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Restoration Rewind Delta Development Group Monthly Newsletter

April 2014


Convention TIME! The 2nd Annual Delta Development Group Convention was a ginormous success! The day and half symposium was attended by nearly all of our 7 franchises, including the group from the Western Colorado office that doesn’t even open until late June. We were very happy to see everyone together and finally get the opportunity to network amongst each other.

The first convention only consisted of one office, so this was the first opportunity that all of the owners really had the chance to meet each other and dialogue about their business. On many occasions they were able to share stories, best business practices, contacts and much more. The time was well received by everyone.


Over the almost 20 hours that we were together we welcomed many guest speakers to share with us their knowledge on the industry. Mike Schaan joined us and covered 2014 Mitigation news. He included topics on new techniques coming into the industry, new electronic forms of some the industry standard manuals, and some great new mobile applications for equipment setting and dry times.

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The discussion on mitigation and field work was continued with another special visit from our friends at Interlink / Bridgewater Corp., and they brought the WHOLE team with them. Brandon Titus, National Franchise Representative, joined us from Salt Lake City and Mary Griser, Financial Manager, was in from St. Louis to lend her knowledge on some valuable financing options. The wonderful gentleman from the Denver Interlink Store were also in attendance and they brought with them a room full of equipment to demonstrate and teach our franchises about.


Mary Griser shared some great information about the variety of financial options available through Aztec financial. She spoke about options that could be offered to a distressed homeowner who may not have the quick funds available for a deductible payment or emergency mitigation work. Mary also provided good information to the franchise owners about financing routes that are available for equipment purchases or rentals or vehicle purchase as well. She was a wealth of information and provided some much needed resources for our owners.

Brandon Titus, shared information on the website that is available to all operations through Bridgewater. This website is office specific and can be used to simplify supply and equipment ordering, as well as purchase orders and invoicing. Brandon also provided some great information on other eco-friendly products available to the Delta Disaster Services group. As you know, Mike Mastous, researched and found the current anti-microbial that we use, Benefect. This product is made with Thyme and is harmless to homeowners, their children and pets. With the help of Interlink, we made this product available to all of the offices and put it on the map across Colorado. It is important to us and to Interlink to continue to provide as many green product options as we can. The gentlemen from the Denver Interlink Supply store were also on hand to share and demonstrate some awesome new pieces of equipment. Guy Allen, John Geyer and Brandon Miller were here and they brought with them an InjectiDry Floor Mat System. They set the system up right in the classroom and were able to show everyone how it worked and share some great ideas for uses of the system in the field.


The guys also demonstrated a new Remote Field Control System. This is a great system for those loses that are off the beaten path, like mountain or rural towns.

The Interlink group also donated some great giveaways. Two of our operations, Mac Urie and Tyler Milyard, walked away with free air movers compliments of Interlink. We want to thank them again for their great giveaways and for their continued support!

The day continued with a networking lunch catered in the hotel lobby. Everything was setup so that everyone could sit in one group and talk amongst themselves. It was a great opportunity for some of the new owners to pick the brains of a couple of the owners that have been in business longer.


After lunch we were graciously joined by Mr. David Lupberger. David presented to us his program on “Managing the Emotional Homeowner”. David is a nationally known speaker, who has developed his program over the years and has been presenting it to contractors and business across the country. As a former remodeler/builder he has experienced firsthand the roller coaster ride that you are taken on when dealing with a homeowner in a disaster type situation. David delivered to us his presentation on that roller coaster ride and the things that we can do in our business to minimize any negative effects from that. David also awarded each of our owners with a copy of his best-selling book also entitled “Managing the Emotional Homeowner”.

We are currently working with David to become a regular speaker at Delta events. His programs are very relevant to what we do and who we deal with every day. We believe a partnership with him in some fashion would be great for all of our offices. We will keep you posted as that opportunity develops.


The first day of the convention was brought to a close by our very own Steve Chapman. Steve delivered a very spirited presentation on the importance of owners being involved in marketing. We have noticed a slight decline in the involvement of owners in the day-to-day marketing activities and while we realize a lot of our offices have great kick offs from the industry related contacts they have already built; we also know that, that particular funnel of business will be empty very quickly. And if it is not maintained with continual marketing efforts, business can take a down turn very quickly. It was important for us to highlight that and again show that importance of street-level and face-to-face marketing from the owners. In his presentation, Steve highlighted the efforts of Emmis Chellman, Owner of Delta Disaster Services of Southern Colorado. With the help of his Business Development Representative, Rosey; Emmis built his business in a market he didn’t know and never lived in. Now after nearly a year in business he still meets every adjuster on site and is extensively involved in the marketing efforts of his office. His funnel has remained full as he closes nearly 80% or more of his agent/adjuster referrals.

Day 2 of the convention was just as jammed packed as the first day, perhaps even more. Over the years, Delta Development Group has built some great relationships with our vendors and we were happy to be able to have a few of them present some very valuable pieces of information to our franchises.


BNC, Business Network Consultants, is the IT Company that we have contracted with for our IT services at Delta Disaster Services of Denver. We use them for our computer services and we worked with them when we built our iPad infrastructure and went to a near paperless system for the field employees. We wanted to share that infrastructure with all of our offices. Arn Johnson from BNC joined us at the convention and gave an in-depth look at the entire process from start to finish. How it works as related to the hardware of the iPad and internal servers, how everything flows within the different software platforms, and of course the cost breakdown. With many of our offices nearing the point of a paperless conversion, we found it very integral to provide that information through the convention where we could present it to everyone.

Next up from our vendors was Dan Long from ServiceSoftware. Dan and his company provide us with Delta Management Systems (DMS) the proprietary job management software that we use at all locations. Dan has been working with Mike and Steve Foster to redesign the DMS platform. With the rollout of the new 5.0 version of DMS just around the corner, we wanted to give Dan the opportunity to share many of the new looks and features with all of the new offices. Dan and his news was very well received and we are all in anticipation of the new 5.0 version dropping very soon. Dan was also gracious enough to donate an iPad mini to our attendee giveaway pool. Thank you Dan for the donation. The final of our 3 presenting vendors was CRDN. CRDN is a trusted company, known nationwide for their expertise in textile restoration. We work with them quite a bit in the Denver office and as most of you know, we highlight their work in our franchise training. We speak to their abilities and encourage all of our offices to build a relationship with their


local CRDN operation. About a month prior to the convention we took that a step further and got in touch with some of the regional and national sales managers at CRDN. When they heard about us mentioning them at our training and specifically driving our operations to them, they were elated and jumped right on board. Joining us at the convention was Regional Sales Manager, Scott Johnson and local Sales Managers, Kimberly Coday and Lindsay Paulson. The trio gave a fantastic presentation at the convention and have also agreed to present at all of our future franchise trainings. The group also donated an iPad Mini as a giveaway for our convention attendees, Shane McKnight walked away with that gift. And we want to thank the group for their great donation. We are very excited to have them as a trusted partner.

The last presentation of the convention was done by Charles Coleman of IC2Solutions. We enlisted Charles on a consultant basis when we were looking for firms to contract with for our website redesign. In our conversations with him we realized that his thoughts on business mimic those of Delta and that we could trust him and his knowledge. We then decided to bring Charles and his company on board as our exclusive vendor for website services. Charles has proven to be a great knowledge base and we believe he will be a great asset as Delta moves more and more into the virtual world.

The convention came to a close with some great words of wisdom from President, Mike Mastous and Vice President Dixie Feld. Overall the time together was a success. We are already looking forward to planning next year’s convention, which we hope will be double the size it was this year.


A special thanks go out to all of our vendors who donated giveaway items: Heidi Furgeson and Tammy Briggs with Corporate Imprints. Brian Chesnut with Schubee. Dan Long with ServiceSoftware. CRDN – Regional and Local Offices. Interlink National and Local Offices.

J.D. Power: Property Claims Satisfaction Climbs for Second Straight Year Highlights Role of Communication Throughout Claims Process Insurers that keep homeowners apprised of the claims process from start to finish are faring well in terms of meeting—and even exceeding—their customers' expectations. Or so it seems, according to the results of J.D. Power's 2014 Property Claims Satisfaction Study.


For the second consecutive year, J.D. Power found a steady swell in overall satisfaction ratings among property claimants. The firm attributes the uptick in satisfaction, in large part, to consistent communication with property claimants, beginning at first notice of loss (FNOL). Compared with 2013, the findings released today suggest that homeowners who filed a non-catastrophic claim in the past year often received: A thorough explanation of coverage when initially reporting a loss. • Prompt notification of what damages were covered. • Settlement nearly 4 days faster. “Starting at the time of first notice of loss, it is crucial for insurers to keep claimants informed of their claim, the estimate of damages, the settlement amount, when work will begin and when it will be completed,” says Jeremy Bowler, senior director of the insurance practice at J.D. Power. •

High Achievers Setting the gold standard once again for property insurers everywhere is Amica Mutual, which scored 898 on the 1,000-point scale used to measure customer satisfaction. The insurer placed first for the third year running. Trailing behind Amica Mutual, Erie Insurance scored 877, followed by Nationwide (858), Auto-Owners Insurance (854) and Farmers (845). The full list of satisfaction rankings can be found on the last page of this article. Of course, any number of circumstances can lead to a property claim, from a water pipe rupturing to a powerful storm system sweeping through a community. Just as each cause of insured loss is unique, so too are the causes for customer dissatisfaction. Generally speaking, catastrophe losses garner lower marks in customer satistaction when compared to non-catastrophe claims. The claims-handling challenges created by Superstorm Sandy have been well-documented, for example. Sandy's Ongoing Impact While it has been more than 16 months since Sandy struck, ripples are still being felt throughout the P&C insurance industry. This is quite evident in feedback from property owners surveyed by J.D. Power. After analyzing more than 5,500 responses from those who filed a property claim between April 2012 and January 2014, J.D. Power found that homeowners who filed for damage caused by Sandy were somewhat less impressed with their insurers. Property claim satisfaction averages just 830 (based on the 1,000 point scale) in 2014, down from 846 among Sandy-related claimants surveyed shortly after the storm. Overall, however, satisfaction among homeowners insurance customers who filed a property claim between April 2012 and January 2014 averages 840, up from 836 in the 2013 study.


"When major storms hit and insurers have to rely on third parties to assist in managing the large number of claims, service levels often deteriorate fast as each insurer has their own processes and approval requirements," Bowler explains. "This can sometimes lead to significantly extended claim cycle times.” Key Findings When conducting the 2014 study, J.D. Power found that 15 percent of all claims reported involved a third-party damage inspection, down 5 percentage points from the 2013 study. Below is an overview of some of J.D. Power's key findings: Overall satisfaction with non-catastrophic claims increased by 11 index points in 2014, compared with 2013 (843 compared to 832, respectively). • Overall satisfaction improves in four of the five factors year over year, while satisfaction with FNOL remains the same as in 2013. The greatest increase in satisfaction is in the settlement factor (+4 points). • When insurers effectively communicate with claimants, those claimants are less likely to escalate the claim to a supervisor. When a supervisor becomes involved, overall customer satisfaction drops by more than 160 index points. • Timeliness of the communication also plays a role in whether or not a claim gets escalated. For example, if the settlement terms are provided to the claimant within one day of first notice of loss, only 6 percent of customers escalate the claim. The rate of escalation increases to 13 percent if the claimant is informed within one week and increases to 18 percent if it takes more than one week. • Nearly one-fourth (23%) of Gen Y claimants escalate their claim to a supervisor, compared with just 8 percent of Boomers. • The study, now in its seventh year, measures satisfaction with the property claims experience among insurance customers who filed a claim for damages covered under their homeowners’ policy by examining five factors: settlement; FNOL; estimation process; service interaction; and the repair process. •


Cost of Recent U.S. Winter Storms: $1.5B and Rising, I.I.I. Says

Near-record snowfall and prolonged extreme cold throughout much of the U.S. have caused more than $1.5 billion in insured losses so far this year, according to the Insurance Information Institute. The $1.5 billion figure covers events from Jan. 1 through Feb. 21, and only includes two of the four winter storms so far in 2014. Over 175,000 claims have been paid to policyholders so far, according to PCS, a division of Verisk Analytics. Insured losses include roof collapses, downed tree limbs and power lines, burst pipes from freezing and auto accidents, says I.I.I. Companies have also sustained business interruption and supply-chain losses due to severe travel and transportation delays and closings. Despite the severity of this winter, losses are well within the magnitude planned for by insurers, says Robert Hartwig, president of I.I.I. In the chart below, I.I.I. lists the top 10 winter storm and winter damage events in the U.S. and Canada from 1980 to 2013. The cost of these events in insured losses have been adjusted to 2013 inflation.


The costliest event was "The Storm of the Century" from Mar. 11-14, 1993. In today's figures, the insurance industry sustained over $3.2 billion in insured losses with that storm, which dumped feet of snow from Canada down to the southern U.S., with even the Florida panhandle reporting four inches of snow, says Hartwig.


The early bird get his worm! Delta Disaster Services of Northern Colorado secured a fire in record time! They were contacted by the Loveland Fire Department to do an emergency board up. Adam Hornbock was on site within 45 minutes of receiving the call from the Battalion chief. As with most fire districts, when they refer a firm to do a board up, they are required to stay on site until that firm shows up. It’s called the handoff, and not keeping time with that handoff is why many restoration firms do not succeed in getting referrals from fire departments. It is a key element because the longer that fire crew has to sit on site waiting for your firm, the longer it takes them to get their equipment back in rotation to handle another fire. This quick turnaround is essential for a fire district, in fact, one of the first questions we often get asked is, what is your typical response time? Needless to say the Loveland Fire Department was very impressed by the response time of Delta Disaster Services of Northern Colorado. This is the first fire that they have gotten from that district and the Battalion Chief was very impressed. Which goes to say that they will continue to use them. Not only did Adam show up promptly, but his crew and his asbestos testing firm were there right behind him. Northern Colorado was able to board up the house properly and contract with the customer to handle all of their content restoration and structural repairs. It’s a very nice size job for them, and based on the fire departments and the customer’s happiness, it looks like many more jobs will come their way. Well done!


The Year's Worst Winter Property Loss Nightmare?

Each of us may have a favorite “poor me� story from this winter, which seems neverending, with hundreds of thousands of people left without power in icy and frigid conditions. But a Missouri family of nine probably takes the prize for the worst winter property loss nightmare. Sometime after the family left home for Florida, a pipe burst on the top floor of their Missouri home, and 44,000 gallons of water cascaded through the house before service


was able to be shut off. The interior of the house was soaked, with ice oozing out through lower floor window frames and siding. Imagine a reverse ice dam of sorts. To make matters worse, the homeowners’ car broke down, so they couldn’t immediately drive home to check the damage. Moreover, none of them could fly home because yet another winter storm resulted in a swarm of canceled flights. The Missouri ice castle damage is on the far extreme of the damage that many home and commercial building owners are experiencing this year. One of the first questions this family will face in seeking insurance coverage is: What caused the pipe to burst? The unendorsed standard homeowners policy (HO-3) covers damage to both the building and personal property caused by an accidental discharge or overflow of water or steam from a plumbing device: in this case, the pipe. However, the insurance picture isn’t so happy if the family hadn’t maintained heat in the home during their absence and the pipe froze, causing it to burst and release the water. This provision in homeowners' policies voids coverage for damage to the building and personal property if heat is not maintained or the plumbing system drained. Therefore, the Missouri family could have coverage or not depending on this one fact. Although the Missouri damage is just as extreme as this winter has been, the editors at FC&S Online® are flooded with similar situations each winter. For example, one agent posed not one, but two, commercial property damage questions: We have two insureds for whom we need your opinion on separate commercial property losses. Both are covered on the ISO commercial property form, CP 00 10, with special perils, CP 10 30. In the first case, the insured's building (both exterior and interior) and business personal property sustained loss from "ice damming." The company adjuster is trying to deny all coverage for external damages based on the exclusion for damage from the "weight of ice and snow." What's your opinion? Our second insured is a medical office. These doctors rent the entire building but occupy only the first floor of a three story building. During the winter, our insureds turned the heat off in the unoccupied portion of the building. As a result, the pipes in the unoccupied portion froze and burst, causing considerable damage. The insurer is denying all coverage based on the requirement that the insured must "do [his] best to maintain heat in the building." We believe that because the insured maintained heat in the occupied portion, the loss should be covered. In the first situation, there should be coverage. The current edition of the special perils form does not exclude damage caused by snow, rain, ice, or sleet except for personal property that is out in the open. There is, however, a clause in the form’s Limitations


section that excludes coverage for damage to a building’s interior that results from rain, snow, sleet, or ice. There are two exceptions to this limitation: There is coverage if the building is first damaged by a covered cause of loss and that damage permits the rain, snow, sleet, or ice to enter the building, and there also is coverage if the loss or damage is “caused by or results from thawing of snow, sleet, or ice on the building or structure.” In the case presented, both the building and personal property were damaged, and the damage was caused not by rain, snow, sleet, or ice but, rather, by the thawing of ice that had built up under the eaves. This cause of loss is covered by the special causes of loss form and should be paid. In the second case, the insurance company is correct. The standard commercial property program excludes coverage for damage caused by freezing of plumbing, heating, air conditioning, or other such equipment unless heat is maintained in the building. In this situation the policyholder controlled the entire building even though part of it was not occupied. Since the policyholder turned off the heat in that part of the building, there is no coverage for the damage. These last two questions point out some of the insurance issues that the Missouri family will face. They also point out, once again, the importance of carefully reading the policy and not relying on adjusting rules that were learned when an earlier form was in popular use.

HOW TO BE GREAT AT SELLING EVEN IF YOU HATE IT By Ira Kalb, Marshall School of Business, USC Perhaps the most important subject you can study is sales. Yet many of the smartest students avoid learning it, and some of the best colleges shun teaching it. Why? One reason is that our society too often disparages the sales profession. Death of a Salesman, Wall Street, Boiler Room, Glengarry Glen Ross give negative portrayals of selling. As a result, too many look at sales people as “slimy sleazy” liars.


And, because so many that gravitate to sales jobs are not properly trained or qualified, the stereotypes about sales and sales people are reinforced by the negative experiences of many buyers. Why is learning to sell so important? Selling is a critical skill because, like it or not, everyone has to sell to succeed. Famous author, Robert Louis Stevenson, recognized this when he said, “Everyone lives by selling something.” Whatever you do, sales skills will help you to… Secure the job you want Convince your boss to assign you to the project you want Influence your company to promote you quicker Encourage your bank or utility to waive annoying fees Sell others to do what you want them to do Of course, if you are in a sales position, learning to sell more effectively can put a lot more money and opportunities in your pocket. Sales Cycle Once you recognize the importance of sales, you should begin learning a framework for selling that I call the Sales Cycle. The way I teach it, it has five main steps. Generating, Categorizing, and Collecting Intelligence on leads. The best sales people get leads from everywhere. Leads capture contact and other information on the people that have expressed an interest in buying what you are selling. They are typically recorded on physical or electronic versions of “lead cards,” and contain the following four types of information on the front of the card. Identification of the prospect. If you are selling to a business, most of the information you need is on your contact’s business card. For additional information you need, your lead card should be designed so you can add it with minimal effort. Product interest. The products you typically sell should be pre-listed on the lead card so that you can quickly check them off when a prospect expresses an interest in them. Degree of interest. This is your “guestimate” of how likely the prospect is to buy your product in the current period, which is usually the current month. Because the degree of interest relates to “buying temperature” the metaphor for “degree


of interest” that is often is used is (1) Hot for the most interested leads, (2) Warm for a medium level of interest, and (3) Cool for the least interested. Since good sales people can move their prospects from Cool to Hot, these leads should not be discarded as many sales trainers suggest. In fact, many Cool leads that will never buy from you can still refer business to you so they need to be kept in your system. Lead source. Perhaps the hottest topic in marketing is having a system to measure the effectiveness of your marketing efforts. As a result, all promotion that you do should have a unique code so that when the lead is captured, you can determine what marketing activity generated the lead. The back of the lead card should contain your notes of every contact that include (1) details on what the prospect wants, (2) information on any competitors the prospect is considering, (3) the next step approved by the prospect, and (4) answers to basic “intelligence” questions you should ask. These questions typically include the following: What do you want or need? This question is critically important and will facilitate your handling of all subsequent phases of the sales cycle. When do you want it? This identifies the time frame for buying and helps you to categorize the lead as Hot, Warm or Cool. How are you satisfying that need now? This question is aimed at identifying the indirect competition. Are you considering other options and if so, which ones? This aims to identify the direct competition. Who is involved in the decision to buy? Novice sales people often waste their time selling scouts that do not make the final decision. What is your budget, or how much do you want to spend? This is necessary to match your product offering with the amount they are likely to pay. Giving presentations. To give effective presentations, sales people need to properly prepare for the presentation. This involves (1) investigating the prospect company, (2) formulating questions to clarify the intelligence already collected, (3) making sure presentation equipment works, (4) being ready to answer “nasty questions” such as what’s wrong with your product, and (5) handling disasters related to Murphy’s Law. Once you are prepared, you should give the presentation by focusing only on what prospects told you they want your product to do. Novice sales people insist on telling the prospect everything in their presentation no matter what. This wastes sales and prospect time and is sure to “turn off” the prospect. During the presentation, the sales


person should look for 3 signals – (1) Buying (upon getting this, the sales person should close the sale), (2) Rejection (the sales person has lost the sale and needs to do whatever is necessary to recover), and (3) Objections (upon getting an objection, which is an obstacle to the sale and a disguised request for more information, the sales person should go to the “Identifying and Answering Objections” procedure listed next). Identifying and Answering Objections If the prospect is not pre-sold on buying the product, identifying and answering objections is the quickest way to close the sale. It involves the following steps. Lowering the barrier. Before you can answer an objection, you should try to lower the barrier by empathizing (but not agreeing) with the objection. Identifying the real objection. Since prospects often disguise the real objection for numerous reasons, sales people need to uncover what is really keeping them from buying. For example, “The price is too high” is not a real objection since a prospect could voice this if (1) they are negotiating, (2) they are comparing your product with one that is not comparable, or (3) they really perceive the price is too high. To answer this objection, the sales person needs to drill down deeper before formulating an effective answer. Breaking it down. Large obstacles need to be broken down into (1) tangible, answerable components (time and money) and (2) bite-sized pieces (making them largely insignificant). Answering. Once the obstacle is broken into little pieces, it is usually easy to answer. For example, a $1,200 difference in price could be reduced to pennies per day over they useful life of the product. Providing proof. To establish trust, a good sales person will provide independent, credible, third-party proof to support each answer. Looking for and reacting to signals. As you answer objections, you look for the same signals and react to them as you did during the presentation. If you receive a buying signal, close the sale. Closing the sale There are two basic categories of closes – Trial Closes and Standard Closes. Trial Closes. When you employ trial closes, you assume that there might be a sale, and you are testing that assumption. Good sales people use trial closes throughout the sales process to save the prospect’s and their time. There are many different trial closes. The following is an example of the “two positive choices” trial close: Mr. Jones, “we have this in blue and red, which would you prefer?” If Jones says, “Blue,” the sale is


closed. Standard Closes. You employ a standard close when you have answered all known objections and ask for the order. For example, if the prospect has no other concerns, the sales person might ask, “When would you like us to deliver?” Please notice that both closing techniques involve questions that cannot be easily answered with a No. That’s because good sales people avoid such questions unless that are certain the answer will be Yes. They ask closing questions with confidence. And after asking, they do not say anything since it is the prospect’s turn to answer. Post-close follow-up Once you close the sale, there is another phase of the sales cycle – the post-close follow up phase. In some cases, prospects get “buyers remorse,” and the “closed” sale becomes unclosed. To handle this situation, you need to go back to the offending objection and answer it again. In a percentage of these situations, you will not be able to recover the sale because of circumstances beyond your control. In most of them, good sales skills will close it back up. Even when there is no incidence of buyer’s remorse, there is another step. You need to make sure that the customer is happy, and once happy, you want to ask your customer if they know of others that you can help as you have helped them. That is you should look at all prospects, whether they become a customer or not, as a referral source. Knowing how to sell Successful people learn how to sell one way or the other. If they do not learn a formal process as outlined in this post, they may make costly mistakes and develop bad habits. If you want to increase your chances of success in business and in life, it will greatly help you to learn the sales process and practice it so it becomes part of your marketing DNA. When I went to school, I did not learn sales. This cost me a lot in lost business and lost opportunities after I graduated. I wrote this post so that won’t happen to you. Best of luck.


And We Will Leave You With This…

“There are three types of baseball players: Those who make it happen, those who watch it happen and those who wonder what happens.” Tommy Lasorda


Restoration Rewind April 2014