“How can I motivate technicians?”

This is something I’m often asked by  HVACR service company owners, or service managers. Of course, what I’ve quoted above is only the root of the question, with things like, “…..to show more interest in their job….” or something else along that line as the completing element to the query. And, whatever  the term or thought they refer to when asking this question, it’s universally understood that what they want to know is what specific steps they can take, or what they can say, that will result in a higher level of performance from the technicians they employ or supervise; as though there is some specific formula or exact verbiage that exists relative to ‘motiviating’ people.

My initial response to their question begins with making what I believe is a valid point about the subject, which is that no one can actually motivate anybody else. The only thing one can do is effectively guide other people to motivate themselves. And the next point I make is that technicians are people too, which means that there are no special methods of  helping others motivate themselves that apply only to technicians. With that said, I’d like to discuss a concept that I believe can be a part of a person’s development, and thereby affecting their level of professional performance….especially in this day and age of instant media communication and information….that of comparing oneself to others.

It’s my opinion that while it’s unfortunate, it’s true that a person’s self-opinion about how much they are accomplishing in their life and contributing to society (that’s the goal that’s innate for all of us, after all) can be influenced by their exposure to information about others. The best way I can explain this situation is by employing baseball as an analogy.

The vast majority of people (the number that seems popular these days is 99%) are born standing at bat at home plate, and as their life moves on through adulthood, the pitches begin, and, sometimes a swing of the bat results in a strike, and sometimes it’s a hit. And, there are times when it’s necessary to make a judgment not to swing at all at a pitch that’s outside the strike zone (or perhaps make the often unconventional decision to reach for one outside of the strike zone because your instinct tells you it’s the right thing to do). The bottom line is that the objective is to get on base and make your way to home plate, which means that in addition to your own efforts, you also depend on others to help you succeed and reach your objective. Or perhaps you’ll  be able to hit one out of the park and make it home very quickly with dramatic success.

Like I said, that’s the way it is for most people. And, then, there are some people that never have to face a pitch or make a judgment that gets them on first base, or allows them to hit a double, a triple, or a home run. Some people may, by the factor of their birth, be born on first base, which, if they accept their fortune in a positive way, will help them along through their baseball game of life without a lot of unnecessary difficulty.

Or they might even be born on second or third base, which means they still have to depend on others, and then also make some kind of effort to get home to success. (Of course, there are very rare exceptions to this rule. Take Donald Trump for example….in my opinion, he was born a short baby step from home plate with the umpire holding up one hand to stop any play while motioning with the other for him to move his foot just a little bit, but his situation is so rare, common sense dictates that we don’t even consider him in this discussion.) The point is that as a service manager or company owner who is trying to understand what motivates technicians to do the best job they can do, it’s possible that they’re making an unnecessary and destructive comparison, and it affects the way they make sense of things overall, not just their career.

This begs the question, “So, should I sit a technician down and explain the whole baseball scenario, and tell them that it’s destructive to compare themselves to others”? No, I don’t think that’s necessary. I think all we need to do is understand that the concept of comparing is something that could be happening for someone we’re trying to guide along their way to success, and then employ our supervisory skills accordingly to do the best we can for them.

Until next week.

Learn from yesterday….live for today….look forward to tomorrow.

Jim

OK…I’ll begin by admitting that I’m a card-carrying Baby-Boomer, which means that computers, doing business on the web, smart phones, Facebook, Twitter, etc…are second nature to me, and that I have grandchildren who continue to amaze me with their understanding, and their simple, no-questions-asked acceptance of, the global community we live in today. That being said, I also think that, on the whole, I’m not doing too bad with all of it. After all, we have an on-line workshop registration system on our site, and our customers can click-and-buy video training materials,  and they can purchase a download of an e-book if they prefer to do it that way rather than having a CD mailed to them. And, I do some Facebook and Linked-In, and I think that I’ve both provided, and derived some benefit from those activities, which is the way I believe it’s supposed to work.

But, I’ve got to say that I’m still trying to figure out whether or not the Social Media Boom actually works the way some people say it does. That’s the conundrum that I’m puzzling over.

I recently had the opportunity to attend a Fred Pryor seminar on the subject of using social media, and the pleasant and talented fellow who served as the presenter said that he used social media extensively in his “consulting” business. He showed examples of his Twitter activity, his Facebook account, and he explained how he used YouTube, where he posted a video every week from any location he happened to be in at the moment. And, he also said that he posted all these videos, tweeted, and updated his Facebook page while he was on the road doing workshops for Fred Pryor (which is fundamentally a situation in which a person is a contract employee, being paid a given amount of money for presenting at a workshop, and also earning a commission from the the ‘back-of-the-room’ sales), for three weeks out of every month.

Hmmm……am I missing something here?

All of his examples were in regard to __________ Consulting, with no reference to Fred Pryor (purposefully, to be sure), and these activities were designed to bring in business to his consulting firm, yet, he spent 75% of his time in the employ of another company. Call me skeptical, but, if all the tweeting, updating, and video-blogging is designed to generate leads, and ultimately, result in a sale, why hasn’t it, over the extended period of time he referred to, resulted in at least a 75/25 _________ Consulting/Fred Pryor mix rather than a 75/25 Fred Pryor/ _________ Consulting situation? (If, in fact, the ________ Consulting firm does actually result in 25% of his income…)

The other questions that are on my mind about social media in general are:

What if all this noise that is being pumped through various social platforms is really just that…..noise?

What if having a ton of followers on Twitter is really just nothing more than having a ton of followers?

What if all this level of mass connecting is really just contributing to space pollution that creates confusion for more people than it helps?

If you reply to a discussion on Linked In with a direct link to information on a product that you offer; one that will provide benefit and be of value to those involved in the discussion, but it winds up being deleted by the discussion creator because they think it detracts from the purity of the on-line discourse, and seems more like a “sales pitch”, is that what’s supposed to happen in the world of social media?

If you are under (or even over) 30, and you have insights on this subject for me, I’d love to hear from you.

Until next week….

Learn from yesterday…….Live for today……Look forward to tomorrow.

Jim

 

 

 

 

At the November, 2011 IHACI Convention in Pasadena, I had the oppportunity to talk with HVACR students, employers, and with technicians, and here are some of my observations and opinions about that experience.

First, students are being more serious about their education. Some of the students I talked with fit the “young and fresh’ profile…..late teens or early twenties, and not too far away from their high school experience, while the profile of others was the ‘mature’ (read it, older and changing careers) profile. In either case, when I say that they were being more serious about their education, I mean that they were willing to take a critical look at the school they were attending and ask for opinions about them. Whether they were attending a private school or a community college program, they wanted to know if their investment of time and money would pay off in the form of steady, well-paid employment in the HVACR industry.

Bravo, I say. Some students I’ve talked with in the past didn’t ask the critical questions about their training programs, and the fact that this crop of soon-to-be entry level technicians did, shows that we are cultivating a group of industry professionals who are serious about their career.

Second, there were the employers…..I had many conversations with contractors about their business, and about the technicians they employ. While a few of them were of that tired old  belief that “you can’t get good help anymore” or “all we can hope for these days is somebody who can fog a mirror and not fail a drug test”  when it comes to hiring technicians, many of them have also developed a healthy respect for employee development. In short, they have figured out that the only thing that is more expensive than training a technician and losing them, is not training training them and keeping them.

To be sure, the HVACR industry is rife with technicians who think about being self-employed, and there will always be situations in which an individual “does his time” with an employer and then opens his own shop. (Often, to discover that it isn’t what it’s cracked up to be, but that’s another story….) However, when an HVACR contractor does the right thing by the technicians they employ, and treat them as a industry colleague, they won’t experience the frustration of investing time and money in bringing a technician along to journeyman status, then find themselves competing with them for business. By treating them as a colleague, I mean treat them with the respect they deserve as a professional, and set up a compensation program for them that proves that they actually are in business for themselves as an employee, it’s just that they have chosen to work in an environment where their income is derived via providing service for one client, their employer.

And then there were the technicians…..some of them fit the profile of the technician I refer to above; of the opinion that their employer is making a ton of money off of them and not paying them enough, so they’re just putting in their time until they can open their own shop and wind up with a large chunk of cash in their pocket at the early afternoon end of a workday. And these particular technicians had another interesting approach to their work, which was ignoring ( or even bemoaning)  the inevitible continuing process of the ‘greening’ of the HVACR industry.

The fact of the matter is, “Green” isn’t going to go away. The new and more stringent requirements for proper installation and servicing of HVACR equipment has only just begun, so every student, contractor and technician who is serious about our craft simply needs to accept that fact, adapt, and learn so they can benefit from the initiative.

Until next week….

Learn from yesterday….Live for today…..Look  forward to tomorrow.

Jim

No one in the HVACR service business will argue that the end result of getting a piece of non-operating equipment functioning again isn’t the bottom line for a technician. As I mentioned last week, getting paid is, after all, what it’s about in the end, and the way we get there is to accomplish our assigned task for our customer….which is to fix their stuff. And fixing their stuff requires a specialized set of skills that are far above the understanding of the general public, something we can correctly refer to as “advanced” skills. However, the fact that we employ these advanced skills doesn’t discount the fact that troubleshooting can only be effectively accomplished when the technician has a good grip on the fundamentals of HVACR.

And, by the way, considering “HVACR” itself is a good place to start when discussing the importance of fundamentals……HVACR: Heating, Ventilation, Air Conditioning, & Refrigeration, as everybody knows when it comes to what the letter themselves mean, but what about a deeper understanding of this well-known acronym?

Cosider this information, which is from a reply to a question that asked for input on what technicians should be taught first, as they enter the HVACR industry:

Heating (H) influences the relative humidity, vapor pressures, drafts, material integrity, durability, and material VOC emission rates and the mean radiant and operative temperature. It does not apply exclusively to air but to any mass including the heating of water for process and domestic use and surface conditioning such as radiant heating (and negative heating i.e. radiant cooling) panels;

Ventilation (V) in and by itself does not guarantee air quality as its function is to move air mass, i.e. exhaust indoor air and replace it with outdoor air, and this process provides the opportunity for;

Air Conditioning (AC) or preferably “Conditioning the Air” (CA); accomplished through deodorization, decontamination, dehumidification and dilution as well as velocity and temperature control. Since this part of the definition excludes cooling with radiation, radiant cooling is considered as negative heating above.

Thus, the H in HVAC is not exclusively heating air for comfort, the V is not exclusively air quality and the AC is not exclusively cooling air for comfort.

And that, as they say in the meat market, “wraps that up nice and tight”. It’s a detailed, down-to-earth definition of the process of creating comfort and wellness for our customer (VOC stands for Volatiile Organic Compounds….tobacco smoke, building products, etc…), and while somebody could argue that it’s too ‘engineering-like’ for a service technician because the task at hand for somebody running service calls is not about designing a system, but fixing it instead, they would be wrong.

I’m not saying that every time a technician enounters a system that’s not operating properly that they need to crack open their fundamentals manual and recite the above before taking the necessary steps to evaluate a system and determing what specific repair or which specific part needs to be replaced, but what I am saying is that having a complete understanding of something as simple as “HVAC”….we’ll get to the “R” in HVACR in Part Two of this series….gives the technician a certain level of confidence regarding their ability to solve the problem they are facing at the moment. And that confidence is gained through simply eliminating the mysteries of the fundamental of air movement and treatment, heat transfer via refrigeration, and the electrical principles that lead to development of the skills related to reading and interpeting schematic diagrams, testing components, and ultimately isolating the source of the problem.

Until next week…..

Learn from yesterday…..Live for today…..Look forward to tomorrow

Jim

While some might think it a bit crass to say so, once an HVACR technician completes a repair in order to get  a piece of equipment back on line, the end result of that process is getting paid. Yes, getting paid is the last element of the service call process, so we should just accept it. It’s just the way things work. When somebody goes to a doctor for a health care issue, the doctor, in the end, gets paid. The same thing happens when we go to a restaurant for dinner. Once we finish eating, the restaurant gets paid. And, so it goes with the grocery store, phone company, etc…..

 Am I saying that the only reason somebody does any type of work or provides any type of service is that their only interest is making money? No, I’m not. I’m a firm believer in the concept that making money is really just a by-product of accomplishing a chosen mission within a chosen profession, whether it’s having groceries on hand for a customer to purchase, providing them with a meal, phone service, providing health care, or repairing HVACR equipment. We all do what we do because it provides us with the satisfaction of doing something for somebody else; something we do well…something that the person we’re doing it for either cannot, or chooses not to, do for themselves.

But, it still all comes down to getting paid….as long as you’re doing the right thing and providing value in exchange for the money you’re being paid. And, to provide value as an HVACR technician, getting to that final result requires three steps:

Step One: Know the fundamental things you need to know, such as the electrical, refrigeration, and air flow processes related to the proper operation of an HVACR system. What happens to the refrigerant as far as the change of state during the heat transfer process? How do the components of a refrigeration system work together to accomplish that change of state and maintain the necessary pressure differential in order for the system to work? How does current flow in an electrical circuit? What is the function of a switch and load? Why does a comfort cooling system require 400 CFM per ton in order to operate properly?

Step Two: Apply the fundamental things you know to the troubleshooting process when working on any particular type of equipment. If you know how to read a schematic diagram, you can apply that skill to accomplsh the general process of tracking down the source of the problem and isolating the failed component because you have an overall understanding of the sequence of operation of the equipment. If you understand what your refrigeration system operating pressures should be in the event that equipment is operating normally, you’ll recognize a problem when you see it. If you understand that a refrigeration system in any equipment can only operate properly when the air flow through both the indoor and outdoor coil is correct, you’ll understand the basic concept of balance, and you’ll recognize what effect an imbalance between the refrigeration and air flow systems on the operation of equipment.

Step Three: Know what to do when your general understanding of the fundamentals isn’t enough. If you’re trying to determine whether or not a printed circuit board is the reason behnd the failure of equipment to operate, know how to obtain specific troubleshooting information from the manufacturer, and know how to interpret that information so you can use it to effectively troubleshoot and replace the right component…..and not replace the wrong one. If you are evaluating the operation of a given refrigeration system, obtain the manufacturer’s charging charts, and know how to use them in order to tell whether or not the system is opertaing properly.

 And, once you’ve successfully completed the above steps to accomplish your chosen mission of reparing HVACR equipment, be prepared to accept the by-product of your effectively and professionally accomplishing your mission, and get paid.

Learn from yesterday….Live for today……Look forward to tomorrow.

Jim

Sears, in my opinion, is in trouble. Yes, that’s right. I’m talking about the major retailer that’s been part of the American business landscape for many decades. And the reason I think they’re in trouble is that I don’t believe that any company, no matter how large it is, can survive and flourish as a 25-percenter, and be profitable for their parent company, which, in this case, is K-Mart Corporation. Let me explain.

We recently decided to replace a gas range in a rental, and, like any savvy consumer does today, we did some research on line. What we found was a suitable item at Sears, and, having had experience with purchasing appliances from them in the past for rental units, we clicked, and it was done. The next step  was to go to the store to pick it up. On the way there, we decided we wanted clarification on the model we chose, so we decided to visit the appliance department just to make sure. When we showed up there, we were greeted by a salesperson, and I explained what we wanted to do and showed him the order information we had printed.

And, the first words out of his mouth once he understood what we were doing there were, “Well, we work on commission here.”

I was stunned. Did I hear that right? Did he really say that? Did I actually just walk into a store as a customer and wind up being bombarded by rhetoric that I don’t need (and should never, under any circumstances, hear about) from an employee of that store? Yes, that’s exactly what he said, but I recovered momentarily, and repled, “Yeah, I know that, but I just want get a look at the range we bought, just to make sure it’s the one we want.”

You see, over the last couple of years, we’ve purchased appliances for eight different remodel/rental projects, and the gas range we had purchased in the past for most of them was a certain model that was not bottom-of-the-line. (In one case, it was way up the line, rather than just the middle.) The bottom-of-the-line units are just not what we want. We prefer heavier grates, sealed burners, etc…and, since this particular purchase was a different price than we experienced in the past, we just wanted to clarify that we were’t going to wind up with something we didn’t want. As it turns out, the gas range line had been expanded to two “middle” models, and we didn’t know that.

Anyway, getting back to our far-less-than-professional, lousy-at-customer-service salesperson… Since my reaction was quite obvious, he did make a lame attempt at recovery from his incredibly horrible comment, and after a brief discussion, he made a hasty exit. Since there were no other customers in the area, I have to wonder just where he felt the need to disappear to, but that’s another story.

Enter salesperson number two….

The next thing that happened was that we noticed another model of gas range. It was one that we had purchased before, and, when we looked closer at it, we realized that there was no price listed on it. By this time, a second salesperson appeared, so we asked him about this particular range because we considered getting it instead. We explained that, adding that we had made an on-line purchase.

“You would have to cancel that on your own,” he said immediately with a brusque tone. “We don’t have anything at all to do with that here.”

I replied that we could handle that without a problem, and asked about the price of this particular model.

“It’s 20-percent off,” he said.

Really? Twenty-percent off of what? I showed him the blank tag and explained that there was no number to calculate 20-percent off from. So, he did a look-up and found a number, which, as it turned out was about $200 more than the model we had purchased on-line. That being the case, we decided to stay with what we had, and after telling him that, he launched into a brief tirade that made it clear that he considered our decision not to upgrade as quite stupid.

Enter salesman number three, in the bedding department….

As we were leaving the appliance department, we passed by the bedding department. Since we also had a need for a single bed for a grandson emerging who would soon be graduating from a crib,  we were interested in buying a single bed and box springs. The young salesman that greeted us there was personable and knowledgeable. There was a Sealy Posturepedic set that looked good, priced at $269.00, and we were easily convinced that it would do. We asked if there was a set in stock so we could just take it with us after making the purchase.

Well, no, that’s not how it works with mattresses at Sears. The young fellow explained that Sears doesn’t stock the mattresses, but instead they are shipped directly to the customer. Oh, OK, even better…let’s arrange for a delivery and get this show on the road….except, as it turns out, since we weren’t purchasing a mattress set priced over $500, delivery was an additional $70.

When we expressed the fact that we didn’t think that was quite fair (after all, we didn’t need a $400 mattress set, we wanted a single that was, just as a matter of fact, priced less than that), he said, “Would you like me to check with my manager and find out if we can deliver it free?”

Now, that’s the spirit. A customer service focused sales professional who is willing to go the extra mile. We told him that would be fine, and he got on the phone system loudspeaker and called for a manager. In a few minutes a lady appeared about 30 feet away, and the salesman asked, “Can we honor a free delivery on this mattress set here?”, while indicating the single set we wanted.

“No.” That was it. One terse word from across the expanse of the bedding department, and she abruptly turned and hurried off, disappearing as fast as she had appeared.

Our young salesman was disappointed. He apologized, and we bid him goodbye, picked up our gas range, and left.

And, yes, Sears did still wind up selling a gas range in this case….no sense in being stupid in the middle of accomplishing an objective…. but we have also used Lowes, Home Depot, Sam’s Club and Costco in the recent past for appliance purchases, and in the future, those are the places we’ll look to for our refrigerators, ranges, and laundry equipment. Sure, I’m only one customer, and I’m virtually unnoticable when it comes to Sears’ bottom line because we didn’t (and won’t) purchase a bed or any more appliances there, but my point is that if the only way a business can turn over merchandise is via a lower price than anybody else…..which is what it comes to when any organization isn’t focused on customer service like they should be…..then eventually, they”ll be in trouble.

So, there we have it. Of the four people we dealt with regarding customer service, one of them (25%) was professional, helpful, and wanted to do a good job. The other three (75%), well, obviously not so much. Which brings me to my answer to the question in the title, which is no, I don’t believe that any company can survive as a 25-percenter, even Sears.

Learn from yesterday….Live for today….Look forward to tomorrow.

Jim

NEWS UPDATE: DECEMBER 27th, 2011….

Sears, Kmart: Beginning of the end?

As a slide in sales continues, Sears Holdings announces the pending closures of more than 100 stores. And a year from now, the outlook might be just as grim.

By InvestorPlace on Tue, Dec 27, 2011 9:36

By Jeff Reeves

While many retailers remain on pins and needles about how their holiday receipts will stack up, there’s no mystery at Sears Holdings (SHLD -25.63%). The company that operates Sears and Kmart department stores has been losing customers and bleeding red ink forever, and the past few months were no exception.

So Sears wasted no time in announcing a huge cutback on its store count. Between 100 and 120 Sears and Kmart stores will be closed. The company says $140 million to $170 million will be made as inventory is shuffled out at fire-sale prices.

But more disturbing than the store closures is the context. Sears is losing money, and no profits are expected anytime soon. It makes you wonder if this really is just the beginning of the end for the once-iconic department store.

 How bad is it? Well, consumers should know firsthand just by visiting their local Kmart or Sears locations. Fallen flagship brands like Craftsman tools and Kenmore appliances used to be high-quality names for many Americans but have little currency with shoppers today.

 Even more damning is the tarnish on the stores themselves. Aging stores ideally could use a fresh design — and at the least need a good cleaning and some repairs.

 Hedge fund manager Edward Lampert and his cronies merged Sears with Kmart in 2005. Lampert began focusing on online boondoggles such as an online marketplace in the vein of eBay (EBAY +0.34%) rather than acknowledging the power of its legacy brands at physical stores. You can’t fault the logic, since online retail is crushing brick-and-mortar sales. But the result is online efforts have failed to bear fruit yet, and existing stores present customers with a rather disappointing experience.

 It’s a lose-lose situation that has cost Sears dearly.

 That’s just from a taste perspective, however. The harshest reality for the company is the poor sales numbers that have plagued Sears and Kmart for some time. Sears Holdings has lost money in five of the past six quarters. Even worse: November marked a stunning 19 straight quarters of sales declines.

 The icing on the cake is that Wall Street estimates for the company project consecutive quarterly losses in each period through all of fiscal 2013. That means if you’re being charitable, Sears will continue to lose money for the next year and a half.

 But let’s be honest: The reality is that forecasters aren’t looking any further than 2013, because that’s too far down the road. There’s a very good chance that a year from now the outlook might be just as grim.

 Sears has yet to determine which stores will be closed or how many jobs will be lost. Management is casting the store closures as an unfortunate event prompted by a bad economy, and that is indeed partly true. Many big retailers like Wal-Mart (WMT -0.42%) have struggled to find their way as consumers have cut back and are more savvy about getting the best deals. It might sound counterintuitive that the king of low-priced retail would be hurting, but Wal-Mart has suffered for a few years now as smaller discounters like Dollar General (DG +0.36%) connect with customers and sometimes even undercut pricing at the big guys.

 It is indeed challenging for retailers. But Sears is in a class of its own when it comes to losing customers and losing money (it’s worth noting that some retailers are booming).

 Sales at the company have dropped in every year since Lampert took over in 2005. No wonder shares are off almost 50% year to date in 2011 and almost 70% from the 2010 peak.

 To be clear, bankruptcy might not be an immediate concern. Sears doesn’t have the crippling debt load that drives companies directly into bankruptcy. But it’s certainly on its way. Unless Sears can streamline its operations and find a good way to use funds from this inventory liquidation, it’s likely we will see only more store closures in the future and a race to the bottom for this once-storied retail brand.

 Not everyone is bearish on Sears. Jonathan Berr thinks a new focus on licensing deals — such as a Sears partnership with the Kardashians — can help the company.

 But it’s going to take more than star power to right this sinking ship.

 


Jeff Reeves is the editor of InvestorPlace.com. Write him at editor@investorplace​​.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. Jeff Reeves holds a position in Alcoa, but no other publicly traded stocks.

 

 

 

 

 

 

 

 

 

Implementing a flat rate pricing program into your HVACR business won’t always be a smooth process. You need to consider that if your current method of operation is time and materials, then implmenting a flat rate system is something new. And new is always uncomfortable. That’s just part of the human condition. We are always uncomfortable with change.

As I mentioned in part one of this series, one of the situations you’ll have to deal with is the technician who performs the repair. (If this is you and only you because you operate a one-person outfit, then, of course, you’re the technician.) Regardless of your situation, the bottom line challenge is every person in your organization being capable of understanding the value of the service you provide. If the way you set your price for service is to look around and find out who in your area is the highest price, and then who in your area is the lowest price, then setting your rate somewhere in the middle, then you have to face a fact…. which is that your rates are not based on your cost of doing business, but instead what your guess is as to the going rate in your service area. And if your service rates are based on the unscientific approach I mentioned, there’s a very good chance that you’re not charging enough for what you do. All of which means that your first challenge is realizing that your rates are likely to go up.

The best way I can explain the right approach to that situation is this: Build a bridge and get over it.

You and everyone in your organization needs to understand that what you should be providing to your customers is the best value for their money spent. And that doesn’t mean that it will be the lowest price. The bottom line on this is something that I’ve said many times before, which is that we need to understand that there is a difference between a customer and a shopper. A shopper shops for price. A customer shops for value. And your mission in operating a successful service business is to concentrate on providing the best possible service you can provide for your customers. And, if somebody calls, and they are first and foremost, and all the way through their inquiries about having their equipment repaired, concentrating on price, then they’re not a potential customer. They’re a shopper. Does this mean that every inquiry you’ll field will result in a scheduled service call? No, likely not, but if you’re working on nothing but the lowest price possible and a razor thin margin that can go South on you with the slightest complication, where’s the sense in taking that job on?

Once you’ve built your bridge and committed to excellence based on value for your customer, and not just the price itself, the next issue to consider is a specific plan of implementing a flat rate labor pricing system. One element of this is to prepare, and stick by no matter what, a given script that will be used when somebody calls and asks the magic question….”How much…..?”

Your script answer to any price question is this: “Our service call and diagnostic fee is $______. Once the technician has determined the problem with your equipment, he (or she) will be able to tell you what your total repair cost will be.”

Of course, there will be times that a customer won’t “get it” when you explain this simple and direct system of doing business (we, as human beings, always want to make things more complicated than they need to be), and when this happens, be prepared to repeat what you said word for word, prefaced by a “Yes Maam” or “Yes Sir”, “….what I’m explaining to you  is that we use a flat rate pricing system for specific repairs, and that…..our service call and diagnostic fee is…..”.

Once the customer does have a complete understanding of what you’ve explained to them, they either will or won’t schedule a service call. The odds of them following through with scheduling with you because you are approaching the service they need in a professional manner are in your favor. Again, is there any guarantee that you’ll get every person who calls will schedule their repair with you. No, there’s no guarantee, but think about it this way. Those who aren’t willing to have you come out based on what you tell them on the phone may not be someone you want to be performing service for in the first place.

Once the service call is scheduled, the next step in the process is up to the technician who will be making the diagnosis and accomplishing the repair, while explaining and advising the customer on the service they need.

Until next week.

Learn from yesterday…..Live for today….Look forward to tomorrow.

Jim

 

 

 

 

 

 

 

Once an HVACR contractor has decided that flat rate pricing is the best way for them to serve their customers, provide a reasonable salary and benefits to the technicians they employ, and allow for their company to generate the profit they deserve, the next step is to figure out how to either design a flat rate program in-house, or  decide to purchase a system.

If your plan is to purchase a program, plan on spending up to $4,000.00 for a small company (more if you have more than a few technicians), plus a monthly fee for updates. The reason many systems are priced in this range is that it takes a good deal of research to design a program and determine what a given repair should cost based on a national average, and keep track of the changing price of parts costs. The advanatage of purchasing a flat rate management program is that it doesn’t take a Herculean effort to implement it into your company, and the updates keep you current on parts costs so you can maintain your goal of achieving a reasonable profit at the end of the quarter/year. Some programs may be available for less, and you need to do due diligence and research what is best for your individual situation.

In some cases, the specific label for such a program will vary. For example, if you are in a franchise system, it may be referred to as a “Menu” pricing system rather than a flat rate price guide, but the objective is the same. It’s pre-prepared for you, you plug it into your operation, and it is regularly updated to ensure the profitability of your company.

If you decide to creae your own flat rate pricing system, there are different ways you can approach the project. With the right computer skills and a familiarity with a program such as Excel, you could employ the spreadsheet system to list specific repair jobs and their relative labor price for accomplishing them, along with a price listing. Or, you could decide that your listings will be for labor only, allowing the technician to price the parts at the time the total repair cost is determined. An advantage of Excel, of course, is that you could plug in a rate that allows the program to calculate and list the cost of a given repair once you’ve assigned a time or other code to it. With this arbitrary number plugged in, your printed copy would show the repairs and their individual pricing according to that number. You can also implement a keystroke command into the system that allows you to plug a different number in, thereby changing all the prices to the new amount based on that number. You could also input a zone system that determines one price for a service call and repair at a given distance from your base, and a different zone price for  a repair at a distance further away from your location.

Another approach to designing your own flat rate pricing system involves categorizing the repairs you accomplish. In this type of a system, the higher the category number, the more difficult the repair. A category one repair, for example, would be the simplest part replacement you could accomplish on a given piece of equipment, such as a contactor on a condensing unit. A more complex repair, such as replacing a blower motor, would be a higher category number. And, an even more difficult repair would be a higher category number yet. In most cases, a service company could come up with a category listing of 1 through 6 and cover most of the repairs they do, up to and including sealed system repairs.

Designing your own flat rate pricing system requires a lot of knowledge and will take a lot of work. You will need to be vary familiar with the type of equipment you work on, and create an individual listing in various categories for each of them. For example, if you service gas furnaces, you’ll need to create a listing page for that equipment type for all the category one repairs you do, then create a second page for the cateory two repairs, and so on. (Separate pages will make your listing print in a less complicating manner.) And, if you service heat pumps, the page creation system is again accomplished, likewise for walk-in coolers and freezers, ice machines, etc….

You’ll also need to come up with an hourly rate (even though you’re not charging by the hour) so you can decide what you need to charge labor-wise for a category one repair, category two, etc… (Like I said, this will take a lot of work.) To come up with the hourly rate that you’ll plug into the given category of repair, you’ll need to have a good understanding of your cost of doing business. For this information, you may have to seek advice from an accountant, or do whatever it takes to list and understand all of your costs, then determine what your labor repair rate has to be to cover those costs and provide for a reasonable percentage of profit for you.

The advantage of designing your own flat rate price guide, whether you go with a spreadsheet system or use a word processing program such as Word, is that what you’ll have in the end is something that is custom designed for your business without any program elements that you don’t need or want.

Once you’ve either purchased or designed your own flat rate pricing system, the next process to consider is implementing it into your business, which is a subject I’ll discuss in the next segment of this series.

Learn from yesterday….Live for today…..Look forward to tomorrow.

Jim

 

 

Flat rate pricing for HVACR repairs is good for eveybody. And, I do mean everybody: The customer, the service technician, the service company, and the HVACR industry as a whole. Why am I so sure that this is true? I’ll explain…..

Beginning with the customer…. flat rate pricing is a good thing because it means that the customer will never wind up paying for inexperience or incompetence. If a service company is operating on a time and materials system, and the technician is experienced and competent, that’s one thing. But, if the technician is not experienced in a particular repair and takes and takes 90 minutes to accomplish it rather than 30 minutes it would take for an experienced technician to complete that repair, then the customer is not being treated fairly, simply by luck of the draw. However, when a flat rate price for the repair has been established in accordance with the amount of time it would take for a journeyman level technician to complete it, then it doesn’t cost the customer more money if an inexperienced technician who has not yet developed the skills necessary to complete a given repair in the same manner as a journeyman is the one accomplishing the task.

And, the fact of the matter is, when a customer calls on a professional to provide a service, they expect (and are entitled to) nothing less than journeyman level competence.

When people hire a doctor, lawyer, accountant, or dentist, they don’t expect to be dealing with some one who won’t know everything they need to know about medical care, the law, finance and taxes, or teeth, in order to do the absolute best job they can do for their client. And when people hire a technician to troubleshoot and repair their air conditioner or furnace, it’ s no different. They’re hiring a professional, and they expect to get the same level of performance from any professional they hire.

Moving on to the the technician….Flat rate pricing is better for them than a time and materials system because it takes the pressure off then in regard to the job pricing issue, allowing them to concentrate on their job, which is to get the customer’s equipment back on-line. The very nature of a flat rate pricing system lets the technician simply diagnose the problem, then advise the customer as to the total cost of the repair as shown in a flat rate price guide. One of the undeniable facts about many technicians is that they have a tough time understanding the value of the service they provide, and quoting a flat rate price for a repair is more comfortable for them than calculatng what the final price for a repair will be via the time and materials route.

The more experienced a technician becomes, the more uncomfortable they are in pricing their expertise fairly. It’s just too easy for them to forget the amount of effort, practice, and time they invested in becoming an expert in their field, and when they have figured out how to do something in an extremely short period of time, they only see the minutes it takes to do the work. And the end result of this is underpricing a repair.

Which brings me to the contractor, and the obvious benefit to them….revenue. With the revenue generated from a fair and  professional rate for the repairs their company performs for its customers, they are afforded the opportunity to operate their business successfully; covering their expenses and earning a reasonable and deserved profit.

And, the reason this is good for the entire industry is fundamental…..with contractors able to cover their expenses and earn a fair profit, they can offer technicians a higher rate of compensation and benefits, which serves to attact more young and quality people to pursue the HVACR craft.

Until next week….

Learn from yesterday…..Live for today…..Look forward to tomorrow.

Jim

About twenty years ago, two professors named Richard Bandler and David Grinder, one whose specialty was linguistics, and the other whose field was math, wanted to know why some college freshmen seemed to do well academically while others struggled. And, oh yeah, they pondered this question from the perspective that the students in their study were all of comparable ability, and they weren’t being affected by extra-curricular activities, partying, or any other outside influence. What that (as uncomfortable as it may be for those of us in the teaching profession) left them to consider, was that the only variable in the situation was the instructor. And once they quickly ruled out the conclusions that many people would jump to; factors such as laziness, out-and-out incompetence, or apathy, they looked deeper into to what could be affecting the ability of some students to learn and understand. Then, with an understanding of the fundamental concepts of communicating, Bandler and Grinder applied that knowledge to their study, and formed the basis for a science that became known as Neuro Linguistic Programming…NLP.

Neuro= Brain
Linguistic= Language
Programming=Information Processing System

The underlying principle of NLP is that we all, as individuals, have different processes of communicating, and understanding others when they communicate with us. Our brain employs a specific language for processing information. And, on one hand, when there is a match between two people in communication, the teaching and learning process works well. On the other hand, if there is a mismatch between two people (an instructor and a student) in communication, then the learning process can be negatively affected.

It was no surprise that Bandler and Grinder listed the three fundamental dominant information processing methods we employ when communicating as:
Visual
Auditory
Kinesthetic

Further studies have showed that the most dominant information processing characteristic is visual, with approximately 65% of the population employing that process ahead of the two others to communicate. It has also been determined that auditory learners make up only about 15% of the population, while 20% of us are in the kinesthetic category.
What this boils down to for students is that 65% of them learn best through visual processes, which are fundamentally direct and one-step, such as watching others demonstrating, and having their sight stimulated by colors and illustration. When it comes to auditory learning, though, it becomes a two-step process because it involves a person listening intently, and then developing their own images internally in order to understand fully. And, for a kinesthetic learner, it means they don’t really “get it” until they can touch and feel what they’re making an effort to understand.

Of course, from an overall teaching and learning perspective, we all employ the three basic forms of communication. Bandler and Grinder’s point was that while that is understood, their work showed that each of us leans heaviest on one system as our most dominant information processing characteristic while employing the other two as a supplemental support system. And that’s where the match/mismatch factor comes into play. When an instructor is on a roll and in the zone, the majority of their presentation will be from the perspective of their most dominant information processing characteristic, and they will gain the most rapport with students who share that the same dominant characteristic. For those students who have a different dominant characteristic, gathering information and getting it all aligned in order to understand a concept or a process can be more difficult.  Unless….an instructor considers two factors in the communication process:

1. What their dominant information processing characteristic is.
2. How they can adjust to provide an opportunity for increased matching in the communication process.

The simplest way to begin understanding the science of NLP and the three basic information processing systems is to realize how verbal cues can serve as an indicator of where an individual is coming from relative to communication. If you were to ask the simple generic question, “Do you understand?” and the response you get is, “I see what you mean,” then that person is most likely dominantly visual.
If the answer to the question is, “I hear you,” it could indicate that the person you’re asking is dominantly auditory. And, a kinesthetic person’s response would likely be something along the line of, “I think I’ve got a feel for what you’re talking about.”

Keep in mind that a verbal cue is, as pointed out above, only the very beginning of understanding the science of NLP, communication between instructors and students, and establishing rapport. There is much more to know, and it goes much deeper than simple information processing; into understanding how individuals make sense of the world around them in different ways, and beyond that, into counseling. Bandler and Grinder’s work is well documented, but frankly, many of those texts are, to put it politely, not the most interesting reading on the subject. Beyond those resources, there are several books and audio programs that provide information on a simple and direct approach to NLP, and how it is used to communicate effectively.

Until Next Week…

Learn from yesterday…..Live for today……Look forward to tomorrow

Jim

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