control system, and Weil-McLain boiler design reliability and longevity.

The new N-Generation high performance outdoor units deliver better energy efficiency and personalized comfort control to commercial building applications. The N-Generation features a footprint up to 30 percent smaller than previous models. metahvac.com

AC Leak Freeze’s PRO nano Series, which uses a patent-pending, quickinstalling applicator, has added AC Leak Freeze nano UV, AC Leak Freeze nano Mini-Split UV, and AC Leak Freeze nano Mini-Split. rectorseal.com

The tool’s single stroke operation streamlines the cutting process while the outward-facing hooks simplify connecting clay and cast iron pipe. The integrated handles are easy to adjust, helping users optimize angles and make repeated cuts with less fatigue. ridgid.com

The unit meets all market-driven bid specifications, and is designed for most heating needs. weil-mclain.com

www.hvacrbusiness.com

HVACR BUSINESS FEBRUARY 2019

SUCCESSION PLANNING SOLUTION How to finance the sale of your contracting business.

BY BRANDON JACOB

eldom does a week pass by when I am not asked about the current buying activity for contracting businesses. This is flattering, as it suggests I have information and I do. Private equity buyers are very interested in our businesses and they’re paying impressive prices. That’s great news to some, but not all. The facts are these private equity buyers play with big dollars and they are not interested in rolling their sleeves up fixing your small to mid-sized HVACR business. Today’s buying activity is focused on businesses producing $10 million and above in annual revenue, operate in a market that can support significant growth and come equipped with a management team that can be heavily relied upon post acquisition. Many times, that management team

Today’s buying activity is focused on businesses producing $10 million and above in annual revenue and operate in a market that can support significant growth. includes the owner and most private equity deals are structured such that the seller keeps a portion of the business (skin left in the game). Chances are you are not a candidate for a private equity buyer if:

YOUR OPTIONS

• Your annual revenues are less than $10M.

For many businesses, the answer to a successful exit strategy will be selling to an employee. That employee may or may not be related to you (son, daughter, niece or nephew) and for the sake of this article, I will simply use the term “employee.”

• You operate in a mid to small market. • You do not have a management team in place below the owner. • As the owner you are planning an immediate exit.

HVACR BUSINESS FEBRUARY 2019

If you’re not a private equity candidate, and there are thousands, don’t panic, there is a solution. The solution might be staring you in the face, literally.

An employee is the right choice for so many business owners. Who better than an employee that knows your business,

knows the strengths and weaknesses and will be prepared to step up and pay fair market value for it? Selling to a competitor makes logical sense and so many business owners place such reliance on an exit strategy focused around the big competitor in town. Of course, a competitor wants your customers, but that’s where the logic gets flawed. Customers are all a competitor wants and very little to no value will be placed on your office equipment, computers, telephone system and inventory of small tools. He does not want your old trucks and chances are you are feeding your employees into the lion’s den. Finally, any intangible value associated to your name is negligible to your competitor; it is unlikely that he will adopt it. So why are so many business www.hvacrbusiness.com

owners shocked when their competitor rightly offers a purchase price radically less than what is expected?

SELLING TO AN EMPLOYEE

means is that many conventional banks make one or two SBA loans a year.

An SBA loan enables the seller to be liquid on the day of close without recourse.

This lack of expertise creates added steps and a longer approval process as these lenders must approve the loan inhouse and then send the loan to the SBA for the SBA’s actual approval, which is very time consuming.

With the understanding that a private equity buyer is not likely to knock on your door and your competitor will gladly take your business for little, selling to an employee starts to make more sense. But is there a catch? Yes, the chances are your employee does not have enough money to buy your business.

A seasoned SBA lender can approve SBA loans in-house and is not required to send the loans for the SBA’s approval. This is no different than if your HVACR business performed one changeout a year, chances are you would not be as efficient at the process.

Thankfully there is a solution. The solution is borrowing the money, the buyer that is, from a bank that uses the Small Business Administration’s (SBA) guaranteed loan program. The buyer is not actually borrowing from the government, but from a bank that participates in the SBA lending program, where the SBA essentially guarantees (insures) a percentage of the loan, enabling banks to lend to small businesses based upon cash flow and not collaterized assets. When selling your business, the buyer will secure a loan from a bank (SBA lender). Because that loan is insured through the SBA the bank making the loan has to follow certain guidelines. These guidelines are fairly flexible in enabling your general manager with very little savings to secure the funds to pay you off at close. Without the SBA program, it’s unlikely any of this is possible because your bank down on the corner most likely will not get comfortable with the lack of tangible assets they can use as collateral and cashflow lending scares them to death. Historically there has been one option and that option was in the form of the dreaded seller’s note which turns the seller into a bank. As the seller carrying a seller note, you are only kind of selling the business and if the buyer stumbles and falls, your days of mid-morning tee-off times may be put on hold until the situation is rectified. Say good-bye to retirement.

SECURING SBA LOAN An SBA loan enables the seller to be liquid on the day of close without recourse. This certainly is attractive when dealing with an unrelated employee and it serves many valuable lessons to junior www.hvacrbusiness.com

Luckily there are banks like Live Oak Bank out of Wilmington, N.C. In SBA’s Fiscal Year 2018, Live Oak Bank loaned the highest dollar amount of any other SBA lender.

on banking relations, something that undoubtedly may come in handy later as the business grows. Does the buyer have to be an employee to qualify for an SBA loan? Absolutely not. This lending program may work regardless of whether or not the buyer works for you. Lenders will scrutinize the borrower’s business experience prior to agreeing on a loan if that buyer does not have contracting experience. So how much money does my employee have to put up? No bank, not even the SBA will lend 100 percent. An SBA lender can lend as much as 90 percent of the total purchase price to the buyer. That means if the business was to be sold for $1M, the buyer is expected to pony up $100,000 and the bank lends $900,000. Great, but not everyone has $100,000, are there other solutions? Yes. The seller can take as much as 5 percent in a seller note offsetting the 10 percent minimum. In this same example, the buyer puts in $50,000, the bank $900,000 and the seller holds a note for $50,000. The one caveat in this example is the seller’s note does not pay until the bank loan is satisfied. Are there any other methods that can

be used to eliminate the need for buyer cash at close? Yes. Assume the buyer and seller plan this sale. If the buyer owns 10 percent of the business for at least two years, the SBA lender can potentially loan up to 100 percent of the purchase for the remaining 90 percent of the business as long as the business has at least 10 percent equity on its balance sheet. This approach has significant benefits which include: • Locks the employee in with the pride of ownership. • Provides a good faith measure to the employee in regard to the plan. • Enables the employee to purchase a portion of the business at a possible discount. This discount is beneficial especially if the employee feels he is contributing to increasing the value of the business and is concerned that he will ultimately pay a premium for the business.

DO HOMEWORK ON LENDERS By now you might be thinking, “great, but isn’t it a long process to secure an SBA loan?” The reality is, it can be. There were over 73,000 SBA loans in the United States and over 1,900 banks that made an SBA loan in 2017. What this

To be efficient at lending, Live Oak selects industries to key in on. This focus enables Live Oak to become experts which results in significant efficiencies. Recently, Live Oak has selected service contractors as a key industry. Brandon Bolen, who heads up the Service Contracting Group, has been involved in multiple positions at Live Oak Bank working with customers at different points of the lending process. “An SBA loan is a valuable option for employees of a service contracting business to have when they are seeking to buyout the existing ownership,” Bolen says. “It’s a great fit not just for internal succession plans, but also for mergers & acquisitions by existing contracting businesses, and the purchase, construction or renovation of business real estate to facilitate the growth of a service contractor’s headquarters or satellite location. “Live Oak Bank is excited to work with service contractors who are looking to grow their business, as well as enable owners who have spent years building their business, the opportunity to sell outright to a qualified employee or buyer.”

PLANNING Planning to sell to an employee remains to be critical. This is not something that happens over-night and a little planning along the way will pay huge dividends. With the understanding that with SBA continued on page 10

HVACR BUSINESS FEBRUARY 2019

continued from page 9

lenders such as Live Oak willing to loan to buyers, what should a contractor do today who is planning to sell to an employee?

The following are the steps that should be taken.

• Communicate with the qualified employee regarding your intentions.

• Identify the employee who is likely to be interested in purchasing your business.

• Invest in a base-line valuation now. This will enable you to firm up timing. • Consider selling small portions of the

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business to the qualified employee today. This will not only lock the employee in, it will determine his/her seriousness. It will also pave the way for an easier loan process when the day comes to sell your shares. • Have a conversation with an SBA lender now. There is no obligation and the information that lenders are willing to share will aid in your planning.

Planning to sell to an employee remains to be critical. This is not something that happens over-night and a little planning along the way will pay huge dividends. CONCLUSION Times have never been better to sell a service contracting business, whether your business produces $1 million or $20 million in revenue. Although the opportunities are tremendous, the successful contractors will be those who take a few moments to plan an exit strategy.

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If your business does not qualify to attract private equity buyers, plan to sell the business to an employee and take advantage of the SBA’s lending program to help your buyer secure the funds required to make the transaction happen. u

Brandon Jacob operates Contractors Financial Opportunity LLC (contractorscfo.com), a financial consulting firm that specializes in business valuations, transactional support and

888.672.9897

exit strategies. Jacob calls upon his 16 years as a CPA as well as industry insight gained as a valuation analyst and acquisition specialist in the HVACR, plumbing and electrical trades. Contact him at brandon@contractorscfo.com.

HVACR BUSINESS FEBRUARY 2019

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GENERATIONAL LEADERSHIP Managers will be more effective leaders once they understand the generational differences in their workforce. BY JAMES LEICHTER

hile on a business trip, I ran into a very successful person. Completely selfmade, he had started several successful companies and amassed quite a fortune. I asked him what he felt was the single most important skill or attribute behind his success. Without hesitation, he said, “I am good with people.” He went on to explain that he had learned the skill of being able to quickly size up people so that he could effectively communicate with them using ideas and metaphors they could understand and appreciate. I have written two articles that are closely related to this: “The Importance of Employee Retention” (HVACR Business, September 2018) and “Use Personality Assessments to Manage Your Business” (HVACR Business, July 2018). In those articles, I mention the importance of understanding personality types when selling to prospects and dealing with coworkers. In this article, I will specifically cover how to tailor your leadership style to different generations of people. By combining an understanding of www.hvacrbusiness.com

Their personal relationships are based on personal sacrifice.

Baby Boomers enjoy solving problems. They believe in building their career over the long term and having loyalty to their employer. generational differences and personality types, you will be in a far superior position to deal with a wide variety of people. The American workforce can be divided into five distinct groups which are identified as generations. Each of these generations has formed their own set of values and attitudes towards work that are often different from the other generation. With the workforce growing older, this may be the first time that five generations of people find themselves working together. This creates a challenge for managers because each generation differs in how they view work and each requires a slightly different style of leadership. There are five generations in the workforce today. They are: Veterans, Baby Boomers, Generation X, Generation Y and Generation Z. Note: There is some disagreement

among experts as to what the actual birthdate ranges are for each generation. For the purposes of this article, I will use “Generations at Work: Managing the Clash of Veterans, Boomers, Xers and Nexters in Your Workplace” by Ron Zemke, Claire Raines and Bob Filipczak as my source.

VETERAN GENERATION The Veteran Generation was born 1922-1943. I realize that this generation is quickly leaving the workforce. However, many people in this age group find themselves needing to work or simply wanting to work. Some might call them the “Greatest Generation.” They are the most straight forward, no-nonsense generation. They are frank, polite, practical and very dedicated to their work. They believe in conformity, authority and rules. They have a very defined sense of right and wrong.

They are respectful to authority and believe in a hierarchical style of leadership. One of their biggest turnoffs is rudeness and vulgarity. Leadership Tips: They want structure and strong leadership. Create a firm set of rules and enforce them equally. You must not play favorites. If someone is late to work, you must enforce policies otherwise the Veteran Generation will see you as unfair and weak. Do not allow rudeness and vulgarity in the workplace. If you are a manager or owner, it is especially important that you do not curse or treat people in a rude manner. This is a Veteran Generation pet peeve. Allow this generation to share their wisdom with younger people. Give them the opportunity to mentor and train members of the other generations. Personally, this is my favorite generation. We should all enjoy them while we still have them. continued on page 12

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continued from page 11

Generation Z are great multitaskers. They are imaginative and believe that they can change the world. They are very entrepreneurial.

BABY BOOMERS Baby Boomers were born 1944-1960. They are optimistic, expressive and possess a strong work ethic. They have a strong commitment to quality and doing a good job. Often, they view their career and themselves as the same thing. They are likely to put in long hours at the office, including evenings and weekends. They enjoy solving problems. They believe in building their career over the long term and having loyalty to their employer. They will either love or hate their managers and will likely be blunt about their feelings. They prefer leadership through consensus. They are family oriented and value health and wellness. Leadership Tips: You must keep this generation busy and give them an opportunity to make a difference, otherwise they will look elsewhere for career opportunities. Be sure to show a sincere appreciation for their hard work and dedication to your company. This generation did not grow up with technology. Pair them up with younger generations to teach them about technology. Do not assume they can’t or will not embrace technology. This highly driven generation has a strong work ethic. They will learn what they must to do their jobs effectively.

They are largely unimpressed with the job titles of their authority figures. They believe in leadership through competency. They are often reluctant to commit to single close, personal relationships. Some of their most admired leaders are Nelson Mandela, Bill Gates and Ronald Reagan. Their biggest turnoffs are clichés and hype. Leadership Tips: Clear and open communication is important for this group. Allow them to be part of the decision-making process. Ask them for advice whenever possible. Managers need to earn their respect as opposed to demanding it. Reduce their tendency to “job jump” by explaining why the company is doing what it is doing. Provide a career path, mentoring and ongoing training. Allow them to feel important.

GENERATION Y

GENERATION X

Also known as Millennials, or Nexters, this generation was born between 1981 and 2000. They have a very hopeful and positive outlook on life. They are determined workers but are concerned with balancing their work and personal life.

Gen X was born 1961-1980. Largely independent, they have a skeptical often cynical outlook on life. They don’t define themselves through their work. They see themselves as free agents and marketable commodities and can be “job jumpers.”

They want flexibility in work hours, appearance and desire a relaxed work environment. They are respectful to authority and likely believe in leadership through consensus with an emphasis on team effort and “pulling together.” They

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value teamwork but want everything done immediately. They are concerned with affecting change and making an impact. In their personal lives, they are likely to have many good friends as opposed to one or two “best” friends. They believe in inclusion and loyalty. Leadership Tips: They want to be part of something bigger than themselves. Be sure your company has a clear mission and purpose. Show them how they can help the company achieve its mission and purpose. They will want to use technology to solve problems. Provide a flexible comfortable work environment. Ask them for feedback. Praise them in public.

GENERATION Z Sometimes referred to as PostMillennials, Gen Z is anyone born after the year 2000. They have never lived without the internet and are very tech savvy. Great multitaskers. They are imaginative and believe that they can change the world. They are very entrepreneurial. Since they are just entering the workforce, little is known about their leadership styles and preferences. Leadership Tips: Start with the idea that they are much like Generation Y. Remember, this generation has likely never heard a dial tone or busy signal. They are super tech savvy and will expect your company to be using tablets and other

technology. Pay close attention so that you can learn more about them and adjust to their values and attitudes towards work.

CONCLUSION When speaking about generational differences, it is easy to generalize and oversimplify. While everyone is unique, each generation is largely shaped by the experiences encountered during their formative years. With five generations in the workplace, it is important for leaders to understand the basics of each generation so that they can quickly adapt to their differences. Keeping each generation happy will be an ongoing challenge. That challenge is one that contracting companies and their leaders should begin confronting as soon as possible. Editor’s Note: To learn more about leadership principles and strategies, visit EGIA.org/HVACR-Leadership and download a free packing of training resources including videos, templates, industry research and more. u

James Leichter is a founding faculty member at EGIA Contractor University. He is a longtime HVAC contractor, consultant and public speaker. Leichter is president and CEO at Aptora Corporation, a maker of contracting business management software. He is the editor of MrHVAC.com and BlackBeltContracting.com. James is a majority partner at RA Tax and Accounting, Inc.

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BUILD A STRONG DEFENSE

Your behind the scenes employees are the true lynch pins of your organization.

BY MEGAN JACKSON

s every great football manager and coach will tell you, there are two components a team needs to be truly successful, a strong defense and a strong offense. As a prospering and growing company, the needs aren’t much different on the road to success, you need a dependable and hardworking offense and a forward thinking and courteous defense. Your offense is your onsite staff, your salesmen, technicians and installers. These are the men and women who work hard every day making the companies name memorable and stand out in the community and among your customers. They are the ones who are seen by the world and who should best represent what your goal is as a company. www.hvacrbusiness.com

The MVP of your business most times are your office staff, your dispatchers, your administrative assistants and office mangers. BEHIND THE SCENES

and office mangers.

But it’s the behind the scenes people, your defensive line that is the lynch pin for your organization.

These are the men and women who are responsible for keeping the company moving smoothly no matter what.

These are your owners, service managers, warehouse managers and staff who make up a good portion of a successful defense.

Whether it’s ordering parts, answering the phones, scheduling work for the customer, tracking the day to day operations and paper trails or just simply keeping the peace in the office when the day is falling apart.

The MVP of the business most times, however, goes to the individuals who are seen the least but typically heard the most, and that is your office staff, your dispatchers, your administrative assistants

It is these individuals who are the most relied on and the ones who can make the

biggest difference when it comes to your customer’s and their overall satisfaction. Over the 18 years I’ve been in the working world, 11 have been in the Heating and Air Conditioning trade. Hired to simply answer phones and handle billing and payroll I quickly discovered some valuable tips and traits that have proven me well when dealing with customers, owners, technicians and employees. While my lists of duties and responsibilities have multiplied over the year’s I still hold to the core basics I learned early on in my career. The list is simple and yet can make the biggest difference when dealing with those around you. continued on page 14

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continued from page 13

ALWAYS ANSWER THE PHONE WITH A SMILE I’m sure there are some out there who are reading this and trying to figure out if I never see the customer’s face to face why does answering the phone with a smile matter. Trust me when I say that your customers can hear your smile. Over the years I’ve been handling customer service, I have had many a customer who remarks on my smile even though they can’t see it. With a smile on your face you automatically put joy in your words, which can almost immediately calm down an irate or disgruntled customer, uplift a sad or upset customer and put at ease a nervous customer. With a smile on your face you set the tone for the entire experience, ultimately no matter what the purpose of the call it should always be a pleasant one. Of course I’m not always happy when I answer the

With a smile on your face you set the tone for the entire experience, ultimately no matter what the purpose of the call it should always be a pleasant one. phone, I too have stressful days, days when I’m sick, days when the work load just seems to be falling on top of me. But every time I lift up that receiver I put a smile on my face and present my best to the person on the other end of the phone, which lifts me up as much as it lifts them up.

OPINIONS MATTER The customer may not always be right, but their opinions and issues ALWAYS matter. Over the years, teachers and speakers across the world have taught the philosophy that the “Customer is always right.” And while I’m sure many of us would like to believe that this is the case, we all know it can be the furthest thing from

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truth, especially if you’ve ever intercepted a call where a customer has pushed the reset button on an oil furnace five or six times trying to get it to light. There’s nothing worse than trying to politely tell the customer to please never do that again. Thankfully, it’s been my experience that if you take the time to educate your customer’s you not only advance their thinking and actions, but you lessen the chance of needing to call the fire department for the oil bomb they’ve created in their system. Or better yet the fun of talking down the customer who is expecting a house full of people for a party and either their AC or Heating system has failed, and they

want you at their house NOW. It can be both difficult and challenging to deal with these types of situations especially if you know that the customer whose system has failed should have replaced the equipment years ago. As the front line of the defense for the company it is not our job to tell the customer what they’ve done wrong, or how replacing their system three years ago would have saved them on the last-minute service call. No, as the front line, it is our job to be considerate, caring, concerned and ultimately compassionate about the customer’s situation. Customer’s respond much better when you show you care about their problem rather than treating them as just another number dialed, or another call received for processing.

A LITTLE HONEY GOES A LONG WAY I learned early on that the age-old adage of “You catch more flies with honey then

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you do vinegar” was 100 percent accurate. Whether dealing with that disgruntled customer whose part hasn’t arrived yet, or better yet has arrived and we aren’t scheduling it fast enough, to dealing with the supply warehouse that lost the part or forgot to ship it, learning to control your anger and your tone can make the world of difference in your day to day interactions. I was once told by a fellow contractor that the moment they get yelled at or see the nasty side of a person the harder it is for them to believe the nicer side. Once you have shown the dark, no one wants to believe the light. Have I been frustrated? Absolutely! Have I ever been angry? Of course! Have I ever been so upset that I wanted to cry or scream? Sure, who hasn’t! But, not once have I ever let the person, I’m directly dealing with see that side. I learned that I

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If you don’t know the answer, you can always find it. Nothing matters more to a customer than followthrough and doing what you say you will do. can still smile and express my frustration, anger and disappointment for a situation and not tarnish the working relationship.

Your customers turn to you as their HVACR contractor to help them feel comfortable and secure about their system.

LEAVE THEM FEELING SATISFIED

I’ve made it a mission over the years to collect as much information as I can about this industry for the express purpose of helping our customers when they are in need.

This is probably one of the hardest tips on the list to achieve every time, because as we all know there are some people who just will not be satisfied, but that doesn’t mean you stop trying. When a customer contacts your office they are seeking a resolution to their situation. Whether it’s scheduling a service call, a sales call, or simply seeking advice for a situation or problem.

One of the biggest lessons I have learned is that if I don’t know the answer, I can always find it out. Nothing matters more to a customer than follow-through and doing what you say you will do. Telling a customer that you don’t know the answer right now is not the end of

the world, but not giving yourself or the customer the opportunity to find the answer that can make a difference between a satisfied customer or an unsatisfied one. These are just a few tips that I’ve discovered that can make the biggest difference in your customer interaction. Integration of these steps with your traditional training practices will help further even the most veteran office staff and your team. And you will be impressed at how quickly your customer satisfaction scores will rise. u

Megan Jackson is the office manager for Redlaw Mechanical Inc., a community-minded air conditioning and heating maintenance and installation in Lancaster, Va. For additional information, visit redlawmechanical.com.

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INCREASE CUSTOMER LIFESPAN Through responsive and intuitive outreach, you can grow your customer base and increase retention.

BY JOEL FREDERICK

n operating, leading and managing a HVACR and essential services company, the majority of our focus is usually centered around making sure customer service is up to standard, internal processes are operating smoothly and that the “big-picture” view of the company looks healthy. With so many things taking priority during the day-to-day, one process that sometimes doesn’t get the attention it usually deserves is how we conduct our public outreach efforts. Beyond just traditional advertising and marketing tactics, outreach through customer relationships and how we communicate in the community can prove worthwhile in growing your customer base and increasing customer retention in the HVACR industry. Here are a few things your business can do to increase customer lifespan through responsive and intuitive outreach.

COMMUNITY OUTREACH No matter the business, there should always be a responsibility to the community to give back what it has given you. Community outreach can take many different forms, from hosting an educational

Getting personal with your potential client base gives you the opportunity to speak with them first-hand and get a feel for their needs and what they’re looking for in a HVACR service. learning event for a local HOA, providing sponsorship for a local little league team or even taking the time to visit high schools or trade schools to talk to folks that are interested in learning more about the heating, refrigerating and air conditioning world. In addition to providing to the community through your business and spreading goodwill, community outreach provides three very important benefits to your business: 1) being involved in the community will put your business’s name out there and, in turn, create brand recognition 2) lets your community and potential customer base know that your business is contributing to the greater community and 3) provides members of your business the opportunity to network and get involved with different groups and individuals that may be in need of services later down the line.

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Another outreach tactic that helps your business connect with new customers is showing your business’s skill or expertise by getting involved in speaking engagements, home shows, career fairs, etc. Getting personal with your potential client base gives you the opportunity to speak with them first-hand and get a feel for their needs and what they’re looking for in a HVACR service. You’ll often find that in conversations with these folks about services they’ve received in the past that they are eager to share the things they’ve liked and the aspects they disliked of their experience. Take these opportunities to soak in the feedback and form your sales pitch or tailor your services to better fit what the community is looking for. In regard to customer lifespan, community outreach really hone in on the forward-facing goodwill aspect of your

business. Responsible customers usually look out for and choose to work with business that are willing to listen to feedback as well as give back to their communities.

NEW CUSTOMER OUTREACH Of course, one of the biggest priorities for any business is always making sure you are actively calling and searching for new customers. Though there are many ways businesses keep their lead pools fresh and full, from putting dollars into advertising and marketing efforts, to other innovative (and often more budget friendly) options that involves simple outreach initiatives, this is an outreach tactic you don’t want to skip out on. One thing that is easy for businesses to coordinate internally that goes towards outreach efforts is new customer incentives — often in the form of discounts or specials. Whether that means posting specials or discounts on your business’s social media geared towards new customers or finding groups in your community that may be in need of your services, keying in on those that may not have heard of your business and are within arm’s reach at any given time is valuable. As new customers are not often not www.hvacrbusiness.com

familiar with your brand, quality of service or price point, it usually takes a bit more effort to drive this particular audience to action. Offering discounts to these folks takes a bit of the “buyer risk” out of their situation while allowing your business to establish the beginnings of a trusted relationship.

EXISTING CUSTOMER OUTREACH It is without a doubt that the addition of new clients through continued outreach and advertising will generate growth in the business but being responsive and capitalizing on the needs of existing clients can prove to reap benefits for the business as well. Existing clients are valuable in many ways—for example, the relationship that exists between the business and returning customers is valuable in that they are most likely the group to use your business for repeated service. These folks are the heartbeat of your business and have established loyalty with your brand.

and get 25% off your service, while your friend earns $50 towards their next service.”

MILITARY AND VETERAN OUTREACH Lastly, in the essential services industry (or any industry, at that) it is always in your best interest to do your due diligence in outreach to the military and veterans in the community. These men and women are the core of our nation and it is our responsibility to make sure we return the favor whenever we can. In military outreach efforts, there are two primary approaches. The first being extending services to military and veteran groups at discounted rates or, if possible, even gratis. For example, your business can find and partner with a local or regional military support group to provide home services to those veterans that may not be employed or have the means to pay for maintenance or repairs on their HVACR systems.

As new customers are not often not familiar with your brand, quality of service or price point, it usually takes a bit more effort to drive this particular audience to action.

get to know them on a personal basis. Nothing is more valuable than getting to hear their input and give your expertise face-to-face in return. In fact, face-to-face correspondence will always stand a higher chance of being remembered and be more likely to leave a lasting impression about your business. Give these responsive and intuitive outreach efforts a try next time you are looking for ways to get involved with your own community! u

As president of Quarter Moon Plumbing & AC, Joel Frederick leads a great team that has been committed to serving the San Antonio community and surrounding Texas areas for over thirty years. Joel actively supports his community and dedicates much of his free time to volunteerism and service work. For more information about Quarter Moon Plumbing & AC, please visit quartermoonplumbing.com.

CONTRACTORS As an HVACR contractor, you need every competitive advantage possible. By employing NATE-certified technicians, you’re making a statement to your customers that you value quality and recognize best practices.

Step Up with NATE Certify Your Technicians Integrating NATE is a great way to set the bar for excellence within your organization. Not sure where to start? Check out the following tips:

➤ Use NATE’s four-step career path, in-person and online resources to set up a training program for your techs.

➤ Check with manufacturers to see if they offer compensation for technician testing and training.

More often than not these customers are the ones that advocate for your business and want to see you thrive, so why not use the opportunity to present other places of service you can provide them? When it comes to existing customers, it is imperative to leverage that good relationship to continue to grow. A good strategy that is often used to expand on this is a refer-a-friend incentive. If customers are pleased enough with your work to tell a friend about it, that is a big win for your business. Similar to the new customers barrier, people are more likely to be driven to action when there is an incentive for them as well. Refer-a-friend programs include new customer benefits, as discussed before, while also including incentives for your existing customer doing the referring. This can look something like “Refer-a-friend www.hvacrbusiness.com

The second is getting veterans involved in your business through training and employment opportunities. Veterans are an honorable and hard-working group of people that are often left in situations that make finding employment difficult.

➤ Find a testing organization online.

By reaching out to military staffing agencies and opening your business to on-boarding or training these folks, you establish a goodwill relationship with a tightly knit, highly organized and most importantly deserving community.

➤ Use the NATE logo in all your advertising—website, literature,

Take note that outreach initiatives are best utilized to supplement the times between your business’s marketing and advertising efforts. While advertising will give your business a chance to get in front of someone’s eyes at a higher frequency, outreach provides the opportunity to meet with your customers personally and

Get Listed on NATE’s Contractor Locator As a qualifying member of the NATE Consumer Contractor Connection (C3) program, you are connected with consumers seeking contractors who employ NATE-certified technicians.

Boost your NATE Marketing business cards, quotes, ads, direct mail, clothing, and more.

➤ Brand your vans and even your shop. Find patches, promotional items, and more online!

asknate@natex.org 877-420-6283 natex.org

HVACR BUSINESS FEBRUARY 2019

FINANCE

BY RUTH KING

Prepare for Lift Off — Live, Eat & Breathe Net Profit Per Hour

ou’ve decided what you want for 2019 and why you want it. The best way to determine and track your rocket’s course and profits is with net profit per hour. If you track by net profit percentage, you’re fooling yourself. Why? The first thing you usually do is convert the percentage into dollars and decide whether those dollars are enough. You MUST dig deeper. What do those dollars represent? How many billable hours were used to create those dollars? Then, decide whether those dollars are enough. Two contractors each have a 10 percent net profit. They both think they are doing well. One contractor’s net profit per hour is $10 per hour. The other contractor’s net profit per hour is $50 per hour. Which contractor would you rather be?

If you track by net profit percentage, you’re fooling yourself. • Net Profit is gross profit minus overhead. Overhead is calculated by multiplying the overhead cost per hour times the number of hours.

These two jobs had almost identical gross margins. One achieved a net profit. The other lost a significant amount of money.

• Net Profit per hour is net profit divided by the number of job hours.

Here’s another reason gross margins don’t matter:

GROSS MARGINS DON’T MATTER The job for Customer JE achieved a 40.51 percent gross margin and a $73.34 net profit per hour The job for Customer HT achieved a 40.27 percent gross margin and lost $21.37 per hour.

The job for Customer LP had a gross margin of “only” 19.41 percent, the lowest gross margin on the chart. Many contractors would think this job lost money. Yet, it earned a $52 net profit per hour. The job for Customer DG had the highest gross margin on the chart, 64.50 percent. It achieved a net profit per hour of $49.49. This net profit per hour is less

than the net profit per hour of Customer LP with only a 19.41 percent gross margin. This is why gross margins don’t matter. The dollars do. As you prepare to lift off and start your journey towards your goal, make sure you know your company’s desired net profit per hour for the journey. This number is critical when tracking your rocket’s path and the potential course corrections along the way. u

Ruth King has worked with contractors, distributors and manufacturers to help grow their companies and become more profitable. Contact Ruth at ruthking@hvacchannel.tv.

PERCENTAGES NOT DOLLARS The percentages don’t matter. The profit dollars matter. The net profit per hour matters more. Here’s another reason that percentages don’t matter (net profit or gross margin): See Fig. 1 to the right. This is a list of 20 jobs from a client. Since I didn’t know the clients, I wanted to choose the jobs at random because I didn’t want my client saying, “Don’t use that one because …” Or, “use this one because …” The abbreviations at the top of the chart: • Customer names are initials to protect their identity. • Selling price is the price the customer paid. • GP is Gross Profit. • GM is gross margin. • OH/hr is overhead cost per hour. • # hours is the number of hours that job took according to payroll time sheets.

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MARKETING

BY JOY GENDUSA

Grow Your Business with Direct Mail

f growing your marketing has been hit-or-miss for your business, you’ll want to read this. I’m focusing on ONE easy-to-implement direct mail “hack” that, when used consistently, will generate leads and a growing bottom line for your business. And this isn’t just general advice. It’s been PROVEN, and below is the proof for you to do with it as you will. I found three successful HVACR marketing campaigns that use this hack to generate REAL revenue for REAL businesses like yours. Such as: 322 jobs and $258,040 in revenue. So what is it?

No one knows better than you that the needs of your prospects change with the seasons. Most customers don’t exactly have a reminder set months in advance. TUNE YOUR MARKETING TO THE SEASON

they call YOU: 1. By being more trustworthy/familiar to them (usually with more frequent and regular marketing). 2. By offering them a good initial offer. Some business owners cringe at No. 2 because it “devalues” their services. But that isn’t the case — instead, you’re giving smart consumers a reason to choose you and let you earn their business for years to come.

No one knows better than you that the needs of your prospects change with the seasons.

remind them that they need your services. And that reminder should be timely. You want your postcard to be the first one customers receive and say, “Oh yeah, I should really get the _______ serviced.”

Most customers don’t exactly have a reminder set months in advance to get a seasonal tune-up. That’s why you have to

By the way: recipients may get other postcards from your competitors.

Let’s take a look at three well-timed direct mail campaigns that used smart offers to their advantage.

But there are two ways you can ensure

continued on page 20

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2. BIG DROP RIGHT BEFORE THE SEASON STARTS Mailing list: Single family customers in select zip codes, household incomes of $50,000+, year of home built prior to 2009 Marketing schedule: 6,000 postcards mailed 1X

1. MONTHLY MAILINGS FROM APRIL TO JUNE Mailing list: Customer list of 5,000 Marketing schedule: 4 monthly mailings April-June

Special offers (1): $79 special heating tune-up + FREE air filter Results: 13 calls and $10,000 in 2 weeks If you’re only going to mail once (and I don’t recommend that you do), make sure you do it with strong image and a great offer, like the one above.

Special offers (3): $10 off tune-up, $25 off any service agreement, $50 off any air cleaner Results: 155 responses and $12,000 in immediate revenue This company didn’t mail as often as the first, but the revenue they generated could have paid for 10 of these campaigns.

3. FOUR MAILINGS RIGHT BEFORE WINTER & SUMMER Mailing list: Customer list of 6,000 Marketing schedule: 4 mailings right before winter season, and 4 mailings before summer Special offers (5): $89 furnace/boiler tune-up, whole-house duct cleaning for $225, $50 off any repair service call, $89 dryer vent cleaning, $300 off any furnace/boiler installation Results: 322 jobs and $258,040 in revenue. This campaign was a huge success for three big reasons: 1.) Repetition — 4 mailings! 2.) Timing — right before the season starts 3.) Offers — they are good and plentiful Want to make this upcoming season better than the last? Then pour coals on your promotion beforehand to heat up interest, and incorporate 2-5 special offers to entice calls, leads, and new sales! You don’t have to take my word for it though — I just showed you the proof. u

Joy Gendusa is an entrepreneur, business owner, author and keynote speaker. She grew PostcardMania from a small startup into an industry leader. Connect with Joy via email at Joy.Gendusa@PostcardMania.com.

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SOCIAL MEDIA

BY ELAINE DURAES

Increase Your Social Media Returns

sk anyone to describe the power or potency of social media, and they’d be quick to flaunt their “knowledge” for free. Everyone seems to care about online engagement and are only too happy to follow the trend. But, how many people are actually enjoying the rewards or returns on social media spend — predictably and consistently? Or is an investment in social media a waste of time and resources?

A little investment in stunning, brand-optimized photos can be the difference between ‘just there’ and ‘right on target’ when your audience takes one look at your brand messages.

DELIGHT WITH VISUAL CONTENT Videos are light years ahead of pictures, because they tell a vivid story in a human, personal way. If a picture is worth a thousand words, perhaps a single video is worth more than a gazillion pictures?

There are people out there “mining gold” predictably via social media — and wouldn’t mind keeping the how from you for as long as they can. Here are five quick, actionable hacks for better online engagement.

Think of it like this: A picture presents products and services in static mode. But a video goes several steps further and puts a lot more action and emotional appeal to the same. People are drawn in quicker to your marketing messages and respond faster in video mode.

KNOW YOUR TARGET AUDIENCE website, they would be able to make money in their sleep — until it went bust. Investing in a website and, then, turning your back on it is like having a beautiful garden and giving leeway for weeds to hold sway.

You sell HVACR service, but to whom do you sell? Adults or teens? Obviously not teens, but are the adults millennials or boomers? These questions — better yet, the answers — will lead you to your gold mine.

A highly optimized website, for instance, gives instant, global presence, converts faster across the globe and makes you an authority in your niche.

UPGRADE YOUR WEBSITE

Forget what you heard about good products advertising, itself: 20th century perhaps, but not anymore.

The dot-com bubble made almost everyone believe once they put up a fancy www.hvacrbusiness.com

Granted, it’s tough to find several crispy-clean pictures that show, rather than simply tell, but that’s no excuse to get sloppy with this critical element of your online marketing strategy. A little investment in stunning, brand-optimized photos can be the difference between ‘just there’ and ‘right on target’ when your audience takes one look at your brand messages.

During the gold rush that began in January 1848, all roads led to California as every entrepreneur (and wannabe) had suddenly “discovered a little-known secret” for mining the precious stone right in the “city of gold.” Unfortunately, hundreds of thousands of hopefuls got their hopes dashed — and yet, a handful of miners actually struck gold.

To engage your online audience successfully, you must know who they are and what they want. Only then can you target your marketing messages appropriately. “Targeting everyone online” is like targeting no one at all. There’s need for thorough research to identify your ideal audience. Identifying the ideal ONE is the smartest way to attract, engage and convert.

buy in the first place. People aren’t leveraging the power of visuals in their social media posts or ad campaigns.

GET SOCIAL OR GET LOST IN THE CROWD

Today, you must Think-Create-Targetand-Convert to stay relevant. There’s no better time to be out there getting noticed with your Facebook or Instagram ad campaigns. But, is this something to consider doing yourself ? Yes, if you can pull it off, but no one can be, nor do they have to be a pro at everything. Keeping to your lane and allowing professionals to handle your campaigns increases your chances of success exponentially.

USE BETTER PICTURES It’s no longer news that visuals convert better than text — it’s why shoppers end up paying for what they never thought to

No doubt, video content remains a clear leader as far as increasing social media returns go. However, the right blend of all the above is a superb social media strategy to keep handy, indeed. Are you winning with your social media strategy? Do you have one right now? u

Elaine Duraes is marketing manager at Bosch Thermotechnology Corporation, responsible for overseeing the company’s North American marketing, communications and customer programs. Over her 13-year tenure with Bosch, Elaine has worked in the company’s Automotive Aftermarket and Thermotechnology divisions. For additional information, vist bosch-climate.us.

HVACR BUSINESS FEBRUARY 2019

20QUESTIONS

>> with MICHAEL ROSENBERG

We sat down with Michael Rosenberg, president of Rosenberg Indoor Comfort in San Antonio. Rosenberg, who grew up in the industry, discussed moving from sales to management, starting over and what he’s learned about being a leader. 1. How did you get your start in this business? My parents, Lee and Betsy, owned Metro-Tech Service Company, so I grew up in the HVACR business most of my life. I started out sweeping the floors of the warehouse. I actually attended some Air Conditioning Contractors of America (ACCA) meetings when I was in high school because of my parent’s involvement, and that’s where I got a feel for the industry. 2. What did you do after high school? I went to the University of Texas and got a degree in business management. I joined the family business full time the week after that. 3. Did you always know you were going to join the family business? Actually, before college I wanted to be a doctor. I was pre-med my first year in college, but then I decided I was more fit to do business. I really liked business. I didn’t really like the hospital environment, the sickness and the death. I enjoyed sales and accounting, and dealing with clients. And then I shifted my focus from the biology and chemistry classes to accounting and statistics. 4. What was your position when you started full time? I was the purchasing manager. I knew about the parts and such from working during the summer time, but I had a lot to learn so I just dove in there and I was inventory control, made sure all of the trucks had the proper amount of parts. I made sure the warehouse was clean and that was my first job. I think I did that for a couple of years before I moved into the next place. 5. Where did you go from there? I moved into the residential replacement side, going into homes and visiting with customers. Then I moved into commercial sales. From there I started to do more of the work on the business side of the business ... planning and managing ... I became the business manager. 6. What happened to the business in 1998? My family decided to sell the business to Blue Dot. I stayed on with them doing mostly commercial maintenance sales until 2003. 7. What happened then? My parents approached me and said, ‘Hey, let’s start over again with a new company.’ That’s when I went and got my Texas air conditioning license. My parents still owned the original building from their old company, so we moved in there and purchased seven trucks.

HVACR BUSINESS FEBRUARY 2019

8. Were you competing with the old company? Actually, no. The old company was sold again and blew up. We got the word around that we were back in business and named the new company Rosenbery Indoor Comfort. We started off with a bang and actually made a profit that first year. 9. What was your role at the new company? I was, and still am, president. My dad was president at the old company, but had taken a couple of years off and was doing some consulting. He wanted me to lead this new business, while he took on more of an advisory role. 10. How long before you started to grow? It was about five years before we really got to the point where we saw growth. That’s when we bumped up our marketing — SEO, ad words and other internet marketing. We also started doing TV then. We had to grow the business and grow the cash flow to allow us to invest in the business. We started with about 10 employees; today we have 36. 11. What kind of learning curve did you experience now that you were leading? That’s a great question, because all of a sudden I’m the man. I’m in charge and it was definitely different having people come directly to me and not my dad. My dad’s always there for feedback and help. But when we started over and he said, “You’re the president,” that really made me push hard into learning and sitting in that position and learning what it takes. 12. What does it take to be a leader? Communication. When you’re president, you’re involved in all kinds of different things, including dealing with your people and making sure they’re motivated and doing what they’re supposed to be doing.

13. How do you motivate your people? The most important thing in motivating your people, spending time one-on-one with them and listening to them. And when they do a good job or they sell something or they excel at something, it’s important to thank them. A huge part of motivating people is making sure they feel appreciated. 14. What is your management style? I like to communicate with the individual and tell them, “This is what I expect and this is what your goals are,” and then I leave them alone and let them do what they need to do. I don’t micromanage. 15. How do you approach recruitment? We’ve built relationships with trade schools ... we’re on their advisory boards ... and they send us potential graduates. We interview them and put them through our Build-a-Tech Program, which is a six to 12 months training program. 16. How do you combat the labor shortage? It’s really challenging to bring in experienced service technicians and installers because there’s seems to be a shortage in our industry. When you do find an experienced tech, it’s sometimes difficult to hold onto them and they don’t work out. But the ones we bring in from trade schools and build within, those we’ve had a really good success. 17. What’s the biggest misconception about the current workforce? Everyone has this bad taste in their mouth about Millennials ... that they’re not hard workers and they’re high maintenance and such. If you know how to work with them, they can be really good workers. They simply have different types of motivation. 18. What challenges do you see in the next few years? The Internet is making business kind of difficult. For example, people go on the Internet and can buy a Ductless Mini-Split for half the price of what we have to sell it for, or they question the prices we charge on parts because they can buy it cheaper online. 19. What is the best advice you’ve ever received? Don’t be afraid to spend money smartly to grow your business. 20. Who is your role model? My dad, for sure. He’s passionate about the business and the industry. I think the business is his hobby. www.hvacrbusiness.com

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